Category Archives: Apple Inc

10 reasons why Apple is to blame for the decline of iPad sales

KGI

It has been a tough slough for Apple’s iPad since the height of its popularity in 2013. Facing its second straight year of negative growth, there isn’t a consensus on why iPad sales have declined. I believe the slump is attributable to a combination of factors.

Apple CEO Tim Cook called the declining iPad sales a “speed bump” last year before the launch of the 2014 models, but we haven’t seen what Apple plans to do to rejuvenate the product. From my point of view, Apple itself has done more to hurt iPad sales than any external factor, such as Microsoft or Google.

But that’s not necessarily a bad thing. Here’s a full explanation of my theory…

1. Apple’s bigger iPhone 6 Plus phablet has made the once popular iPad mini all but pointless. That’s not entirely true – there are significant cost differences and over 2 inches of additional diagonal screen real estate – but having a huge iPhone makes having a small tablet a lot less desirable. Combine that with the fact that most people buy their phones subsidized, and a much faster, sleeker iPhone 6 Plus costs about the same as an iPad mini up front.

Below the cannibalization of the iPad is shown in a chart from Credit Suisse. Characterizing phablets as “4+ inches” seems a little out of date, but the point is clear, phablets like the iPhone 6 are eating into tablet share across the board.
phablet killing ipad

2. This year’s iPad hardware updates weren’t terribly magical. The iPad mini got Touch ID (at a $100 price premium). The Air 2 got both faster and lighter, which is always great. And both became available in gold. But for people like me who are very content with the iPad Air – discussed in point 10 below – adding Touch ID or a golden housing wasn’t a big enough incentive to upgrade. Would sales have taken off if Apple offered more storage on the lower end, more laptop-like features, or lower costs?

3. New tiny 12-inch MacBook sales will impact professional/luxury iPad users. The 2-lb light weight and super portability will bring over folks who can spend a lot to get the latest technology. In fact, lowering the prices on the very popular MacBook Air to near cost parity per GB basis also makes a MacBook Air seem like the better deal (128GB MacBook Air: $899 retail, but often lower, versus 128GB iPad w/cellular: $829).

When I go to bed at night and have my iPad Air for consumption, there is often something important that I can only do well on my Mac (like adding something important to this post). This has happened so many times that the iPad doesn’t get picked up at bedtime much anymore. If I lost my iPad Air this week, I’d probably replace it with a MacBook.

4. Split screen iPad support and other laptop-like functionality is late in coming. If those features come out this year, and I think they will, a lot of professionals will jump on board. Currently functionality that makes an iPad a better solution to a problem than a laptop is often lacking.

5. Microsoft and its ecosystem have been making inroads into the professional ranks. You have to admit some of the hardware the Windows folks are putting out isn’t bad, especially when a hybrid computer can go from a MacBook Air form factor into a tablet form factor with a swinging hinge. Yes, I know Apple’s philosophy is not to marry toasters and refrigerators, but tablets and laptops aren’t that different anymore.

Even if they aren’t right, many folks will choose a convertible laptop-tablet PC over an iPad or a MacBook for that matter.

6imgres. Chromebooks in education. Google Chromebooks have been eating Apple’s lunch in education and ironically the iconic appeal of the iPad is partially responsible. A sysadmin for a large school district tells me that the iPad trials went something like this: 100 iPads were given out to 4th graders. Within a month, over 50% of them went missing, and a few of them broke, while 10% of them were jailbroken or hacked. At the same time, with a similar Chromebook rollout, only 10% went missing, a few of them broke, and none of them were hacked (though it is certainly hackable). Give kids free iPads and they’ll have a tendency to disappear or get subverted for personal gain.

Apple has done some work in getting its iPads in schools with some noted success and other spectacular failures.  A new initiative may really help but the fact that most schools either have Microsoft or Google email/apps on the backend means it is going to be tough.

7.  Pricing. Apple could sell iPads at lower price points if it really wanted to. In fact, we’ve seen major retailers cutting as much as $130 off the price of new iPad Air 2s, and up to $200 on the high-end models. Subsidies are another option. Apple was able to stave off any encroachment from the Amazon Fire Phone because it offers iPhones at low price points (including “free” with plan). Apple, however, has no protection for its iPad line when Amazon comes in at $100 or less for a new Fire tablet. Fire tablets continue to be popular though Amazon won’t let you know any numbers.  Spotting a Fire Phone is harder than finding a Sasquatch.

Also, 16GB is not enough space on the low end. Apple can afford to pop in 32GB of storage on the entry-level iPads and I think they will go up to this amount this year. 16GB isn’t enough for even a base model iPhone in my opinion, and with the bigger display, iPad apps need bigger files.

8. Killer App? You need a smartphone for certain things. You need a computing device for other things. There are very few apps that need an iPad, especially when you have a big iPhone in your pocket and a 2 lb. Mac next to your bed.

9. Marketing and the Apple Watch. iPad hasn’t been getting the marketing spend it got in its first years for a variety of reasons. Last year Apple had the big iPhones to explain to the public. Before that it was iOS 7’s new look and feel. This year it seems Apple is focusing its attention and every extra marketing dollar on the Apple Watch.

But Apple Watch isn’t just hurting the iPad from a marketing standpoint. Those of us who have a yearly Apple discretionary fund of $500 or so bucks aren’t likely going to put it towards the iPad this year. And Apple announced the Watch right before the holiday shopping season. Sure, that was mostly to dissuade people from buying other watches, but some folks also probably held off on Apple purchases.

ipad-iphone-mac

On a higher level, it also makes me wonder if Apple’s got a new paradigm. Instead of iPhone|iPad|Mac, is Apple now promoting: Watch+CarPlay+Apple TV+Accessories|iPhone|Mac in its “3 screens” paradigm? Where does iPad fit?

10. Perhaps this is unintuitive, but Apple’s incredible build quality coupled with genuine efforts to update old iPads to the latest version of iOS has made the decision to purchase a new iPad a difficult one. My old iPads still look, feel and work great. My son can still use our original iPad and a lot of the apps he likes. I bought an iPad Air last year, and it is hard to justify the purchase of a new one (even though retailers are discounting the heck out of them). My wife uses an iPad 3, and for what she does on it, there is no reason to update.

The good news here is that much of the iPad’s sales decline can be fixed by Apple, because it’s responsible for most of the issues above. An iPad Pro, price drops, a better iPad iOS version with split-screen support, and better integration with keyboards are all ways Apple could stop the decline in iPad sales and get the platform growing again. More and more engaging marketing wouldn’t hurt, either.

Perhaps Apple can fit iPad in between the Apple Watch launch and the launch of the new Apple TV?


Filed under: AAPL Company, iOS Devices, Opinion Tagged: Apple Inc, Apple watch, decline, iOS, iPad, iPhone, Market share, Microsoft, Revenue

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Apple focusing on cloud performance improvements, also bought UK data efficiency company

data-center

Bloomberg did some digging around after Apple’s acquisition of FoundationDB, believed to be geared to improving the performance of its cloud services (something it could definitely benefit from), and found that the company also acquired a British data analysis company back in 2013, likely for the same reason.

The purchase of [FoundationDB] follows a deal for closely held Acunu Ltd., a U.K.-based data analysis company, Apple said.

Both purchases show Apple is placing more emphasis on the development of solid data infrastructure to help provide services to its legions of global consumers beyond iPhones and iPads.

Acunu produced technology to provide analytics on databases. Its technology can work with and improve other tools, like the free Cassandra database, which Apple runs on several thousand computers.


Filed under: AAPL Company Tagged: Acunu, Acunu Ltd, Apple Inc, FoundationDB, icloud

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Tim Cook reflects on the role of running a post-Steve Jobs Apple as Fortune names him “greatest leader”

Fortune has today named Tim Cook #1 on its list of the World’s 50 Greatest Leaders, publishing an extensive profile of the Apple CEO in which he reflects on the lessons he’s learned in the time he’s been running the company.

Taking over from Steve was not, he said, an easy transition, and he gained a new appreciation for the way that the co-founder had shielded him and the rest of the team from public criticism.

What I learned after Steve passed away, what I had known only at a theoretical level, an academic level maybe, was that he was an incredible heat shield for us, his executive team. None of us probably appreciated that enough […] but he really took any kind of spears that were thrown. He took the praise as well. But to be honest, the intensity was more than I would ever have expected.

Claims that Apple had lost its ability to innovate under Cook’s leadership were, he said, something he had to learn to block out … 

Cook said he’d always had the skill of blocking out the noise, but had to take it to a whole new level when he took over as CEO.

I thought I was reasonable at that before, but I’ve had to become great at it […]

I’m not running for office. I don’t need your vote. I have to feel myself doing what’s right. If I’m the arbiter of that instead of letting the guy on TV be that. or someone who doesn’t know me at all, then I think that’s a much better way to live.

Senior VP Eddy Cue said that Cook “never tried to be Steve [but] tried to always be himself.”

Cook said that he’d made mistakes along the way, giving the example of his decision to hire former UK Dixons head John Browett, a man not noted for his people skills.

That was a reminder to me of the critical importance of cultural fit, and that it takes some time to learn that. [As CEO] you’re engaged in so many things that each particular thing gets a little less attention.

The woman Cook chose to replace Browett as retail head, Angela Ahrendts, says that she did not initially think she’d accept the post (“My life was perfect”) but was completely won over by Cook.

I just absolutely loved his integrity, his values. Nothing anybody can write, say, or do is going to take him off of always doing the right thing. Not just for Apple, but for Apple’s people, for communities, for countries. The world needs more leaders like Tim.

The feeling is, says Cook, mutual.

She’s a perfect culture fit. Within a week, it felt like she’d been there a year. And now it feels like she’s been there multiple years. When you start to finish each other’s sentences, this is a good thing.

Jeff Williams, Apple’s senior VP of operations, says that the CEO is not fazed by failures, like the GT Advanced Technologies mess, where Apple had to abandon its plans to buy high-volume sapphire displays from the now-bankrupt company.

When I informed Tim of the problem, his response was, ‘Let’s see what we can learn from it.’

Cook himself says it’s all about thinking of the long-term, which is why he also resists pressure from investors who want Apple to do things differently.

The kind of investors we seek are long term because that’s how we make our decisions. If you’re a short-term investor, obviously you’ve got the right to buy the stock and trade it the way you want. It’s your decision. But I want everybody to know that’s not how we run the company.

The decision to make senior execs more available to the media stemmed from the same desire to think of the long-term good of the company.

My objective is to raise the public profile of several of the folks on the executive team, and others as well. Because I think that’s good for Apple at the end of the day.

Cook was praised for his decision to come out as gay, but says that the decision had not been an easy one.

“To be honest, if I would not have come to the conclusion that it would likely help other people, I would have never done it,” he says. “There’s no joy in me putting my life in view.” Referencing the often-cited line that ‘to whom much is given, much is required,’ Cook says, “I’ve certainly been given a lot.”

Changing the world has, he says, always been a bigger priority than making money. As for his own personal fortune – around $120M in stock as of today, with a further $66M vesting later – he doesn’t plan to keep it.

He plans to give away all his wealth, after providing for the college education of his 10-year-old nephew […] Cook says that he has already begun donating money quietly, but that he plans to take time to develop a systematic approach to philanthropy rather than simply writing checks.

The full profile is well worth reading.


Filed under: AAPL Company Tagged: Angela Ahrendts, Apple Inc, Eddy Cue, Jonathan Ive, Steve Jobs, Tim Cook, Tim Cook Fortune, Tim Cook interview, Tim Cook profile

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Apple building funky-looking R&D center in Yokohama, Japan, opening next year

yokohama

This render provides our first look at Apple’s plan to build a sizeable new R&D center in Japan. We first heard that Apple would be building a facility “on par with Apple’s biggest R&D centers in Asia” from the Japanese Prime Minister late last year.

Japanese news site NHK reports that the center will be built on the outskirts of Yokohama, the second biggest city in Japan after nearby Tokyo. The city’s mayor announced in a news conference that Apple had purchased the remains of a Panasonic factory on the site, and would be building a 25,000 square meter facility over four floors. The scale of the building would suggest that it could accommodate around several hundred employees, though Apple may of course be allowing for future expansion.

Unsurprisingly, the planned building is said to be environmentally friendly, designed to use low levels of energy, recycled water and trees planted on the roof. Construction is scheduled to begin before the end of the year, completing at some point next year.

Yokohama has a population of 3.7M people, and is one of Japan’s major port cities.

While Apple’s new spaceship campus will allow it to house many more of its employees on a single site, having satellite offices around the world allows Apple to tap into local expertise and hire talent who might be unwilling to relocate to the USA.

Other satellite R&D facilities include chip development in both Israel and Florida, software engineering in Seattle, Siri work in Boston, an Apple University program in China, likely image analysis work in Sweden and unspecified R&D offices in England, probably intended to tap academic research expertise.

Via Macotakara


Filed under: AAPL Company Tagged: AAPL, Apple Inc, Japan, R&D, research, Satellite office, Tokyo, Yokohama

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“He could be a jerk, but never an a-hole” sums up Becoming Steve Jobs, says inner circle journalist

steve-jobs

The conflicting biographies of Steve Jobs, one authorized by its subject prior to his death, the other endorsed by Apple, paint quite different pictures of the man. Walter Isaacson’s Steve Jobs focuses more on his flaws, while Becoming Steve Jobs describes a softer, more rounded person.

A tech journalist who knew Steve well, Steven Levy, has weighed in with his own take in an interesting blog post, The War Over Who Steve Jobs Was. He said that one quote from Becoming Steve Jobs summed-up the view presented by Schlender and Tetzeli.

He could be a jerk, but never an asshole.

Levy says that many of those close to Steve shared the view expressed by Tim Cook on Isaacson’s biography, published soon after Steve’s death, that it did a “tremendous disservice” to him. Jony Ive said that his own regard for the book “couldn’t be any lower” … 

While Isaacson’s biography did describe Steve’s achievements, many felt it conveyed a negative impression of the man himself, focusing too much on his younger days and not enough on the more mature person he became.

Privately, those closest to Jobs complained that Isaacson’s portrait focused too heavily on the Apple CEO’s worst behavior, and failed to present a 360-degree view of the person they knew. Though the book Steve Jobs gave copious evidence of its subject’s talent and achievements, millions of readers finished the book believing that he could be described with a word that rhymes with “gas hole.”

It was this, thinks Levy, that eventually persuaded Apple to lend its support to Becoming Steve Jobs, the interviews with Cook, Katie Cotton and others “seemingly granted to get the record straight.” The quotes very much reflect this desire, he argues.

Judging from the quotes from the interviews its members gave the authors, they very much had the Isaacson book in mind when offering up anecdotes about Jobs.

Pixar CEO Ed Catmull, also interviewed for the book, said he hoped the latest biography “will be recognized as the definitive history.”

Levy himself is less critical of Isaacson’s work.

In my view, Cook’s dismissal of Isaacson’s book as just a sloppy rehash is somewhat over the top. I came to Isaacson’s book with a lot of knowledge about Steve Jobs, yet I learned many new details from over 40 interviews Jobs gave to Isaacson, as well from some interviews Isaacson won because Jobs prevailed on people to cooperate with the book. No matter what one thinks of Isaacson’s book, it is absolutely permeated, as is appropriate, with the voice of its subject.

Levy also observes that there was no getting around the less appealing aspects of Steve’s personality and behavior, and that Becoming Steve Jobs devotes a full chapter – titled Blind Spots, Grudges and Sharp Elbows – to addressing these. He notes that while Steve made fun of others, he also made fun of his own demanding nature.

I once asked the Beatle-loving Jobs if his dream was to have Paul McCartney perform one of those two-song sets that often closed his product launch events. “No,” he told me. “My dream is to have John Lennon perform.”

Both books play their part, in Levy’s view, though “only in Becoming Steve Jobs do I recognize the complexity and warmth that I saw first-hand in Jobs, particularly in the last few years of his life.”


Filed under: AAPL Company Tagged: Apple Inc, Becoming Steve Jobs, Eddy Cue, Fast Company (magazine), Jonathan Ive, Steve Jobs, Steve Jobs (book), Steve Jobs biographies, Steve Jobs biography, Walter Isaacson

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Woz only wants Sport Apple Watch, thinks a car is the ‘perfect territory’ for Apple

woz

Interviewed in Australia’s Financial Review, Apple co-founder Steve Wozniak said that he will only be buying the entry-level Apple Watch Sport, for now at least.

If you buy the really high-priced ones, the jewellery ones, then you’re not buying a smartwatch that has a bunch of apps … Like a Rolex watch, you’re buying if for prestige and a label and a symbol of who you are […] and for an engineer like me I don’t live in that world, that’s not my world.”

Woz said he’d previously tried and discarded other smartwatches like the Samsung Galaxy Gear once the novelty had worn off, but might splash out on an Apple Watch Edition later if he found himself using the cheaper model “every single day.”

Wozniak, a big Tesla fan, also said that he didn’t know whether Apple was making a car (although technically still an employee or “Fellow”, he has no active involvement with the company) but he did think the idea made sense.

There are an awful lot of companies right now who are playing with electric cars, and there’s a lot more playing with self-driving cars, this is the future and it might be huge … there are so many openings here and it is perfect territory for a company like Apple.

Woz echoed comments by Stephen Hawking and Elon Musk that computers would eventually supercede humans, saying he was unsure whether people would be viewed as gods, pets or ants, but that Moore’s Law may save us. Transistors cannot keep halving in size because by 2020 they’d be down to the size of a single atom, and quantum computing–theoretically operating at a sub-atomic level–has so far made no real progress.

I hope it does come, and we should pursue it because it is about scientific exploring, but in the end we just may have created the species that is above us.”


Filed under: AAPL Company, Apple Car, Apple Watch Tagged: Apple Car, Apple Inc, Apple watch, Apple Watch Edition, Apple Watch Sport, Steve Wozniak, Woz

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Apple says it participated in ‘Becoming Steve Jobs’ book from a sense of responsibility to Steve

BecomingSJ

In the first official statement about Apple’s decision to allow Tim Cook and other senior executives to be interviewed for Becoming Steve Jobs, company spokesman Steve Dowling said it was from a sense of responsibility to Steve’s memory.

After a long period of reflection following Steve’s death, we felt a sense of responsibility to say more about the Steve we knew. We decided to participate in Brent and Rick’s book because of Brent’s long relationship with Steve, which gave him a unique perspective on Steve’s life. The book captures Steve better than anything else we’ve seen, and we are happy we decided to participate.

Apple had initially refused interview requests by authors Brent Schlender and Rick Tetzeli, the company taking 18 months to change its mind, reports the NY Times … 

The pair first approached Apple about the unauthorized biography in 2012, and were told the company would not give any interviews.

“I think our patience and quiet perseverance was what eventually won them over,” said Mr. Schlender, who covered Mr. Jobs for almost 25 years.

Tim Cook has been extremely critical of Walter Isaacson’s earlier biography, simply entitled Steve Jobs, authorized by Steve before his death and published afterwards. Cook said that the portrayal of Steve in Isaaccon’s book did a “tremendous disservice” to him, failing to capture the man he had known. Cook revealed in an interview that Steve had refused Cook’s offer to donate part of his liver.

Apple has been actively promoting Becoming Steve Jobs on Twitter and on iBooks, describing it as the “only book about Steve recommended by the people who knew him best.” The company has made a free sample of the biography available on iBooks.

The book, which goes on sale tomorrow, is available for pre-order now from iBooks ($14.99) and Kindle, with the pre-order price of the hardcover edition currently at $19.83 instead of the regular $30. An audiobook is also available.


Filed under: AAPL Company Tagged: Apple Inc, Becoming Steve Jobs, Eddy Cue, Fast Company (magazine), Jonathan Ive, Steve Jobs, Steve Jobs (book), Walter Isaacson

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