Narrative: Apple is Doomed

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    Narrative: Apple is Doomed (Dec 27, 2016)

    Updated: April 7, 2017

    This narrative was the subject of the Weekly Narrative Video on April 7, 2017. You can find the video on YouTube here, or see it embedded at the bottom of this essay.

    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. Update: in early April, Apple announced that it would be updating both the iMac and Mac Pro in the next couple of years, and is completely rethinking the Mac Pro, confirming what I said above about having boxed itself into a corner.

    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 Issues Software Update to Fix WiFi/LTE Bug in Apple Watch (Oct 4, 2017)

    Apple has issued watchOS 4.0.1 for Apple Watches, which fixes the WiFi/LTE bug that caused problems for some Apple Watch reviewers (and presumably some early regular users as well). That’s a pretty quick turnaround but a critical bug fix given how the issue impacted reviews from at least a couple of outlets. I’ve been using the Apple Watch with LTE for the past week and haven’t had the issues described, which I’d guess will be typical for many users, but the bad press Apple deservedly got over the issue was utterly avoidable and a big goof for a company which should have had one of its best launch periods in years. As I mentioned when the reviews first came out, it’ll likely take some new positive coverage of how the Watch works with the fix in place to change perceptions, but I’d hope that going forward the device works well and people can use it as intended.

    via Mac Rumors

    Apple Stock Price Falls Most in 17 Months, Some Suggest Weak Demand for iPhone 8 (Sep 22, 2017)

    This Financial Times piece seems like as good a hook as any to round up the week’s Apple news and to talk about perceptions of weak demand for the iPhone 8. The FT points out that Apple’s stock has had its worst week in 17 months, falling over 5%, as a result of some mixed reviews of its new products and perceived weak demand for new iPhones. As I said earlier in the week, the Apple Watch LTE reviews were particularly problematic, but I think much of the rest of the worry this week is overblown. It has been clear that overall demand for the iPhone 8 during the preorder period and in today’s first day on sale has been a little weak, but it’s also been clear that Apple has still sold out its first week or two of preorder inventory and that there were still lines in major stores despite the years-long decline in retail sales on the first day given the success of online pre-sales. From a financial perspective, all that really matters is that Apple sells a few more iPhones in the first ten days or so than it did last year, and that it has a strong December quarter, which will combine ongoing sales of the iPhone 8 line and the iPhone X line from about a month into the quarter onwards. It certainly seems to be the case that iPhone X interest has dampened early iPhone 8 sales somewhat, but as long as Apple has the X in decent supply in November and December, that needn’t be a problem, and it’s certainly not the case that the iPhone 8 isn’t selling at all. As such, I think Apple will be fine even if overall demand for the 8 line isn’t as strong as for the 7 line last year, but the big wrinkle will be supply of iPhone X models. If those are very constrained throughout the December quarter, that will be a bit more problematic.

    via Financial Times

    Apple TV 4K Reviews Mostly Positive, Note High Price, Some Bemoan Details (Sep 21, 2017)

    For the third day straight, reviews of one of the new products Apple announced last week are out, this time the Apple TV 4K. This is a far less significant launch than either the iPhone 8 or Apple Watch Series 3 given the relatively small numbers in which the box sells, but it’s still worth noting the tenor of the reviews. Once again I’m linking to Techmeme, which decided to lead with Nilay Patel’s Verge review, which based on my reading seems the most critical of the reviews out there. In general, all the reviewers seemed to like Apple’s familiar but somewhat revamped interface and the snappiness enabled by the new A10X chip (the same one which powers the iPad Pro). Where 4K HDR content was available, it was said to look fantastic, and the iTunes pricing for available 4K movies was also noted as a big plus. The biggest downside is predictable: the lack of content, something that also makes 4K TVs a marginal proposition today while the industry suffers from the same chicken/egg problem that plagued HD in its early years, but worse because of the lack of broadcast 4K content. Disney’s absence from iTunes 4K, the incompatibility between the Apple TV and YouTube’s 4K standards, and so on are the notable gaps. But Nilay Patel’s review is the only one I saw that grumbled in depth about other issues – perhaps because he’s a more discerning judge of these things as a high-end AV guy: he noted that the Apple TV doesn’t support Dolby’s Atmos sound configuration to go with the Dolby HDR picture support it does offer, and also pointed out that watching HDR content on the Apple TV 4K is a sub-par experience for now. Overall, it’s a decent set of reviews but for anyone who either doesn’t have a 4K TV or watch content sources with a lot of 4K content, it’s basically irrelevant for now.

    On this topic, you might be interested in the piece I wrote for Techpinions subscribers earlier this week on the current market for smart TV boxes like the Apple TV 4K.

    via Techmeme

    ★ Apple Watch LTE Reviews Mostly Positive But Some Note LTE/WiFi Issues (Sep 20, 2017)

    Following on the heels of yesterday’s iPhone 8 reviews, today the reviews for the Apple Watch Series 3 with LTE came out, and they were rather different in tone, in at least some cases. Whereas yesterday’s reviews were largely positive with some misgivings around the edges, today’s Watch reviews were bifurcated between those that were almost entirely positive and those that noted significant connectivity issues, notably those at the Wall Street Journal and The Verge (once again, I’m linking to the Techmeme roundup here). All seemed to agree that the faster processors and watchOS 4 combine for significantly better performance across multiple areas including fitness and heart rate tracking, app use, and music, but the differences occurred around LTE/WiFI connectivity.

    It appears (there’s a good explainer here) that the Watch tends to try to hop onto so-called captive WiFi networks – those that allow devices to connect without a password but require going through an interstitial or popup before allowing internet access – but can’t progress beyond the interstitial, putting the Watch in an awkward in-between state where it’s connected to WiFi but can’t actually reach the internet. That, in turn, stops the Watch from trying to connect to LTE, which is what you really want it to do in that situation. That should be a relatively easy software fix for Apple, and it’s suggested that’s the case, but it’s baffling that this issue didn’t come up during all the testing that must have gone on over recent months, and as such is an embarrassing slip-up for Apple when the new connectivity options are the key selling point for this device.

    It is notable that not all reviewers experienced the problem, which may be indicative of either their differing use during the review period or their differing earlier use, with some perhaps more prone to hop onto captive WiFi networks with their iPhones (and thereby inadvertently setting up their Watches for failure) than others. At any rate, many regular users likely won’t see those issues either, especially if using the Watch out in the wild rather than in busy urban areas, while those who do will hopefully see the problem fixed very quickly in a software update. Regardless, this clearly wasn’t what Apple was hoping for from these reviews, and it’s likely that the glitches will color perceptions of the Watch at least until Apple does issue a fix and that gets some decent coverage.

    via Techmeme

    iPhone 8 Reviews Suggest Great Cameras, Nice But Familiar Design, Great Performance (Sep 19, 2017)

    The embargo on iPhone 8 and 8 Plus reviews lifted this morning and in its wake came a flurry of reviews from many major tech publications. Rather than link to any one of them, I’m linking below to Techmeme’s roundup, which as usual will give you every possible angle you could want. As is often the case with smartphone reviews, many make the mistake of asking the question of whether it’s worth upgrading from the previous year’s model, which is something very few people ever do. The better question is whether these phones are good upgrades from the models people are still using from two or three years ago. For those upgrading from an iPhone 6 or 6s, the change will be significant: better screens, better audio, much faster chips, longer battery life and wireless charging, better camera performance, and on the Plus model dual cameras with Portrait Mode, Portrait Lighting, and 2x optical zoom, among other things.

    The reviews do suggest that the improvements to the cameras are particularly noteworthy, and the TechCrunch review focuses on that aspect in depth, something I think more smartphone reviews should do. Otherwise, there are some complaints about a too-familiar hardware design (although there are all new materials and finishes this time around in contrast to the last two years), and there’s still some griping about the lack of a headphone jack and the “camera bump”. I’m looking forward to getting my hands on the 8 Plus later this week and spending some time testing it myself, but my guess is the iPhone 8 line is a really solid upgrade for many people considering one this year and will be the devices many of this year’s upgraders will end up picking. However, as I said in yesterday’s item about preorders, there will be many waiting to take a closer look at the iPhone X, an approach certainly endorsed by at least some of the reviewers of the 8.

    via Techmeme

    iPhone Pre-Order Wait Times Remain Short After First Weekend (Sep 18, 2017)

    Like others, I was up at the local equivalent of midnight on Friday to place preorders for a couple of Apple devices as they went live, and it’s now been four days since that window opened. What was apparent as early as Friday was that most of the devices were still in pretty decent supply for delivery on day 1 – September 22 – or shortly thereafter, and on the following Monday pretty much every device I’ve checked in the US is available within “1-2 weeks” on Apple’s site. There are two ways to interpret this pretty decent supply four days in: either fewer people than usual are ordering devices, or Apple has got better at making enough to fulfill early demand. Given Apple’s guidance for the September quarter, it’s been clear for some time that it certainly believed it would sell plenty of devices in the first week and a half or so, and likely more than last year. With the prices for the iPhone 8 line being slightly higher than last year’s iPhone 7, the amount by which sales need to grow is smaller, but they likely do still need to grow year on year, which means at least part of the explanation for the shorter wait times is more devices being available for shipping in time for the launch.

    But I also think it’s almost certainly the case that at least some who might otherwise have ordered an iPhone 8 are waiting for the iPhone X, depressing early demand somewhat. That will all come out in the wash during the December quarter, with the X available for nearly two months, but it does mean we could see some interesting things happen in the September quarter. Despite those higher overall prices, if a disproportionate number of those who might otherwise have ordered an 8 Plus opt instead for an X, then ASPs in the first week and a half or so might actually be down on last year, requiring rather stronger unit sales. There are so many moving parts here, but I come back to Apple’s guidance, which at the very least suggests that it was very confident of having more devices available to sell. The earnings call this coming quarter is going to be a fascinating one when it comes to this topic.

    via Business Insider

    ★ Apple Announces Upgraded Watch and TV Devices (Sep 12, 2017)

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    ★ Apple Announces iPhone 8 and X (Sep 12, 2017)

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    Apple Captured 85% of “Totally Wireless” Earbud Sales in the US Since December (Sep 1, 2017)

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