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Apple's Middle Age

stratechery.com

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Re: Apple's Middle Age

#41

Post by dsr_ »

jballanc wrote: post #8

Any article that speculates on Apple's future viability in the market would be remiss not to mention Apple's unprecedented cash hoard. Currently, Apple is sitting on $126B in net tangible assets. With 100,000 full-time equivalent employees, that means that Apple could pay every one of their full-time equivalent employees (which, as a reminder, includes a large number of retail employees) an average yearly salary of $…

Considered another way, if Apple could make 8% more than inflation on their investments each year, they can run forever without selling anything.

Re: Apple's Middle Age

#42

Post by baxtr »

I really like stratechery, but I don’t get this post. Example

Instead, I think the order goes like this:

Customer owns an iPhone Customer subscribes to Apple Music because it is installed by default on their iPhone As an Apple Music subscriber, customer only has one choice in smart speakers: HomePod (and to make the decision to spend more money palatable, Apple pushes sound quality), from which Apple makes a profit

Well, I don’t know. Maybe it’s just:

Let’s make exceptionally good products that people love

Re: Apple's Middle Age

#43

Post by AnthonyMouse »

adventured wrote: post #20
jballanc wrote: post #8

Any article that speculates on Apple's future viability in the market would be remiss not to mention Apple's unprecedented cash hoard. Currently, Apple is sitting on $126B in net tangible assets. With 100,000 full-time equivalent employees, that means that Apple could pay every one of their full-time equivalent employees (which, as a reminder, includes a large number of retail employees) an average yearly salary of $…

That's not actually how things unfold when a company gets into trouble. Your scenario is the perfect, idealized, never-happens outcome. We have dozens of historical examples at this point, from elite, massive corporations unraveling: what they basically never do, is the strictly rational idealized scenario. What actually happens is closer to chaos loaded with self-interest and stupidity by management and the board. T…

Just because you have a hundred billion dollars doesn't mean it's worth spending it to try (and quite plausibly fail) to topple an entrenched competitor in a tangential line of business. Monolithic corporations are massively inefficient because the combination of wealth and bureaucracy is the recipe for waste. Let them give the money to shareholders -- isn't that why they were supposed to be in business? Then if it makes sense to invest the money in some other line of business, the investors will invest it in some other company doing that thing.

The fact is that smartphones are now a mature product. There will continue to be incremental improvements, but nobody is really expecting a future iPhone to be to the current iPhone what the original iPhone was to Blackberry. The market is now a cash cow. They have an existing technology and customer loyalty that they can milk for multiple years until increasing competition eats away at their margins, doing that is a profitable medium-term strategy, so that's a completely reasonable and expected thing for them to do.

They could invest their cash in some speculative technology and maybe get lucky, but so can their shareholders.

Re: Apple's Middle Age

#44

Post by zimpenfish »

jrs95 wrote: post #24
gergles wrote: post #7

Earlier quoted context omitted.

> Even iPhone X shows they can still bet big with their flagship. Does it? The iPhone X (which is a great phone and one that I own) is a Galaxy S8 with a Face ID scanner. They didn't "bet big" on it, it was the only logical place to take their market.

I generally agree that they didn't "bet big" on iPhone X, but I really hate equating it with the S8 because that was a terrible device in my opinion. First off, just from being in my empty pocket for 2-3 days, the screen was covered in scratches that made it difficult to see a portion of the screen in direct sunlight. I've never had this experience with any other phone. Then I dropped my S8 from less than a foot and…

> based on my experience with recent iPhones it can probably take a lot more abuse.

I closed a taxi door on my iPhone X just before Christmas - phone fell out of my pocket, door caught it horizontally. Cracked the (thin) screen protector but no damage to the phone itself.

Re: Apple's Middle Age

#45

Post by felipeko »

carlmr wrote: post #14
mjburgess wrote: post #11

Earlier quoted context omitted.

People talk about the downsides of this. But it does mean all the tech you buy today is going to be use able in 10ys. That's quite a win.

Capitalism hates it though if there's no reason to sell new devices. Although I think we still have a lot of headroom in terms of memory performance that will matter just as much as the previous CPU performance increases.

Only the companies that sell the devices hate it. For every other entity it is a win as more money will be available to be spent on something else.

Re: Apple's Middle Age

#46

Post by oflannabhra »

The most interesting points of the article were this:

1) iPhone unit sales growth has essentially stagnated, because the overall market has reached saturation. 2) Apple has successfully managed to maintain growth in the face of 1) by increasing revenue per device (ASP).

I think the question of "What does Apple do, now?" is a hugely important one. However, I disagree with the author that the only reasonable approach Apple has is to "settle down" in its middle age position.

That question is important, because it implicitly asks, "What is next?" I don't see Apple deciding to not create a product that attempts to answer that question. We will have to wait and see what that product looks like (AR?), whether it is successful, and when it will come. Apple is definitely not going to rest on the iPhones success forever, though.

Re: Apple's Middle Age

#47

Post by simonh »

carlmr wrote: post #14
mjburgess wrote: post #11

Earlier quoted context omitted.

People talk about the downsides of this. But it does mean all the tech you buy today is going to be use able in 10ys. That's quite a win.

Capitalism hates it though if there's no reason to sell new devices. Although I think we still have a lot of headroom in terms of memory performance that will matter just as much as the previous CPU performance increases.

If the longevity of a product is a selling point, can provide a competitive advantage or help capture a premium then Capitalism is absolutely fine with it.

Re: Apple's Middle Age

#48

Post by simonh »

felipeko wrote: post #45
carlmr wrote: post #14

Earlier quoted context omitted.

Capitalism hates it though if there's no reason to sell new devices. Although I think we still have a lot of headroom in terms of memory performance that will matter just as much as the previous CPU performance increases.

Only the companies that sell the devices hate it. For every other entity it is a win as more money will be available to be spent on something else.

Companies that get a competitive advantage or can command a premium from selling long lived products don't hate it at all. It's the core of their business model.

Re: Apple's Middle Age

#49

Post by winkeltripel »

fhood wrote: post #37
maxsilver wrote: post #31

Earlier quoted context omitted.

That was true in the late 90s. It's not really true anymore. I built a Windows PC using parts from MicroCenter back in 2014. Core i5-4690K, 16GB RAM, 512GB SSD, GTX 970 running Windows 8. It was around $1400 USD at that time, if I remember correctly. It's now 2018. That same PC with all it's original hardware, is now running Windows 10 just as quickly as always. Not only is the performance still great, but my 4-year-…

I don't know if I can agree with you on this. In ~2016 I built a PC (i7, 24GB RAM, 1.5TB ssd, gtx 1080) and my 2014 17 inch mbp has slowly been closing the gap. This is probably more due to software optimizations than hardware, but things just open and close more smoothly and quickly these days on the laptop. I think the real issue is that Windows hasn't been effectively utilizing the RAM I've given it.

I've found that windows benefits from being reinstalled every once in a while. Try a fresh install of Windows 10, and see where that gets you?

Re: Apple's Middle Age

#50

Post by oflannabhra »

oflannabhra wrote: post #46

The most interesting points of the article were this: 1) iPhone unit sales growth has essentially stagnated, because the overall market has reached saturation. 2) Apple has successfully managed to maintain growth in the face of 1) by increasing revenue per device (ASP). I think the question of "What does Apple do, now?" is a hugely important one. However, I disagree with the author that the only reasonable approach A…

I'd add to this that Apple's current approach to AR and wearables is not one that necessitates the cannibalization of the iPhone. They are taking a constellation approach (as noted in the article), with the iPhone in the center.

I think that approach is not one based in defense, but one that actually plays to their strengths: personal products with an excellent experience, vertically integrated. Because of AR's computational requirements, it will be a long time until we have an AR experience that is untethered to a mobile computing device. A vertically integrated, constellation-based system will offer a better user experience, at least initially. Intel's recent Vaunt glasses [1] could be much more powerful if Intel also controlled the entire device the glasses co-ordinated with.

[1] - https://www.theverge.com/2018/2/5/16966530/intel-vaunt-smart...

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