Narrative: Apple is Doomed
Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.
Narrative: Apple is Doomed (Dec 27, 2016)
Written: January 28, 2017
This is one of the most enduring narratives out there – indeed, it’s one of the narratives that made me want to build this site. Though there certainly have been times in Apple’s history when it really was doomed if it didn’t make significant course corrections, this isn’t one of those times. But that doesn’t stop people from weaving various stories into this narrative from time to time, usually with overblown editorials about how Apple has lost its way. Over the last five years or so, we’ve seen more and more stories ascribe this lostness to Tim Cook, but it predates his time as CEO.
The opposite of this narrative also exists, however, and it’s probably best described as “Apple can do no wrong”. We rarely see news articles from most mainstream publications taking this tack – now in its forties, Apple has long outgrown the breathlessness that characterizes coverage of some younger companies. But you do see some of this in the Apple-specific blogosphere, and even more so in tweets and other communications from die-hard fans.
More than with any other company, Apple tends to drive people into one of two camps – you’re either a true believer or a harsh skeptic. You see this most strikingly when Apple reports earnings each quarter, with one set of people pointing out the tens of billions of dollars in revenues and profits as evidence that nothing could possibly be wrong, and others pointing out the revenue lines or growth rates they cite as evidence that it’s all going horribly wrong.
As with so many of these things, the truth is somewhere in the middle – Apple isn’t doomed in any meaningful sense, but there will always be things that it’s doing very well at, and other areas that it’s either deliberately de-emphasizing or which are being neglected as a side effect of allocating more resources elsewhere. In general, I’m very bullish about both Apple’s present and its future, but not blind to its flaws and challenges.
The past year has thrown up several new facets to the Apple is Doomed story. One is that Apple is behind in AI, which is significant enough that I’ve broken it out into its own narrative. Briefly, that narrative is partly about perception and partly about focus, so there’s some truth to it but it’s overblown. Secondly, Apple has been accused of losing touch with its creative professional base, not updating the Mac line frequently enough and releasing a new MacBook Pro that’s underpowered for high-end tasks. The delay in the shipment of Apple’s AirPods was taken as another sign that something was wrong at Apple, and the fact that the Apple Watch is selling in smaller numbers than the iPhone or iPad is another.
There are legitimate criticisms around each of these threads – Apple has left its pro users hanging for a long time when it comes to Mac updates, in part because it’s so heavily reliant on Intel and it hasn’t moved fast enough. But I also wonder whether Apple may have boxed itself into something of a corner with the Mac Pro. That computer can’t be easily upgraded by the user, and is made in the US, and I wonder to what extent Apple wants to rethink the form factor but perhaps also wants to end US manufacturing. Beyond that, though, I think we can apply a more charitable version of Hanlon’s razor here – Apple isn’t deliberately de-emphasizing the Mac but rather is focusing resources on other areas, and the Mac is suffering as a result. That may seem a subtle distinction, but it’s an important one because it suggests Apple will get back to the Mac eventually, and I suspect we’ll see that happen in the next few months. In the meantime, Apple’s major creative apps for pros have received major updates recently – Final Cut Pro X in the fall and Logic Pro X earlier this month – which should serve to reassure the base that Apple hasn’t given up on these either.
With the AirPods, it’s clear that Apple discovered some kind of problem that it wanted to fix before it moved to mass shipments, and I actually see the delay as a positive sign, because it suggests Apple is sticking to its quality standards rather than caving to pressure to ship in time for the holidays.
On the Watch front, it is clear that the smartwatch category is smaller than many people had foreseen, because for now it’s mostly about health and fitness and notifications rather than about a wrist-worn computer, though Apple dominates the category in its current form. Watch sales have been decent, and I suspect Q4 2016 sales were healthy off the back of both new models and a significantly lower entry price. Apple’s biggest challenge with new products continues to be that nothing can ever compare to the iPhone, and yet that’s the comparison observers always want to make.
The Apple is Doomed narrative always does best when there are short-term signs of trouble, and the recent revenue declines have certainly been fodder for plenty of rumination on whether Apple has lost its way. I suspect some of this will fade in 2017 if Apple is able to get back to growth, and especially if the next iPhone is the blowout many people are hoping it will be. But I suspect that until Tim Cook announces some completely new product that sells in massive numbers, the narrative won’t go away.
Apple has acquired Workflow, a powerful automation tool for iPad and iPhone – TechCrunch (Mar 22, 2017)
This is a fascinating acquisition in the context of Apple’s recent parting of ways with Sal Saghoian, who ran the Automator app for macOS. That departure had signaled to some people that Apple was abandoning automation as a feature, but this acquisition sends the opposite message. Perhaps more importantly, Workflow is much more user friendly approach to automation than Automator, and what I’d hope we’ll see here is that same approach applied to built-in automation across Apple’s product lines including the Mac. That would make automation a more mainstream proposition, which is an intriguing prospect. That Workflow will remain available in the App Store is interesting too – that’s obviously going to be reassuring to existing users, but there’s no guarantee that it will stay there when Apple is done integrating it into its platforms. Siri stayed available for a time too, but of course disappeared when Apple released its version.
Apple’s App Store Gets a Makeover – Bloomberg (Mar 21, 2017)
The headline makes it sound like there are changes coming to the App Store, but this story is really about all the changes that have already happened on the App Store since Phil Schiller took it over from Eddy Cue a little over a year ago. One of the notable things in the story is the impact that better analytics have had, and how that’s made it easier for more dynamic developers to update their apps more frequently in response to user behavior. More generally, though, the article suggests that big strides have been made in the way the App Store runs from a developer perspective, which is a story that hasn’t been told much. It’s been subtle, and if you’re just a user you might not be aware of most of these changes, but better experiences for developers make for better end user experiences too. I know there are still lots of developers, especially Mac-centric developers, who have complaints they feel have gone unheeded, but Apple has at least made some progress in fixing big pain points on the iOS side.
Apple Debuts Clips, a New Way to Create Videos on iOS (Mar 21, 2017)
Alongside the iPad announcement it made this morning, Apple made three other announcements, of which this is the most interesting (the other two concern a PRODUCT(RED) iPhone and new languages for Swift Playgrounds). Clips looks like a hybrid of Snapchat and iMovie, with lots of new filters, stickers and other effects and an easy editor for creating a montage of video clips and photos, but apparently without any kind of social component. This is a funny sort of inbetweener software product from Apple, which doesn’t have an explicit social network and whose creative tools around editing photos and videos are far less used among young people than those which come with the social networks they use. I don’t necessarily see that changing with this product, though there are some clever-looking features like auto-generating titles. The proof will be in the pudding, though – the app comes out in April, though I’m guessing it may appear in developer betas before then, giving us a chance to try it out. It’s interesting to see Apple experimenting to try to fill a gap here, but I’m not convinced it’s got it right just yet.
Apple today updated its online store and issued a press release around a new 9.7″ iPad, confirming a change in strategy which seemed apparent when the 9.7″ iPad Pro launched but wasn’t made explicit until now. The new iPad drops the Air branding, and offers specs a year or two behind the iPad Pro line, while reducing the price to the lowest in Apple’s iPad lineup, at $329 (the only iPad mini available now is the 128GB model, which starts at $399, meaning that for the first time it’s cheaper to buy the new 9.7″ iPad than the newest iPad mini). What we have now, then, is a clear bifurcation between the iPad Pro, which is the latest and greatest with high-end specs, new features, and accessories like Pencil and the Smart Keyboard, and the more basic and low-end iPad. The iPad Pro is therefore not just the iPad for people who want to replace their laptop, but also the best iPad for everyone else. The iPad, then, becomes the low-cost alternative, the one for people with simpler needs, for giving to kids, and so on. That’s going to do interesting things to average selling prices, which had gone up slightly with the launch of the iPad Pro line and will now come down, but also to Apple’s competitiveness in a price band where it really hasn’t played before, expanding its addressable market. This new iPad is effectively the equivalent of the iPhone SE, taking older innards and wrapping them in new branding to bring the price down to a new level, and I suspect that – like the iPhone SE – it will indeed bring the device to new people. However, I suspect it’ll take quite a bit more share of the overall market than the SE has in iPhones.
Two things worth noting here. Firstly, another big commitment by Apple to China, following its billion0-dollar investment in ride-sharing service Didi last year, with the total of these R&D center investments reaching about half a billion dollars in their own right. That signals again that Apple is very serious about continuing to be a big force in China, and is in fact increasing its investment there rather than backing down. That’s important, because in this piece as in other recent ones on Apple in China, the prevailing narrative is that Apple is losing ground there. At a basic level, of course, there’s truth to that over the past year, with declining iPhone sales, though the picture in PRC as opposed to the Greater China region Apple reports as a segment is a little less clear cut. The reality is that the “super-cycle” driven by the iPhone 6 launch led to unprecedented sales everywhere, but nowhere more than in China, and so the comedown has been that much bigger too. But Apple is positioned to start growing in China again in the coming year, and it will continue to be a crucial market for Apple.
Apple Watch Series 2 Satisfaction & Usage Survey – Wristly (Mar 13, 2017)
Wristly is one of the only organizations out there which does regular Apple Watch user surveys, and as such provides some very useful insights into how users feel about their Watches and how they use them. It’s worth reading the whole thing, but I’ll call out two points in particular: user satisfaction has risen over the past year as the number of users has grown significantly, and the drivers are the new hardware and new software Apple has released in the past year. That both have driven increased satisfaction is obviously good for Apple, but the fact that the new software improved the experience has possibly also worked against bigger hardware sales – I know my first generation Watch performs well enough running the new software that I don’t feel the need to run out and buy a Series 2 device, and I’m guessing the same is true for others. But of course the Watch has sold reasonably well regardless, and so the user base continues to expand, albeit still at a fairly small scale relative to massive mainstream categories like smartphones.
New LG 5K UltraFine Display models work properly near wireless access points including routers – 9to5Mac (Mar 13, 2017)
Just a short update on this earlier story about Apple’s LG monitor partnership, which I’ve covered here. It’s obviously good news that LG has produced a monitor that’s now unaffected by nearby wireless routers, but still bad news that its first version had this fundamental flaw. That speaks both to LG’s lack of quality and Apple’s lack of quality control as a partner, especially for the first monitor from this partnership after years of Apple making its own monitors. Hopefully this is a one-off for both companies, but future monitors from these two will be subject to that much more scrutiny as a result.
Tim Cook is very fond of talking about Apple’s customer satisfaction ratings on earnings calls – he clearly believes these are both the best indicators of whether Apple is being successful and the best determinants of its future prospects. As such, reviews like this one, which focused on online and phone technical support and service for laptops across the top brands, are good news for Apple, given that it came top of the rankings. It’s also worth noting where others did and didn’t score well – Acer, Lenovo, and Microsoft took the next three spots, while Samsung came near the bottom.
The link here is to the PDF of a report from Jamf, which makes Mac management software for enterprises and educational organizations. It naturally has an incentive to push Mac adoption in the enterprise, so it’s worth noting that context, but the findings are broadly in line with what I’ve seen elsewhere. Some key figures: 91% of enterprises use at least some Macs, while 99% use iPhones or iPads; 74% of organizations have seen an increase in Mac adoption; 44% of companies offer employees a choice of Mac or PC, and at IBM for example 73% of employees want to use a Mac as their next computer. The survey of IT decision makers also has majorities saying Macs are easier to manage, configure, secure, and support than PCs. The enterprise is critical to Apple’s future growth given increasing saturation of global smartphone and PC markets, and already accounts for around 10% of revenue. Enterprises providing Macs, iPhones, and iPads as options for employees is therefore a key enabler of future growth here, and Apple’s recent deals with IBM, Cisco, SAP, and Deloitte are all part of its push to make Apple device adoption by companies easier and better.
via Jamf (PDF)