AAPL: “There’s No Money in Software”

Apple releasing iOS7, Mavericks, iLife, and iWork means Apple (still) doesn’t see the value in software. This shift means Apple’s execs are betting in more consumers upgrading higher-margin Apple-made hardware more frequently. Historically, Apple hardware has a 2x lifespan (3-5 yrs) compared against other hardware (Dell, HP come to mind immediately). Have Apple’s recent hardware releases been such significant leaps forward that my current devices so inadequate as to be replaced immediately?

No. Not at all.

In fact, Apple seems to have gone to great lengths to insure my 2+ year old laptop and iPhone 4s run their latest version of their corresponding OS. Unless these upgrades cause my daily machines to slow to a crawl (which I’m not going to tempt for I see no significant benefit to upgrading) I foresee no reason to open my wallet to Apple. There are arguments that this $0 upgrade fee is a front against an Android- or Windows-esque platform fragmentation. Perhaps, but unlike Android & Windows, platform fragment in the Apple ecosystem can only come from 2 places: Apple or Apple’s user base. Perhaps Apple is finally large enough to have a non-trivial % of stubborn, lazy, non-upgrading customers (like me and many corporations I work with). Maybe. But, are the advertised benefits of upgrading today so significant that upgrading is a must?

No. Not at all.

In fact, upgrading seems to be disabling WiFi in some iPhones and the iWorks suite now has a fraction of it’s previous capabilities.

So, if it’s a fight against platform fragmentation – it’s a war internal at Apple. And based on the announcements, the winning side is the one where software is managed through iTunes.

Removing prices (and functionality) on house software is admitting they’ve built a culture where customers expected software to be free. Will Apple will continue to take strategy cues from the most successful third party iOS software and grow in-app purchases within iWork into a significant source of revenue.

Either way, if you’re a developer in the Apple ecosystem (iOS or Mac) this is one more reason to find a non-Apple revenue stream.

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Apple Ressurects AT&T’s “You Will” Ad Campaign

“In what should be a warm, humanizing montage, people are constantly directing their attention away from one another and the real, panoramic world to soak in pixels. They’re choosing the experience of their products over the experience of other people several times in quick succession. And Apple has a warm voice in the background, goading us on.” – Mark Wilson

Yes, I agree in 20 years this Apple ad will seem as ridiculously quaint as overly-technology-ified as AT&T’s “You Will” campaign from the 1990’s.

Have you ever felt that technology is far less useful than it promises to be?

You Will.

better than I can skeu it

“But when skeuomorphs get in the way of how we actually use something or build something, they demonstrate a lack of imagination or even cowardice on the part of the designer.…Yes, it’s far easier to get understanding or buy in quickly (from investors, in-laws and users) when you take the shortcut of making your digital thing look and work just like the trusted and proven non-digital thing. But over and over again, we see that the winner doesn’t look at all like the old thing. eBay doesn’t look like Sotheby’s. Amazon doesn’t look like a bookstore. The funding for AirBnB doesn’t look like what it took to get Marriott off the ground” – Seth Godin

Above, Seth Godin nicely articulates my feelings about the skeumorphic design popularized by Apple’s iOS applications. It’s an admittance that the UI design teams (Apple’s in particular, since they started it) don’t know what to do. That they haven’t actually spent the time to think about how a calendar, address book, et al are different, let along how they can be different when they’re on a such a new, futuristic, imaginative device like pocket-sized touch-screen computer.

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The iPad Mini is about Killing the iPod Touch

The iPod touch has always been Apple’s odd model out. More than an iPod yet significantly less than than an iPhone.

Three years ago, I bought an iPod touch because I wanted the iOS experience without being tied to AT&T. These days the iPhone is available on multiple carriers and the iPod touch finally has a camera.

In between times, Apple didn’t know if the iPod touch was “training wheels for the iPhone” a competitor to the Sony Playstation Portable or just a colorful camera that can play music.

Hardly compelling compared to the iPad’s positioning of transformative convenience.

Hell, this isn’t even compelling against multi-touch iPod nano that’s half the size and half the price.

Apple’s ~8″ iPad mini debuted at $30 more than the 4″ iPod touch. Twice the screen size and half the storage space for just over the $300 price point. For an additional charge, a persistent cellular broadband connection is available through AT&T, Sprint, and Verizon.

No such broadband option exists for the iPod touch. Making the iPod touch once again the odd model out.

Historically, Apple’s responses to competitors has always been strategic – not direct and obvious. Additionally, they’ve always been comfortable killing off popular products for the sake of an easy-to-understand product line. For all these reasons, the iPad mini isn’t about competing directly with the Kindle Fire or Nexus 7 – it’s about quietly killing off the albatross of the iOS family – the iPod touch.

This time next year, the iPod nano will have a camera and the iPod touch won’t exist.

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Rejected on Grounds of Perceived Uselesness

“Yes, that’s right, we were rejected on the grounds that unVerse is “not very useful”. Hmm. Strangely, an app that plays a sound of an airplane appears to have more use than our generative music system. Anyway.” – Yann Seznec

From an essay I wrote in 1999:

“Generative music allows the musician to compose like an urban planner, designating themes and setting limitations, making the broad strokes.”

I think it would have more truthful for Apple to reject it on grounds unVerse competed with the iTunes Music Store.

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Apple is no longer a premium brand

For decades, Apple was perceived a premium brand with premium products. Products that just worked – with price tags fanatics aspired to. Ironically, Apple’s most successful products – the iPhone and iPad – have completely removed the brand cache.

At a glance – I can tell if a laptop is the latest MacBook Air. There’s still some value – if only in status – of having a the latest Apple laptop. Over the years Apple’s product designers have done a fantastic job of differentiating each generation from the next. Switching up curves and edges, black with silver, sparse with sparser. With each change, wallets were joyfully opened.

Unfortunately, all the iOS products look nearly identical. So nearly exactly alike that the significant only difference between the new and the old iPad is weight and thickness. Apple as status symbol is gone.

If a $117 iPhone 4 from WalMart can be mistaken for a $399 iPhone 4S at a glance – there’s little reason social reason to pay an additional $300. Conversely, everyone will have a $117 iPhone 4.

All children are above average.

The existence Android only makes it worse. Android, like Microsoft Windows never was a premium product. Without a great deal of spit and polish – it will never be a premium product – no matter the sexy hardware around it.

This means there’s a significant void in the status symbol gadget market.

Today, I only see one thing likely to fill that void:

The absence of a gadgets.

We may have quickly reached the point we signal our status by our realtime dis-connection.

Additional point: Cricket offers pre-paid, unlimited iPhone for $55/mn

The Second Falling

“The screen’s gotten better, but when’s the last time you saw an iPhone app do something that made you go, ‘Whoa! I didn’t know that was possible!?'” – Alexis Madrigal

“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.” – George Colony, CEO, Forrester

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