Company / division: Apple
Apple and Nokia Settle Patent Litigation (May 23, 2017)
Apple Launches Website for Android Switchers (May 22, 2017)
A little under two years ago, Apple launched its first Android app, “Move to iOS”, which was designed to help Android users make the switch to an iPhone. Now, Apple has a new section of its website up which is designed explicitly to help (and help convince) Android users switch to the iPhone. Given that almost every buyer of an iPhone in mature markets is going to be an existing smartphone owner, the two key drivers of iPhone sales in those markets are switching from Android and upgrading from earlier iPhones, and both have been a consistent theme on recent Apple earnings calls. So targeting that audience of Android switchers specifically makes perfect sense. The site focuses on a few aspects of buying and owning an iPhone: ease of use, ease of switching, camera quality, speed, privacy and security, iMessage extensions, support from Apple people, and environmental responsibility. Out of all the possible things Apple could emphasize, that’s an interesting list – design, for example, isn’t one of them, though the word appears in other contexts three times on the site, and all the things highlighted here are functional rather than aesthetic. In fact, other than one oblique shot of an iPhone at the top, there isn’t a single full shot of an iPhone or any shot with the screen on until you get to the “buy” section at the bottom. Given how central the design message and product shots have traditionally been to Apple promotional material, that’s an interesting departure and likely reflects research on why people switch from Android. It’s also worth checking out a set of five short videos Apple has made to go along with the site.
Weekly Narrative Video – Streaming is Saving Music (May 19, 2017)
This week’s Narrative Video is on the Streaming is Saving Music narrative. This narrative was in the news several times this week, with Spotify’s 2016 financials leaking, news that SiriusXM is debating a bid for Pandora, and Rhapsody’s announcement that it’s making layoffs and replacing its CEO. The reality is that streaming music is doing wonders for the music labels, but the streaming services themselves continue to struggle. And it’s worth noting that it’s paid subscription streaming specifically that’s really giving the industry a boost. The video talks through these topics and other trends in the industry, reality-checking the prevailing narrative. Subscribers can see the video on the Streaming is Saving Music page. If you’re not yet a subscriber, you can sign up for a 30-day free trial here, and you’ll get access to this video, past videos, all the latest commentary on the site, and lots more besides.
92% of US iPhone Users Plan to Buy Another (May 19, 2017)
We’ve seen some of these stats before, and they bounce around a little from survey to survey, but it’s always good as a reminder of just what makes the iPhone installed base so valuable: the combination of very high loyalty to the platform and the ability to sell a variety of other devices and services to iPhone users. This Morgan Stanley survey released this week says that 92% of current iPhone owners plan to stick with the iPhone when they buy their next smartphone, among the highest levels MS has seen, while Samsung comes second at 77% and other Android vendors score considerably lower. That means that even if smartphone upgrade cycles are lengthening, nearly all of the 100 million or so US iPhone users will eventually buy another, many of them likely this fall with what’s expected to be a big upgrade. With iPhones roughly two thirds of Apple revenue, that’s already tremendously important to its future prospects, but the other key part of this is that those iPhone buyers are likely to buy apps and content from the App and iTunes stores, subscribe to Apple Music, iCloud storage, and so on, and also buy other Apple devices like Watches, iPads and Macs. One of the challenges Apple faces, conversely, is that this loyalty rate isn’t as high in every country, with China one notable exception. Though I’ve only seen one survey referenced on this topic, and I’n not convinced the absolute numbers are right, it certainly seems to be the case that iPhone loyalty has been lower in China recently, with at least some iPhone owners shifting down to a cheaper Android phone from rising stars Oppo and Vivo. If Apple can turn that trend around with this fall’s phones, of course, that could lead to a massive rebound in growth in China.
A few weeks back, I did an episode of the Beyond Devices Podcast on accessibility, in which I interviewed a former colleague of mine, Chris Lewis, who is registered blind. In the episode, Chris talks about how he uses an iPhone and Windows computers along with their various accessibility features and additional software to get his work as an analyst done. This week, Apple has a new set of videos out in which it showcases its accessibility features across various products, which continue to be among the best in the business. But as Chris and I discussed on the podcast, it appears Android and Samsung in particular are getting better at supporting accessibility features too, and Microsoft has also been making more fuss about this lately, although a lot of its PR around accessibility has been around custom projects created by employees and developers rather than standard features. It’s great to see all these companies taking accessibility seriously and using their technology to make a huge difference in the lives of people with vision, hearing, or other impairments. The Apple videos do a great job of conveying just how central these technologies are to the lives their subjects live. The timing is intended to coincide with Global Accessibility Awareness Day tomorrow.
★ Apple Makes First iPhones in India (May 17, 2017)
Apple Reportedly Updating MacBook Line at WWDC (May 16, 2017)
It emerged over the weekend that Apple has acquired Lattice Data, a company which specializes in analyzing unstructured data like text and images to create structured data (i.e. SQL database tables) which can then be analyzed by other computer programs or human beings. TechCrunch has a single source which puts the price paid at $200 million, and Apple has issued its usual generic statement confirming the acquisition but offering no further details. It’s worth briefly comparing the acquisition to Google’s of DeepMind in 2014: that buy was said to cost $500 million and was for 75 employees including several high profile AI experts, though it was unclear to outside observers exactly what it was working on, while this one reportedly brought 20 engineers to Apple and has several existing public applications and projects to point to. Lattice is the commercialized version of Stanford’s DeepDive project, which has already been used for a number of applications involving large existing but unstructured data sets. Lattice has a technique called Distant Supervision which it claims obviates the need for human training and instead relies on existing databases to establish links between items that can be used as a model for determining additional links in new data sets. It’s not clear to me whether the leader of the DeepDive team at Stanford, Christopher Ré, is joining Apple, but he was a MacArthur Genius Grant winner in 2015 and this video from MacArthur is a great summary of the work DeepDive does (there’s also a 30-minute talk by Ré on the DeepDive tech). Seeing Apple make an acquisition of this scale in AI is an indication that, despite not making lots of noise about its AI ambitions publicly, it really is serious about the field and wants to do better at parsing the data at its disposal to create new features and capabilities in its products. It’s entirely possible that we’ll never know exactly how this technology gets used at Apple, but it’s also possible that a year from now at WWDC we hear about some of the techniques Lattice has brought to Apple and applied to some of its products. Interestingly, the code for DeepDive and related projects is open source and available on GitHub, so I’m guessing Apple is acquiring the ability to make further advances in this area as much as the technology in its current form.
Weekly Narrative Video – AR vs VR (May 12, 2017)
This week’s Narrative Video covers the “AR vs VR” narrative, and is available now to subscribers on the AR vs VR narrative page. In this video, I discuss the debate about terminology between AR, VR, and Microsoft’s preferred “Mixed Reality”. But I also talk about the current state of both VR and AR and how I see both playing out over the rest of the year. The narrative has been in the news this week, with Microsoft making announcements about mixed reality at Build, and Magic Leap both reaching out to developers and creatives and allegedly readying another round of funding. If you’re not yet a subscriber, you can sign up for a free 30-day trial to see this and other Weekly Narrative Videos, all this week’s posts and the narrative essays, which are exclusive to subscribers.
Strategy Analytics Says Apple Top Wearables Vendor in Q1 (May 8, 2017)
Apple has done a deal with HP to allow the latter to include its devices in its enterprise device-as-a-service offering for enterprises. This is the latest in a string of deals between Apple and various enterprise-centric partners over recent years – a sign that the enterprise is an increasingly important source of growth for Apple as the consumer market reaches saturation for smartphones and upgrade cycles lengthen. HP will be a channel for all Apple devices, but the two companies are also working together to create some guidelines for various industries in deploying those devices and making the most of them in various applications. Apple’s strategy for the enterprise continues to be mainly leveraging these various third party channels rather than growing its own substantial business sales force, which is smart given Apple’s expertise (and the gaps in it).