Linked List: May 1, 2018

Tuesday, 1 May 2018

Former Verizon CEO Claims Bob Iger Had a Prototype iPhone in July 2006 ★

Ivan Seidenberg, CEO of Verizon from 2000 to 2011, has a new book. FierceWireless has an excerpt, ostensibly explaining why AT&T launched the original iPhone and Verizon didn’t. Spoiler: Apple was committed to GSM, and Verizon’s network was CDMA. Not that interesting a story, really. What is very interesting to me is this anecdote:

Seidenberg was attending the annual media conference sponsored by the investment banking firm Allen & Co. in July 2006 when he saw Walt Disney Chief Executive Bob Iger. He was looking intently at what appeared to be an oddly shaped cellphone in his hand. Seidenberg asked him about it as Iger put away the device as discreetly as possible. “This is going to change the world,” Iger said cryptically.

That was Verizon’s first, albeit partial, view of the Apple iPhone that would indeed change the world of telecommunications. Seidenberg checked in with the Verizon Wireless leadership when he returned from the conference. “We’ve been hearing about this. We don’t know,” was the response. They knew that Apple CEO Steve Jobs was on Disney’s board of directors. They assumed that meant Iger was looking at an Apple device. Tapping industry and Apple sources led them to the conclusion that Apple was readying a next-generation cellphone that clearly was intended to leapfrog the competition.

I find this extremely hard to believe. The iPhone wasn’t unveiled until January 2007, and even then, many of its apps were just placeholder screenshots. It didn’t launch until the end of June 2007. So what Seidenberg is saying is that he thinks Bob Iger was carrying and using a prototype iPhone six months before it was announced — and remember, when it was announced, everything about it dropped as a complete surprise — and a full year before it shipped?

Yes, Jobs was on the Disney board. But Iger wasn’t on the Apple board. Why in the world would Steve Jobs trust Bob Iger with one? It is possible — I’ve asked around and July 2006 was about as early as this could have possibly happened — but it strikes me as very implausible.

Update: The more I think about it, the more convinced I am that this story is bullshit. As Glenn Fleishman points out, the iPhone prototypes that select press got to see post-keynote in January, six months after this story ostensibly took place, could barely do anything useful. It’s probably true that those press demo units weren’t an indication of where Apple’s internal prototype software was at the time, but just consider this question. My answer: no way.

And furthermore, Disney’s ESPN phone — remember this great Steve Jobs story? — had just launched on 30 June 2006. Why would Jobs have even shown the iPhone, let alone given a prototype to carry around, to someone he should have seen as a competitor?

Update 2: More reason to call bullshit on this: last year in an on-stage interview with John Markoff, Scott Forstall claimed that for months after they were midway through development, the only two people in the world carrying an iPhone outside Apple’s campus were him and Steve Jobs.

‘Fanned’ ★

Mark Gurman, writing for Bloomberg after Apple’s earnings announcement:

Concern about the iPhone business was fanned by suppliers that recently reported weak demand for high-end handsets, another sign the smartphone boom that made Apple the most-valuable company is ebbing. It has also been under pressure in China, where some consumers are shunning pricey iPhones and local rivals like Oppo and Vivo are grabbing market share. Tuesday’s report eased these fears, with China revenue rising 21 percent year-over-year.

Concern about the iPhone business wasn’t fanned by suppliers — it was fanned by publications like Bloomberg that drew gloomy conclusions about iPhone sales from those suppliers and the jackass analysts hyping them. Watch this 2-minute video from Gurman yesterday, or this slightly different video from this morning, and tell me who was “fanning the concern”.

Year over year, iPhone sales were up 3 percent on unit sales, but 14 percent on revenue. Unit sales are close to flat, but Apple grew revenue by double digits. There’s no other way to explain it than that iPhone X is a hit.

Sounds Like It’s Samsung’s Flexible OLED Phones Whose Sales Are Weak ★

Last week Bloomberg reported:

Samsung Electronics Co. is the latest Apple Inc. supplier to offer a sign of weaker iPhone X sales, saying that it’s seeing slow demand for the screens used in the flagship product.

The South Korean electronics manufacturer said in an earnings report today that profits for its display business “were affected by slow demand for flexible OLED panels.” The division’s sales rose 3.4 percent in the latest quarter, compared with 20 percent for Samsung as a whole.

Flexible OLED panels are the screens used inside the iPhone X, and those are supplied exclusively by Samsung. Other component makers for Apple, which reports quarterly earnings results next week, have also issued gloomy outlooks pointing to lackluster demand for the top-end phone.

Regarding this report, I wrote:

Starting to sound like iPhone X sales really are falling short of expectations. You often can’t judge iPhone sales from the perspective of a component maker, because Apple could have switched to another company for the same component. But these flexible OLED displays only come from Samsung. Apple reports earnings for the first calendar quarter on Tuesday.

Since we now know iPhone X sales remained strong in the March quarter — outselling every other iPhone model every week of the quarter, according to Tim Cook — and that Apple hit its revenue forecast square on the nose, it must mean Samsung’s “slow demand for flexible OLED panels” wasn’t due to the iPhone X. Which probably means it was Samsung’s own high-end phones.

Not sure what I was thinking when I gave so much credence to Bloomberg’s take on Samsung’s remarks. Poor iPhone X sales would’ve only been a firm conclusion from the above statement if the iPhone X were the only phone using Samsung’s flexible OLED panels.

Apple Reports Q2 2018 Results; iPhone X Remains Most Popular Model ★

Apple:

Apple today announced financial results for its fiscal 2018 second quarter ended March 31, 2018. The Company posted quarterly revenue of $61.1 billion, an increase of 16 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.73, up 30 percent. International sales accounted for 65 percent of the quarter’s revenue.

“We’re thrilled to report our best March quarter ever, with strong revenue growth in iPhone, Services and Wearables,” said Tim Cook, Apple’s CEO. “Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan.”

So much for all that horseshit about iPhone X sales being disappointing — average sales price for iPhones is way up year-over-year.

Any Company Using Facebook for User ID Is Foolish ★

Nick Statt, reporting for The Verge:

Facebook is adding a dating layer to its main mobile app, CEO Mark Zuckerberg announced today during the company’s F8 developers conference keynote in San Jose, California. The features are a long time coming for the 14-year-old social network, which has allowed users to broadcast whether they’re single or in a relationship since it first went live in February 2004.

The move will likely transform Facebook, with its more than 2.2 billion monthly active users, into a major competitor of Match Group, which owns and operates mobile dating app Tinder and popular dating platform OkCupid. Match Group’s stock plummeted by more than 17 percent as soon as the news was announced.

John Kneeland on Twitter:

Step 1: get dating apps to build themselves on your platform’s data
Step 2: cut them off from your platform’s data with no warning
Step 3: build a competitor to dating apps with the data you are now keeping to yourself

Seems kinda antitrust-ish…

It should be illegal, given Facebook’s monopoly status. But every company that has ever trusted Facebook like this should have known better all along. There was never any reason for Tinder to trust Facebook not to do this, and a bunch of reasons to suspect they would. Yet even today, when you go to sign up for Tinder, they heavily steer you toward signing up via Facebook; the option to sign up using your phone number is so faint it’s hard to read and looks disabled. It practically screams, “Don’t use this, sign in with Facebook using the bright cheery easy-to-read button above.” (And who wants to share their phone number? Why not email?)

Facebook looks like the rapacious Gates-era “I think I’ll have all the mashed potatoes” Microsoft. Tinder looks like fools.