How I’m using Apple Music

Related: Apple topic page, all Apple Music posts.

On the day Apple Music launched, I wrote a first-day “review” of sorts, based on my first few hours with the service. Now that several months have passed (and I’m about to cross over from the three-month free trial to being a paying customer), I thought I’d revisit my thoughts on the service, and talk through how I’m actually using it today.

I’m not listening to Beats 1

As I mentioned in the first day review, I didn’t feel like Beats 1 was for me, and nothing has really changed in that respect. The reality is that I haven’t regularly listened to normal linear radio since I was a teenager, when I used to listen to it as I got ready for my day in the morning. Over the last 15 years or so, I’ve essentially listened just to the music I want to, rather than allowing my listening to be driven by others. I’ve dabbled with Pandora from time to time, but with that and other services I’ve generally found that they take too much training to be useful, or simply don’t have a high enough percentage of music I like to be worth the time. Beats 1 falls into the latter category – my tastes in music continue to be too narrow/specific for what Beats 1 offers. Apparently, many others love it, but not me.

“For You” has become much more useful

The “For You” tab is the place where you’re supposed to find things that are relevant to you and your tastes. When I first started using Apple Music, I found this tab to be somewhat lacking – the playlists and albums recommended either felt random or too literally connected to albums I already owned or tastes I’d explicitly specified. The recommendations were either things I already knew I liked, or they were too out there. But since that time, the recommendations seem to have got better, as I’ve tried quite a few of the playlists out, and I’m liking more of what’s recommended.

“Add to my music” is the key

To my mind, the most important feature of Apple Music is the “Add to my music” button (often just a little plus sign, and where that isn’t present, as a menu item behind the three little dots). As someone who still listens to a lot of the music I own, I like the idea of adding to that library far better than having to recreate my library from scratch, or simply search every time I want to listen to something. As such, the Add to my music option in Apple Music is a perfect fit.

However, I’m not just using it as a “permanently add this to my collection of music” button, but rather as a way to quickly bookmark something for later listening. For example, when I browse through that For You tab, and a playlist or album looks interesting and worth checking out, I add it to my music, even though I haven’t listened to it yet and might not get to it for a while. But everything I add in this way shows up in the Recently Added section on all my various devices, and as such the next time I’m listening to music it’ll be right there. If I like it, then it stays in my library, but if I don’t, it’s simple to remove it again. My music library has grown quite a bit this way over the past few months, and especially as the For You recommendations have been getting better.

Playlists are useful in several ways

I find playlists very useful, and they’re a key part of how I’m using Apple Music. But I’m using them in a few different ways. First off, Apple Music suggests various playlists in For You, some of which look interesting enough to add. In some cases, the playlist itself is good enough that I just keep that in my library as something to listen to again. But in other cases, I only like one or a handful of songs in the playlist, and in that case I typically click through on the song or artist and start playing more of their songs and albums, often adding those to my library while deleting the original playlist. I might also check what other playlists those songs or those artists are part of, and add those to my library. This is often a good way to find similar music and/or artists, as is the Related Artists section.

The other thing I’m really enjoying is the “Intro to…” playlists Apple Music has for many artists. These are almost like a new take on the Greatest Hits albums many artists throw out after they’ve produced enough albums, but they’re not quite that straightforward – they often combine well-known songs with other more obscure ones. And then there’s often the option of a second, “Deep Cuts” playlist for the artist if you want to go deeper. Using these playlists, I’ve rediscovered (rather than discovered for the first time) artists from my past and especially my childhood, and in the process introduced a number of them to my kids too.

Things I wish were better

Although I’m using Apple Music a lot, there are still things I wish were better. For one, I wish the Music app on my iPhone would give me more information about artists and albums than it does, more in line with the desktop version of iTunes. I typically use the desktop version to discover new music and add it to my collection, but I do a lot of my listening on my phone. Sometimes I want to learn more about an album or an artist, and it’s either unintuitive how to get that information to display in the app, or impossible to get it to display at all. I quite like the artist descriptions and album reviews Apple has always provided in iTunes and now in Apple Music, but these can be hard to get to or missing entirely in the mobile app. (Artist descriptions are available if you click on artist names enough times, even though there’s no visual indicator that this will happen, while album descriptions are totally missing as far as I can tell.)

My other main complaint is that Apple Music doesn’t seem to deal with caching and streaming all that well, especially on weaker cellular connections. Sometimes, when I’m in the car, if I skip too quickly through songs in a playlist or album that I haven’t downloaded to my phone, things just seem to get stuck – the song is ostensibly playing, with the progress indicator and time still moving, but no audio is heard. I imagine this is just a bug, but for a service which now majors on streaming, it needs to be fixed.

Apple Music probably isn’t for everyone

As I mentioned in that first-day review, Apple Music is a great fit for me – the combination of my own library and new music I discover through the service is just what I’ve always wanted from a subscription music service. But the more I talk to people in real life and online through Twitter and Facebook and so on, the more I realize it’s not a great fit for everyone. Obviously, there’s a substantial number of people who simply don’t listen to that much music, who aren’t a good fit for any music service. But I’m talking about people who do care about music. Unless you care a great deal about mixing your library and new music, there’s not a huge amount in Apple Music to convince you to switch from another service. In fact, if you’ve made a heavy investment of time in another service, switching can seem daunting – Apple Music doesn’t offer a way to import playlists from Spotify, for example, which could dramatically smooth the way for switchers. But there also aren’t that many unique features that would draw you over from another service. And unless you’re buying one or more albums a month at the moment, there may not be that strong a reason to start paying for a subscription music service either. Beats 1 – one of the most unique aspects of Apple Music – is free to anyone, and many of the other features are relatively undifferentiated from other services.

Apple at this point has two fundamental problems with Apple Music – relatively few people have even tried the service (something I wrote about here for Techpinions Insiders), and of those who have, there’s anecdotal and survey evidence that many are turning off the auto-renewal and allowing their subscriptions to lapse before they become paying customers. So far, I’m not seeing a great deal of action from Apple that would meaningfully change either of these things, for all the value I’m getting out of the service personally.

iPhone 6S Plus Review

All the major publications which were given review units of the new iPhones ahead of the launch came out last week. I got my review unit last Friday (along with many Apple customers), but since I’ve now been able to spend a few days with it, I wanted to share a few thoughts. I’m going to try very hard not to rehash everything everyone else has said, and also to add a bit more insight in areas I haven’t seen others write about yet. I’m also going to spend a bit more time on the cameras than most of the other reviews – I’m not the world’s greatest photographer, but I do enjoy taking pictures and my phone is by far the camera I use the most to take pictures of my kids, so it has to be good. As such, I’ve spent a good chunk of time over the last few days taking pictures and videos of various things to test the camera specifically and I’ll share some examples below.

The Hardware

The new devices are nominally virtually unchanged on the outside from the previous versions, and that’s certainly the first impression they give too. They are a hair thicker and a tiny bit heavier than their predecessors, but if I hadn’t known that I might well not have noticed. Along with the iPhone 6 Plus I’m using, Apple also sent one of its new leather cases (I have the saddle brown one) and I’ve been using that for the last few days, which has made comparisons between this phone and the iPhone 6 Plus less relevant.

As with previous iPhones, the hardware feels very solid, well balanced, and high quality. Nothing’s changed there. The aluminum and glass are both supposed to be more durable than last year’s, but I can’t think of a way to test either of those that doesn’t involve trying to break the phone, so I haven’t tested either.

The new vibration engine (apparently now one and the same as the taptic engine) is very nice, too – I don’t use vibrating alerts much anymore since I started wearing the Apple Watch, but on the odd occasions when I still get them (mostly for phone calls), they’re more substantial than they used to be. It’s hard to know for sure, but I feel like the phone speaker has got better too – calls sound clearer and louder than before.

3D Touch

3D Touch is arguably the headline feature on the new iPhones, and from the moment I got to use it in person at Apple’s September event I’ve said I thought it was going to be important.

Having now used it for more than just a few minutes in a tightly-controlled demo environment, I have a few additional thoughts:

  • This is a big deal, but for now it’s mostly used by Apple’s own apps and just a handful of third-party apps. That has two implications. One, if you tend to use third-party replacements for key things like Mail, Calendar, and so on, you’ll find 3D Touch a lot less useful, at least for now. Two, that may mean you migrate back to Apple’s own apps in some cases, to make use of this feature. I’m curious to see how quickly most third-party app-makers add support – if I were them, I’d do it quickly, especially the Quick Actions functionality. I suspect this will be like the Apple Watch, in that apps that fail to support it will find users replacing them with ones that do.
  • Especially on the 6S Plus, which is the one I’m testing, 3D Touch makes apps on the top half of your home screen less useful than those on the bottom. Yes, you can use the Reachability feature to bring those higher-up apps within easier reach of your thumb, but that adds friction in the use of a feature that’s all about reducing friction. I haven’t done this yet, but I can see myself rearranging the icons on my main home screen based on which I’m likely to use Quick Actions with.
  • Speaking of which, I’ve always kept the Camera app in the top right of my first home screen, because I do want access to it when the phone is unlocked, but I most often trigger it when the phone is unlocked, and therefore use the camera button on the lower right of the lock screen. However, the introduction of 3D Touch and the much-faster Touch ID sensor (on which more below) means I rarely see the lock screen anymore, and even when I do using that lock-screen camera button is less flexible than the app icon for the camera on the home screen. I wish I could use 3D Touch in some way on the lock screen – that’s something Austin Mann predicted Apple would do, but it didn’t. I suspect that’s because the lock screen is becoming less relevant, but it also means I likely need to put my Camera app icon somewhere closer to the bottom of the screen, and maybe even on my home row.
  • For now, I’ve been using 3D Touch more in apps than on the home screen, and that’s partly because I tend to use third-party apps more than Apple’s own. I‘ve used it most in Instagram and the Photos app, where I’m using it both to view Live Photos and to quickly review recently-taken pictures when I’m still in camera mode. The latter is a really great addition, and I think third party developers will likely come up with lots of cool ideas for using this feature.
  • One thing I think developers should be thinking about is making Quick Actions user-customizable. Instagram, for example, chose to make access to the Direct inbox, Search, and View Activity the three additional Quick Actions beyond the obvious New Post option. If I had my way, I’d probably choose other aspects of the app to get quick access to, and I’m betting I’m not alone in that. Launch Center Pro does a great job of this as a key feature, and I think it’s brilliant (h/t @rjonesy).
  • Related to this, the order in which functions appear in Quick Actions is interesting too – I think we’re accustomed to reading menu-type lists (along with everything else we read) from top to bottom, but depending on where an app sits on your home screen, the menu items may appear in what seems to be reverse order (I think the rule of thumb is that the thing you’re most likely to want to use is closest to the app icon itself, for easy thumb access, but that may mean it’s at the bottom of the list). That means something of a learning curve for users, but is probably also something developers should think about in designing the order of items (and any icons they use alongside the labels).
  • Lastly, I’ve noticed some of the negative side effects of the introduction of 3D Touch. One of the things that’s happened to me several times is tapping on web links without any result. I think what’s happening is that I’m tapping just hard enough to trigger 3D Touch, but not holding it at all, which leaves me in a sort of limbo where I don’t get either the desired result or any visual signal that I’ve accidentally activated 3D Touch either. John Gruber has talked about the problem of trying to delete apps, a function I suspect we’ve all kind of activated by pressing down fairly hard on the screen to trigger the wobbling icons. I’ve had this problem too, and there are several other places where I’ve previously pressed fairly hard for the “long press” but now have to get used to pressing only gently. No doubt the mental and physical adjustments involved will come in time.

Touch ID

I won’t spend lots of time on this, as it’s been well-covered elsewhere, but the Touch ID sensor is dramatically faster now, and frequently completes authentication before the lock screen even pops up fully. That’s wonderful for quick access to functionality, but as others have pointed out (and as I alluded to in the context of the camera above) it does mean the lock screen becomes a lot less useful, unless you trigger the home button with a finger not registered for Touch ID, or use the side button to turn on the phone. Training the Touch ID sensor is also much quicker now – not something you have to do a lot, but I’ve added several fingers to the new phone more or less immediately, whereas it took me a long time to bother doing so on the iPhone 6 Plus because it took more time to do.

Live Photos

My initial reaction to the Live Photos demo was that this reminded me of something out of Harry Potter (it may have helped that my daughter has recently been reading the books and seeing the films for the first time).

Again, I got a brief demo of the feature at the September event, but it’s very different to be working with your own limited skills as a photographer rather than with carefully chosen images pre-installed on a demo phone. I’m glad I read some of the reviews last week ahead of trying to use it, because it meant I was immediately aware that I needed to change my past behavior slightly and hold the phone steady both before and after taking the still image (though the software on the phone now knows to cut off the video if the phone is lowered prematurely). That probably shortened the learning curve somewhat, but it’s still an interesting process to figure out how best to use Live Photos. Apple’s demo photos were an interesting mix of moving objects and people, and I’ve definitely had more luck with the latter than the former in terms of getting compelling Live Photos out of the process.

Below are some examples of Live Photos from the last few days – they’re a mix of objects and people/animals, and you’ll see how variable the results can be. For what it’s worth, sharing these anywhere other than in iOS is still difficult – I connected my phone to my Mac and used QuickTime to record the screen of my iPhone as I used 3D Touch to interact with them, which resulted in this series of 7-second videos you see below. In each case, the video starts with the still image, then shifts to the video, and returns to the still (you may hear background noise from my home office on the audio on some of them – no idea why QuickTime records microphone noise when capturing the iPhone screen).

Overall, I’m really enjoying Live Photos, and there are some interesting things to note:

  • Even when in Live Photo mode, you can capture multiple pictures in quick succession – at first, I was waiting for the yellow Live indicator to disappear before taking the next picture, but I found that it works just fine even when the pictures are taken close together. The video still attaches itself to each picture in the same way, which means you get an interesting effect when scrolling through pictures quickly and playing the Live Photo – you’ll hear almost the same background noise on each, with the beginning and end shifting a fraction of a second each time. This is very clever stuff on Apple’s part.
  • I kind of wish Apple had made these Live Photos auto-play as you scroll through your camera roll (or gave users the option of selecting this) – it would make your camera roll come alive in a completely different way, whereas for now your camera roll looks entirely static until you decide to engage with an individual picture. Maybe it’s the Harry Potter thing again, but I like the idea of these pictures looking alive from the get-go, rather than having to be prodded into action. I’m sure the team at Apple responsible for the feature spent at least some time discussing this decision, and ultimately came down on the side of having them be still by default – perhaps because scrolling through moving photos was too distracting visually, perhaps because of the impact on battery life, or for some other reason. Perhaps it’ll change in time or become a user option.
  • Related to this, the blurry transition between the still and the video isn’t my favorite element here. I can see why the engineers thought it needed a clear visual transition from one mode to the other, but when you’re reviewing a bunch of pictures it’s an unnecessary visual obstacle and delay that adds little once you’re used to how the feature works. At the very least, it feels like it should be quicker.

The Camera

The cameras have always been one of my favorite features of the iPhone, and I continue to find the cameras on the iPhone better than any other smartphone camera out there, at least for general use. The new cameras offer improvements over last year’s, which were already very good (see my review from last year here and this Flickr set for lots of pictures from last year’s phones).

My wife and I went to pick up my kids from her parents’ farm on Saturday, and I had a chance to take some pictures and video while we were there. We then went on a drive up the canyon near our home on Sunday afternoon, and I went on a brief hike with my son this morning too, so I’ve taken pictures and video in a few different settings over the last few days. Overall, I’ve been very impressed by the camera, both for photos and videos.

Below is a panorama I took this morning – it won’t look all that impressive below, because I’ve reduced it to fit here, but if you click on it, it’ll open the full-size image in a new tab or window.

Panorama-downsizedThe full image is over 13,000 by 3,600 pixels, and I think it looks fantastic (not my composition, but the various different levels of light and shade and how they’ve come out so well, while retaining a lot of detail). This is one of the huge strengths of the new cameras – the combination of high resolution and retention of detail, which will allow for much more usable cropping of pictures.

The two images below are a virtually complete crop and a partial crop of the same picture, both of which I’ve edited using Snapseed. I’m including them because of the detail that remains in the cropped version.

Landscape full crop reduced

Landscape crop reduced

I’ve amped up the color in these pics a little, but I’ve included some other unedited shots below so you can get a sense of how these come out of the camera. In both cases, you can click on the picture and it’ll show full-size. For more photos, mostly unedited, see this Flickr set.

As for video, the iPhone continues to have a great slo-mo camera, but of course it now also has 4K video. I haven’t spent a ton of time using this, but one of the most striking things with video on the iPhone 6S Plus is how good the image stabilization is getting. I’m including below a few YouTube embeds which show off this capability – apologies for the slightly dizzying cinematography on some of the videos, but I was trying to test the camera’s ability to adjust to changes in lighting.

4K video – pan across mountain landscape:

This one was shot by one of my kids out the car window while driving on a bumpy, windy road through the canyon – it’s 1080p only:

This is another 1080 rather than 4K video, but it shows off the image stabilization quite well, as well as the quality of the video capture:


Other than the specific features I’ve reviewed, the one overarching theme with the new iPhone is speed. Touch ID is faster, as I’ve already mentioned, but everything else is noticeably faster too, as a result of the new chip, more RAM, and a variety of other improvements. There’s almost no lag now for a number of tasks which used to take time. And the overwhelming impression you’re left with is that you and your clumsy fingers are now the biggest source of latency for a lot of what you’re doing. I find myself more drawn to Siri and to voice dictation for text entry than before, simply because it now feels like I’m slowing everything down when I type things in.

All part of the pattern

In conclusion, the iPhone 6S range feels like a continuation of the pattern for Apple. In a piece I wrote on Techpinions a while back, I talked about the fact that Apple often builds new features and functionality incrementally over time, and it’s often not clear where a particular feature is heading until several years after its original launch. The iPhone 6Ss feature examples of both the outgrowth of earlier features (e.g. Force Touch on the Watch maturing into 3D Touch on the phone, the Touch ID sensor getting enormously faster), but also likely the beginning of new things that aren’t yet apparent. 3D Touch in particular feels like it’s just getting started, and could spread both to other parts of Apple’s product line and to other parts of iOS (count how many of Apple’s own apps don’t yet support it, for starters). But I’m sure there’s far more here, too, though it will probably only become clear as Apple launches future devices.

iOS 9 adoption and Mixpanel

Related: Apple Topic Page, and a previous post on iOS and Android adoption patterns, as well as two earlier posts (1, 2) on Android versions in use.

Last week, following the release of iOS 9 by Apple, Mixpanel (along with other analytics firms) began releasing data relating to the pace of adoption of iOS 9. That data suggested that iOS 9 was being adopted more rapidly than iOS 8, and also that it had reached around 30% by the end of the day on Saturday. Then, this morning, Apple issued a press release about the new iPhones, but in passing noted that iOS 9 was now on more than 50% of devices, based on data from Saturday, September 19th. That’s a fairly sizable discrepancy, and it made me want to dig into the numbers to understand what was going  on.

Note: I’ve reached out to both Mixpanel and Apple about this, and I will update this post as warranted once I hear back from them. As of right now, the analysis below doesn’t include any additional information from them beyond what they’ve put out publicly.

A word on methodologies

It’s worth starting with a quick statement of methodologies. Apple’s goal is to give developers a sense of the operating system versions their target audience is using, and so is based on devices hitting the iOS App Store (Google, incidentally, does the same thing). It generally seems to pick a specific single day, usually a Monday, and measures which versions of iOS those devices hitting the App Store are using.

Mixpanel, on the other hand, provides analytics to app developers to help them understand engagement around their apps, but in the process also collects lots of data on which operating systems the users of those apps are running. As with any analytics software of this kind, the picture will always be incomplete, but the bigger the base of devices, the more likely it is to be representative, and Mixpanel’s is fairly big at this point.

Mixpanel is generally very close from October to August

With that note on methodologies as context, the first thing to note is that Mixpanel is generally very good at approximating Apple’s own numbers for iOS adoption, even though their methodologies are different. For the period from October 2014 to August 2015, Mixpanel’s numbers generally tracked within about 4% of Apple’s own numbers for iOS 7 and iOS 8 adoption. Interestingly, Mixpanel tends to estimate higher usage for the latest version and lower usage for previous versions than Apple.

September seems to be more of a problem

However, even though Mixpanel’s data tracks closely to Apple’s for most of the year, it tends to be quite a bit off the mark in September, immediately after the release of new iOS versions, at least for the last two years. The chart below shows the difference between Apple and Mixpanel’s adoption rates for iOS 7, 8, and 9. Negative numbers mean that Mixpanel’s rate is lower than Apple’s, while positive percentages mean Mixpanel’s numbers are higher.Mixpanel and Apple iOS adoption rate differencesThe chart shows several things that are worth noting:

  • As I mentioned, the margin of “error” (I’ll explain the quote marks later) is generally under 5%, though as you can see it grows steadily from late October 2014 to September 2015
  • However, the discrepancy between the two figures is much more significant for two dates – September 21, 2014, and September 19, 2015 – which happen to be the dates immediately after the launches of the new versions for the last two years. In both cases, Mixpanel’s adoption rate for the new version of iOS was far lower than Apple’s, in contrast to the usual pattern during the year.
  • The discrepancy quickly shrank last year – by early October the two numbers were very close again. We don’t know yet what will happen this year, of course.

What explains the September discrepancy?

I’ve carefully avoided describing Mixpanel’s data as faulty above – I did use the term margin of error once, but carefully put “error” in quotation marks. And that’s because even Apple’s own numbers aren’t necessarily accurate in reflecting the devices actually in use. For the sake of developers, knowing what mix of devices hit the App Store is of course actually more important and relevant than knowing the total mix of devices out there. But it’s not necessarily an accurate picture of what people are using across the broad base of devices. Mixpanel’s data may actually be more representative of the actual base of devices in use, but there’s no way to know for sure; ultimately, it is also measuring something other than true adoption rates across the base.

So, having framed this as a discrepancy or difference rather than an error, what explains why the numbers are so close from October to August, and yet so far apart immediately after a new iOS version launches? Here are a few possibilities:

  • Apple’s numbers, which reflect App Store visits, are unduly skewed early on by the influx of recent updaters looking for apps that take advantage of new features – e.g. content blockers, multitasking, and in-app search in iOS 9. Once the initial rush has subsided, App Store visitors return to looking more like the overall base. Since we don’t have detailed day-by-day data from Apple, it’s hard to tell how quickly this effect wears off, but I suspect it may be a big part of the answer.
  • It’s possible that Apple’s numbers, which are global in nature, are more representative of true trends than Mixpanel’s, which may skew towards (or away from) particular countries. As a result, if users in China or other major markets which Mixpanel may not track as closely update iOS more quickly, Apple’s numbers might capture that whereas Mixpanel’s wouldn’t. As download rates catch up in other regions, the discrepancy would work its way through over time. I don’t know enough about Mixpanel’s data to know how much of an issue this is, but it might be a secondary factor.
  • Apple’s regular iOS adoption data is usually captured on a Monday, whereas its post-launch data for the last two years was captured at the weekend (a Sunday last year, and a Saturday this year). It’s possible that the mix of devices in use – and especially those hitting the App Store – on the weekend is different from those in use on a Monday, but this is unlikely to account for much of the discrepancy, especially since the Mixpanel data was collected on the same day.

Another thing that’s worth noting is that other sources of iOS adoption data tend to agree more with Mixpanel at this point than with Apple’s numbers – both Fiksu and David Smith’s Audiobook app data tend to suggest adoption closer to Mixpanel’s than Apple’s, for example. So, either all these methods suffer from the same “problem” or Apple’s data is actually unrepresentative of the true base of devices out there, especially in these first few weeks. Until I hear more from either company, it’s going to be hard to know which is the case. But it’s certainly worth viewing Mixpanel’s data (and any other third-party data) in this context in the future, especially when it comes to the period immediately after a new version of iOS comes out.

Further thoughts on Apple’s iPhone Upgrade Program

Related: Apple topic page

I wrote a piece Thursday on Techpinions about Apple’s iPhone Upgrade Program which proved quite popular, hitting Techmeme and being retweeted by some of the bigger names on Twitter, and so I thought I’d do a quick follow-up post with some additional thoughts on the subject, in part based on my additional research and in part based on things that were too detailed to go in that original post.

The impact on carrier revenues

One thing I didn’t really go into in my Techpinions piece was the impact all this could have on carrier revenues. The context here is a bit complex, but I’ll try to keep things simple: in the old days, the carrier charged you the same for service whether or not it was subsidizing a device for you (and no matter how big the subsidy was). Under the new equipment installment and leasing plans, the service fees are substantially lower than they were, but the carrier makes up the difference from your monthly device payment. For example, under the old model for a two year iPhone contract, the carrier charged you around $200 up front and $70 per month in service fees, but under a two-year equipment installment plan it now charges you nothing up front, $50 per month in service fees, and $27 a month in device payments. Its total revenue over the two year period is pretty similar, but of course only if you’re still getting your device through them. The other thing is that certain spending has now moved from the service revenue bucket to the equipment revenue bucket, and as such a long-standing carrier metric – ARPU (average revenue per user) – has become less relevant, because it’s based only on service revenue and doesn’t include those installment payments. As a result, carriers have begun reporting another metric, ABPU (average billings per user), which does capture these device payments. You can see an illustrative example of what’s been happening to these two payments for AT&T over the past few quarters below:AT&T ARPUWhat you see with AT&T is that ARPU has fallen pretty steeply over the past couple of years as the shift to installment billing has kicked in, but ABPU is now back where it was two years ago, and rising nicely. The same pattern applies for the other carriers, which are all at slightly different stages in this transition. However, for customers who buy their phones through Apple rather than the carrier, ABPU drops right back down to being the same as ARPU, because there are no device payments. If this happens in large numbers, it will have a significant impact on carrier revenues. The good news is that this will be profit neutral, since the revenue is basically just pass-through revenue anyway and all goes on equipment costs, and as such should actually boost reported margins, but revenues will be hit hard. Interestingly, T-Mobile’s “adjusted EBITDA” metric is already based just on service revenues, so it would be unaffected by this shift.

Competition shifts to iPhone pricing

One of the interesting things we’ve already seen over the last couple of months is a new dimension to the competition between US wireless carriers, especially the two smallest among the big four, Sprint and T-Mobile. Whereas the wireless carriers have in the past only competed on wireless service pricing, and charged virtually identical prices for devices, they’re now falling over themselves to offer the best deal on devices. More precisely, on iPhones specifically. With Apple’s entry to the iPhone financing business, we’re likely to see this competition increase – indeed, T-Mobile announced after Apple’s announcement a more aggressive plan of its own.

What’s fascinating about this is that it comes such a short time after the carriers finally began to abandon the “subsidy” model for phones. In reality, of course, this wasn’t a true subsidy, but merely an obfuscation of the true cost of the device, and a recouping of that true cost through inflated service fees. However, now that they’ve finally abandoned those “subsidies”, the irony is that they’re about to embark on truly subsidizing these devices – the new leasing plans some of the carriers are beginning to offer are going to make it extremely tough to break even on the hardware purchase itself.

Changes in the secondary market

We all know that the secondary market in smartphones (and, once again, in iPhones specifically) has been booming in recent years. Gazelle and others have been buying these devices to sell on in various ways for some time now, but the carriers got in on the act a while back, and Apple has been increasingly getting involved itself. All these players have incentives to recapture devices which can be sold at significantly lower prices even than the older devices Apple keeps in market as new phones, because this expands the addressable market for iPhones without risking general price deflation. The prepaid market in the US is one obvious destination, since the absence of both subsidies and installment plans there means customers pay full price for devices. But there’s always been the risk that the secondary market eventually saturates. There’s an inevitable ceiling in the secondary market – I don’t know how far away it is, but I’m sure all the carriers and Apple are already thinking about this.

However, with increasing numbers of spectrum bands in US devices, these iPhones are potentially sold in other markets too. AT&T is specifically looking at its Mexican wireless operations as a possible destination (something reported in the press and repeated to me by AT&T Mobility CEO Glenn Lurie on Thursday). But Apple, too, could readily repurpose many of the devices it gets back secondhand in the US for other markets, allowing it to address price points it hasn’t been able to so far.

Apple is serious about this business

Lest anyone think Apple is merely dabbling or testing the waters here, it’s clear that it’s actually quite serious about it. It’s bought the top spot in Google’s ad rankings for searches including the obvious one – iPhone Upgrade Program – but also “iPhone upgrade” and “iPhone installment plan”. There may well be others, too – I haven’t had time to check. Apple isn’t just going to wait for people to discover its new plan accidentally – it’s actively out there promoting it in the very places where customers would normally only have found carriers’ service plans or generic Apple pages about the iPhone. The carriers are shrugging all this off – I asked Glenn Lurie about it in a meeting on Thursday and he was blasé about it, while John Legere also nominally welcomed it while somehow seeking to suggest it was simultaneously a real risk for AT&T. But I continue to believe that this may be a far greater risk for the carriers, for all the reasons I outline in this piece and the reasons I gave in my original piece. And I haven’t even begun to talk about where Apple might go next with all this.

Apple’s Playbook

One of the most interesting slides at yesterday’s Apple event was one that Tim Cook used in the context of introducing the new Apple TV:Apple PlaybookWhat I found striking about this slide was that it was a great summation of Apple’s playbook for its tightly integrated approach to hardware and software:

  • Powerful Hardware
  • Modern OS
  • New User Experience
  • Developer Tools
  • App Store.

This playbook was first introduced with the iPhone, although arguably it wasn’t fully fleshed out until 2008, when the developer tools and App Store elements arrived. This approach was then applied again both to the iPod Touch when that launched, and when the iPad launched in early 2010, using the same “modern OS” – now called iOS. Later in 2010, Apple began applying some of these elements back to the Mac (announcing these changes at an event called “Back to the Mac”), starting with the Mac App Store, and continuing since then with a variety of elements borrowed from iOS.

With this as background, it’s no surprise that Apple felt bound to include an App Store in the first version of the Apple Watch, but out of an abundance of caution and a sense of urgency, it was a diluted version of the App Store concept. Only with the launch of WatchOS 2 this month will Apple fully embrace its own playbook for devices when it comes to the Apple Watch. And as of yesterday, we now know that Apple is applying this same playbook to the Apple TV too, something that’s seemed inevitable for quite some time now.

With the release of WatchOS and the announcement of the new Apple TV, Apple now has the same strategy for hardware and operating systems for every element of its portfolio for the first time. The question now becomes which new categories Apple might apply this strategy to in future, and one obvious possibility is cars. Look at that list of bullet points that make up the Apple playbook – is there any element of this that doesn’t apply to cars?

The other thing that’s interesting about all this is that this strategy puts developers at the heart of Apple’s formula for success. Three of the bullet points are about what Apple brings to the table for end users – the hardware, the software, and the user experience these two elements tightly integrated create. The fourth and fifth bullet points are about what Apple provides for developers – the tools to create the apps, and the channel to get these apps in front of customers and make money from them. I think this is a reflection of a genuine understanding on Apple’s part that its devices would be far less meaningful without these third party apps.

Given what’s happening now with Apple Watch and Apple TV, I’m expecting to see a ton of innovation from developers in creating new experiences that are hard to imagine today. We’re about to see the same sort of flourishing of new apps and business models around these devices that we’ve already seen around the iPhone and iPad. And that in turn will reinforce the value of these devices for end users, while creating significant new revenue opportunities for developers.

Apple September 2015 event quick take

Note: I’m cross-posting this piece from the Jackdaw Research website, where it went out earlier today as a media comment on Apple’s event. I should have more in-depth analysis on the event here and on Techpinions in the next few days. My preview piece from Tuesday is here.

Apple’s September event always sets the tone for its entire year – new iPhones are announced, and the iPhone makes up the majority of Apple’s revenue and profits, and the performance of the iPhone business largely determines overall growth rates, at least for now. But today’s event, like last year’s, added another new product category that should drive significant new revenue for Apple and for developers, and arguably the new Apple TV was one of the biggest and most important things announced today.


The new iPhones have enough new features to make them an interesting upgrade for those who always have to have the latest device from Apple, with 3D Touch the biggest new feature. The name of Force Touch badly needed to change, since it always sounded a little like a form of assault. I’m no convinced 3D Touch is the right name, but it conveys the concept reasonably well, in that the functionality is about a more layered interaction. 3D Touch itself should make navigation and interaction much quicker and easier, but it will mean something of a learning curve for users, because there won’t be any visual cues indicating what a 3D Touch might do, a problem the Apple Watch suffers from as well. For anyone with a two-year old iPhone, which includes the vast majority of iPhone users who will upgrade in the next year, this will be a significant upgrade. For all the concerns about a down year for iPhones, I believe Apple will have another year of year on year growth, though likely significantly slower year on year than in the iPhone 6 cycle.

I’ve been saying since early last year that Apple should launch its own device installment plan for iPhones, and now it’s launching one, with the iPhone Upgrade Program. This is a huge opportunity for Apple to take control of the customer relationship away from the carriers, and that in turn is a big risk factor for carriers, which will now cede some of that relationship to Apple. Arguably, only Apple has the infrastructure in place to offer this kind of plan to customers, so this will also be a further differentiator against competitors.

Apple TV

The Apple TV has been described as a hobby at Apple for too long, and today the transition to a product worthy to sit alongside Apple’s other products begins. The new SDK will create a huge new opportunity for both existing and new developers, both in gaming and content, and in the process it’ll make the device more compelling for end users too. But what will really change the Apple TV is the launch of the Apple TV service a few months from now, because only then will the Apple TV be capable of becoming the only device you need to plug into your TV. In the meantime, Apple is going to bring casual gaming and a much broader range of apps to the platform, and especially for cord cutters, the Apple TV might well become the only device they need.

One interesting wrinkle is that Apple is giving developers less than two months to create apps for the Apple TV, which is by far the shortest time it’s ever given developers for a completely new SDK. The iPad, which leveraged what had been known as iPhone OS, gave developers 66 days, while the original iPhone gave them 127 days and the Apple Watch debuted 157 days after the SDK was released. That doesn’t give developers a lot of time, but it likely reflects the shared elements in tvOS compared with iOS on iPhones and iPads.

Apple Watch

Though a minor announcement at the event this week, Apple Watch OS 2 is going to be enormously important for the Apple Watch and for Apple. An Apple Watch running OS 2 is best thought of as the version of the Watch Apple would have wanted to launch right off the bat, if it could have. The first version of the Watch software was good, but the reality is that the apps are sorely lacking, in large part because of the heavy dependence on the iPhone for functionality. With Watch OS 2, that all changes, and apps should be snappier, more functional, and far more varied in their capabilities. I believe this new phase of its history will change the Watch as much as iPhone OS 2 changed the iPhone, and make it a much more compelling device, while creating big new opportunities for developers. The new watch and band options should also help diversify the appeal of the Apple Watch in both the premium and low-end segments, with both the Hermes watches and the new colors for the Sport option. This, coupled with the holiday season, should make for a really big calendar Q4 for Watch sales.


The iPad Pro has obvious similarities to Microsoft’s Surface, with its detachable keyboard and stylus. But the big difference is that the iPad is designed first and foremost as a standalone tablet, and the keyboard and stylus are optional extras. The Surface has always felt compromised as a pure tablet, because everything is geared around the use as a quasi-laptop. The Smart Keyboard and Pencil will add a lot of value for certain kinds of users, but the iPad Pro could easily be a replacement for a family PC for gaming or TV viewing. But with the keyboard, multi-tasking, and new apps and functionality from Microsoft and Adobe among others, it could also become a fairly compelling option in the enterprise. At a minimum of $1000 including the Keyboard and Pencil, the iPad won’t be all that price competitive against a basic PC, but with the new internals, it’s actually quite a powerful computer in its own right.

The key for the iPad is that Apple is now engaged in what you might call salami tactics here; in other words, Apple is seeking to add to the iPad opportunity incrementally with a number of smaller moves, and I see the iPad Pro in this context, along with Apple’s partnerships with IBM and Cisco. The iPad Pro by itself won’t dramatically change iPad sales, but should provide a good boost for sales, especially in conjunction with the advancements in multitasking and split-screen functionality in iOS 9. I’m still skeptical that iPad sales will start growing again over the longer term, but I think they might stabilize, and that will happen in large part due to increasing education and enterprise sales rather than renewed growth in the consumer market.

Apple September 2015 event preview

Related topic pages: Apple, and more narrowly the Apple and TV topic page.

I’m writing up a short Apple event preview here. Please note that this isn’t a list of predictions – that’s always seemed foolish to me so close in to an event, since so much is known already, and any real out-on-a-limb projections are easily proven wrong the following day. Rather, this is an analysis of the importance and impact of the things that are likely to be announced. I’ll follow up with a comment for press in the hour or so after the event – if you’re not yet on my media distribution list but would like to be, you can sign up here.

We also did something of a preview of the event on the Beyond Devices Podcast this past week, focusing especially on the Apple TV – I’m embedding the SoundCloud player below, and you can also find the episode on iTunes and Overcast, as usual.

New iPhones

One of the key mistakes a lot of people in the press and other commentators are making with regard to the new iPhones is having a single-year upgrade mentality. And because they make this mistake, many people are predicting a first down year for iPhone sales, but this view is misguided. As long as you look at each new iPhone in comparison solely to the iPhone that came the year before, you’re going to totally miss the point, which is that the vast majority of iPhone buyers are on a two-year upgrade cycle, and therefore the important comparison this year is to the 5S (and 5C) and not to the iPhone 6 and 6 Plus. I put together the table below a while back for a client, and I think it’s very relevant here – the key thing to look at is the final column, because this is the set of new features an owner of a two-year-old device will see when purchasing the new device. As you can see, even if you ignore Force Touch, which is highly likely but as yet unannounced, there’s plenty to recommend the new devices over the 5S, and if you bought a 5C two years ago, you need to add in several more features that weren’t in that device but were in the 5S, notably Touch ID.

iPhone 2 year upgrade cycles

Beyond the two-year upgrade cycle, everything else points to another big year for iPhone sales:

  • Switching from Android should continue at the same pace, especially since all the year’s major new Android devices are now out, so there’s no sense holding off on buying a new phone.
  • Upgrades from iPhones should be big again – the 5S cycle was bigger than the 5 cycle, which drove last year’s upgrades, so the starting point is much larger, and Tim Cook has made much on earnings calls of how little of Apple’s iPhone base has upgraded to the new phones yet.
  • The iPhone 6 Plus from last year will likely drop in price by $100, meaning that you can now get an extremely capable phablet for the same price as this year’s brand new phone (and the same price the Samsung Galaxy S6 and other leading Android devices launched at).
  • Installment plans and especially leasing options (many of which are iPhone-centric) from the US carriers are driving more frequent upgrades and purchases of higher-priced devices, which should further help iPhone sales. Sprint and T-Mobile in particular are driving iPhone sales hard at the moment, and I’d expect to see some bigger promotions from Verizon and AT&T around the new iPhone launch too.

Will the year-on-year growth rate be as high as this past year? No. But will it veer into negative territory? Absolutely not. Apple should sell more iPhones this year than they did last year, as they have every year in the past. Even those users that sometimes or always upgrade every year should see plenty to like in the new phones too, with Force Touch and other new features making the new phones a nice step up over last year’s ones.

Apple TV

I’ve written a lot about the Apple TV and Apple’s TV strategy in general over the past two years, so much so that last week I put together a new topic page on this site to summarize it all. That writing kicked off with a piece from January last year on how Apple could turn the Apple TV into more than a hobby, and I stand by what I said then, which is that the real transformation can’t happen until Apple launches a TV service (note that this was well before reports that Apple was working on such a thing surfaced). I still believe that’s the case, but I also believe that the announcements that will be made tomorrow will be extremely important for the Apple TV. Adding an open SDK and App Store will create significant new opportunities for third parties and for Apple around both gaming and content, something I wrote about on Techpinions last week. The potential for gaming in particular depends a great deal on the details of execution, most importantly the ease of porting apps from other flavors of iOS, and the controllers. But I think the new Apple TV will be huge. The biggest questions in my mind are how soon it will launch and therefore how much time developers will have to begin creating apps for it. Since it’s very likely to launch before Christmas (and probably in November), it’s likely to have the shortest announce-to-launch cycle of any entirely new Apple SDK, and that’s going to make this launch very interesting to watch.

Apple Watch

Though a minor announcement at the even this week, Apple Watch OS 2 is going to be enormously important for the Apple Watch and for Apple. I think an Apple Watch running OS 2 is best thought of as the version of the Watch Apple would have wanted to launch right off the bat, if it could have. The first version of the Watch software was good, but the reality is that the apps are sorely lacking, in large part because of the heavy dependence on the iPhone for functionality. With Watch OS 2, that all changes, and apps should be snappier, more functional, and far more varied in their capabilities. I believe this new phase of its history will change the Watch as much as iPhone OS 2 changed the iPhone, and make it a much more compelling device, while creating big new opportunities for developers. This, coupled with the holiday season, should make for a really big calendar Q4 for Watch sales. I’ve written about all this in more detail here.


It’s still unclear whether we’ll see new iPads at this September event, or whether they’ll be announced in October, but either way what I say here holds. The key for the iPad is that Apple is now engaged in what you might call salami tactics here (that’s a term that was coined back in the 1940s but which I first came across in this scene from the British comedy Yes, Prime Minister). That is, there are no huge boosts for iPad sales available to Apple, but rather a series of small steps it can take one by one, each of which will help iPad sales incrementally with the IBM and Cisco deals good additional examples. I first wrote about this idea here. I definitely see the iPad Pro (or whatever the larger iPad ends up being called) in this context – it won’t dramatically change iPad sales, but should add a little to the effort, especially in conjunction with the advancements in multitasking and split-screen functionality in iOS 9 (and potentially iOS 9.1), and the possibility of a stylus and Force Touch. I wrote a piece a while back about how iPad sales might eventually tick upwards due to upgrade cycles, but we’re coming to the end of the period when I thought that might happen, and I’m now skeptical that it will. Rather, I think they might stabilize, and that will happen in large part due to increasing education and enterprise sales rather than renewed growth in the consumer market.


Apple’s September event always sets the tone for its entire year – new iPhones are announced, and the iPhone makes up the majority of Apple’s revenue and profits, and the performance of the iPhone business largely determines overall growth rates, at least for now. So the new iPhones themselves are enormously important. But I’m actually far more interested in and excited by the Apple TV and Apple Watch OS 2, because they relate to unknowns in Apple’s business. iPhone upgrade and sales patterns are fairly predictable, but the Apple Watch is so early in its life, and the Apple TV is about to embark on such a significant transformation, that these moves are arguably more important in terms of their potential to move the needle on Apple’s future growth in unpredictable ways. On a personal level, too, I’m looking forward to a new iPhone, but I’m more excited by a new Apple TV, and by the new things my Apple Watch will do when running OS 2 and the new apps developers will create.