Linked List: April 25, 2012

Wednesday, 25 April 2012

The Original ‘Google Phone’ Presented in 2006 

Juicy stuff from the Google-Oracle trial:

The baseline specs required two soft menu keys, indicating that touchscreens weren’t really in the plan at all.

Wonder where they got the idea to emphasize touchscreens?

Shorting Apple Long-Term 

George F. Colony, writing for Forbes:

When Steve Jobs departed, he took three things with him: 1) singular charismatic leadership that bound the company together and elicited extraordinary performance from its people; 2) the ability to take big risks, and 3) an unparalleled ability to envision and design products.  

Colony’s pessimism is, unlike most Apple bearishness of late, perfectly reasonable. Apple did not fall to pieces when Jobs died, but no one with a clue expected it to. But Tim Cook and the remaining leadership team have yet to prove themselves in the long run. I’m not saying I agree with Colony (I don’t), I’m just saying his argument is reasonable. Apple is untested in these regards.

Apple’s momentum will carry it for 24-48 months. But without the arrival of a new charismatic leader it will move from being a great company to being a good company, with a commensurate step down in revenue growth and product innovation. Like Sony (post Morita), Polaroid (post Land), Apple circa 1985 (post Jobs), and Disney (in the 20 years post Walt Disney), Apple will coast, and then decelerate.

Disney is the comparison I like best. And he’s right, Disney sputtered a bit in the ’70s and ’80s, post-Walt. But look where they are today: the leading family entertainment company in the world, right where Walt left them. Apple should be so lucky 40 years hence.

The big difference is that The Walt Disney Company was in no way prepared for life after Walt. Apple, I think, was.

Shorting Apple Near-Term 

Thomas H. Kee Jr., writing for the WSJ’s MarketWatch:

Not more than a couple short months ago I recommended to investors that they sell Apple. That call was early, I did not anticipate the euphoria that overwhelmed the stock for the past couple of months, but the premise for my recommendation has not changed.

This time Lucy isn’t going to yank the football away, I swear!

Underlying problems at Apple is a competitive environment that has caught up to it. Products from Samsung, Nokia, and Motorola are now direct competitors with the iPhone for example, where a few short years ago they were well behind the curve.

Samsung, Nokia, and Motorola were the leading handset makers before Apple entered the market.

In addition, mobile operating systems like Android from Google are actually dominating the mobile market.

Android is just one example of these dominating mobile operating systems.

Without a doubt, Apple led the way, and they deserve the reward of being first to market with these innovations, but technology catches up fast, and unless Apple continues to innovate at the same pace it did before, it will not stand out from the crowd on a technological basis for long.

Exactly!

‘The Critical Juncture’ 

Re: the previous item, on expanding the iPad market with the $399 iPad 2, recall this analysis from Steve Jobs, in a 2004 Newsweek interview with Steven Levy:

If that’s so, then why is the Mac market share, even after Apple’s recent revival, sputtering at a measly 5 percent? Jobs has a theory about that, too. Once a company devises a great product, he says, it has a monopoly in that realm, and concentrates less on innovation than protecting its turf. “The Mac user interface was a 10-year monopoly,” says Jobs. “Who ended up running the company? Sales guys. At the critical juncture in the late ’80s, when they should have gone for market share, they went for profits. They made obscene profits for several years. And their products became mediocre. And then their monopoly ended with Windows 95. They behaved like a monopoly, and it came back to bite them, which always happens.”

Apple seems to be having it both ways with the iPad, but I suspect they’d prefer to err on the side of maximizing market share than maximizing profits.

I’m trying to keep this in mind as I ponder the idea of a $249 7.8-inch iPad.

The $399 iPad 2 Is Selling 

The ever-astute Matt Richman noted yesterday that average selling prices are down for both the iPhone and iPad:

The $399 iPad 2 must be selling very well for it to make iPad ASP drop more than 8 percent in one quarter.

Tim Cook, during yesterday’s conference call:

On iPad 2, with the change in the entry price to $399, we’re actually thrilled with the results that we’ve seen; although as Peter said, it’s only been a few weeks and so it’s too early to come to a clear conclusion. But from what we are seeing, this unlocked some education demand — that is, probably a more price-sensitive customer — also in several other countries there was a marked change in demand at that price point. And so on the early going, we feel great about it.

In other words: the $399 wasn’t intended simply as a way to get people in the door to be upsold to higher-priced new iPads. It was meant to sell, to expand the iPad user base in price-sensitive markets.

WWDC 2012: June 11-15 

Three years ago it sold out in a month. Two years ago it took a week. Last year it took 12 hours. So, if you want to go, I wouldn’t fuck around.

Update: Sold out in two hours, before the U.S. west coast even woke up.