Google, Andromeda, Mythology and Hubris

Next week, Google is expected to unveil a new operating system named Andromeda, which in some ways combines the existing Android and ChromeOS operating systems. The choice of name is interesting – Andromeda is a figure in Greek mythology, and it’s worth briefly recapping her story. Specifics vary depending on the version of the story you consult, but here’s the gist: Andromeda was the daughter of Cepheus and Cassiopeia, king and queen of Aethiopia. Her mother boasted that she was more beautiful than the Nereids, who were the companions of Poseidon. As a punishment for Cassiopeia’s hubris, Poseidon sent a sea monster to ravage Aethiopia, and an oracle recommended to Andromeda’s parents that she be chained to a rock on the shore, where the sea monster would eventually claim her and be pacified. Fortunately for Andromeda, Perseus happened along and saved and subsequently married her. Below is one of many artistic representations of this story. gustave-moreau-perseus-and-andromeda Why do I bring this up? Well, given Andromeda is also the name of the hybrid OS due to be announced next week by Google, there are some interesting parallels. This past weekend Hiroshi Lockheimer, who owns Android and ChromeOS at Google, tweeted as follows:

Think back to September 2008, and how Android was received then. Although Google had certainly talked up the new operating system plenty, and some of the early coverage was pretty breathless too, the reality is that early Android was pretty disappointing. The hardware was clunky and ugly, and it took several years for Android smartphones to begin to approach parity with the iPhone, both in terms of performance and in terms of sales. Of course, over time Android smartphones became very competitive and eventually began to outsell iPhones significantly, but if you were to plot the trajectory, it would look something like the chart below. hubris-curve My worry with Lockheimer’s remarks is that, in September 2008, Android wasn’t obviously going to be the hit it has since become. In hindsight, the launch of Android was enormously important, and helped create today’s smartphone market, but at the time the G1 launched it was a clunky and marginal bit of hardware. The concern is that whatever Google announces next week will be received – at least initially – in the same way. Perhaps some will see in it the promise of amazing things to come, but I suspect the initial impact will be marginal, and it will take years to see the true impact. And it’s entirely possible that the impact won’t be nearly as impressive as Google clearly thinks it will be. Although Lockheimer is saying that we’ll look back on October 4th as being a milestone event, he’s saying it ahead of time, and that’s where the hubris comes in. Interestingly, the mythological Andromeda’s personal trajectory fits rather nicely onto that curve above too – her mother’s hubris has her flying high, only to be brought low by Poseidon’s wrath and her parents’ intended sacrifice of her, though eventually she’s rescued by Perseus and things start looking up again. Google’s Andromeda might well go through the same curve too – overhyped up front by company executives, only to fail to meet expectations in its early versions, though perhaps redeemed as the vision plays out over time.

Four Quick Thoughts on Snap’s Spectacles

Over the weekend, Snapchat (now Snap, Inc.) announced its video-recording glasses, Spectacles. In talking to reporters on Saturday and spending some time pondering the move, four main thoughts have been running through my brain. I think we’ll almost certainly spend a good amount of time on this week’s Beyond Devices Podcast discussing this, so look out for that episode on Thursday morning.

Two takes on hardware for immersive video

Firstly, it’s interesting to see Snap and Facebook both investing in more immersive video, while also making hardware investments in this space. However, they’ve chosen different focal points for their hardware:

  • Facebook is encouraging people to use their smartphones to capture 360° photo and video, but has chosen to make its hardware investment on the consumption side (Oculus)
  • Snapchat has made a hardware investment in a capture device for 115° video, but the consumption will happen on smartphones.

That reflects a broader strategic focus for each company, with Facebook focused not just on video but on owning the next big platform after missing out on owning smartphone hardware and operating systems, while Snapchat is redefining its identity (see below). Neither company, obviously, is precluded from eventually moving into the other hardware space over time either.

Snap Inc, the camera company

While speaking at a Columbia University startup event in April, Evan Spiegel first began referring to Snapchat as a camera company, and that was now obviously a setup for the Spectacles launch, which has been in the works for at least two and a half years, and Snap Inc has embraced this tagline as its official self-description now too. This redefinition makes sense – there have always been several ways to look at Snapchat: a content company, a social company, an app company, or a camera company. Of those, three still make sense as descriptors after the Spectacles announcement, but what Snap clearly doesn’t want to be seen as anymore is just an app company. But the camera identity makes in some ways the most sense – it’s the first thing users see when they open the app, and snapping and sharing pictures and video is clearly the central purpose of the company.

One of the things Snapchat has done amazingly well since its founding is evolving out of its original narrow pigeonhole into something much broader. Though known in its early years mostly for the ephemeral nature of the content shared through the platform, and thereby gaining a reputation as being somewhat shady, its identity is now very different. The additions of Stories, Discover, Lenses, and a variety of other features has turned it into something much broader, which consequently captures much more of its’ users time. Spectacles, though, are arguably the first addition to the portfolio that isn’t in and of itself about getting users to spend more time in the app, and that’s interesting.

Inevitable comparisons to Google Glass

You can’t launch a video-recording pair of glasses in today’s world without drawing comparisons with Google Glass. But the target demographic, the price point, the design, and the intent are all very different for Spectacles compared with Glass. In addition, the Snap team had the benefit of learning from what went wrong with Glass.

It’s also interesting to think about where the Spectacles technology came from – thanks to the Sony email hack, we know that Snapchat acquired Vergence Labs in March 2014 for around $15 million. Vergence sold video-recording eyeglasses under the Epiphany Eyewear brand, and actually launched before Google Glass. But there were some important differences between EE’s glasses and what Snap has now launched:

  • The price ranged from $300-500 based on storage, versus Spectacles at $130
  • The glasses required a USB connection to plug into a computer for uploading videos to a proprietary hub, from which content could be shared to various social networks, versus sharing over Bluetooth or WiFi direct to a phone running the Snapchat app
  • The glasses had a subtler design, with just one camera discreetly tucked in the corner, versus Spectacles’ yellow-rimmed cameras in both corners.

Interestingly, though, Vergence had this quote on its website when asked about the differences versus Google Glass: “Glass appears to have a few more “electronics features” and we have more “eyewear features”.” This is a great summary of the difference between Snap’s Spectacles and Glass too – the former is a pair of sunglasses that records video, while the latter was technology strapped to your face.   There’s definitely much less of a cyborg vibe to Spectacles. The Spectacles do own their role as cameras – those yellow rims are clearly intended to highlight the presence of the cameras, and lights will further highlight when you’re actually recording. Snap has obviously learned from the privacy concerns around Glass.

Why hardware?

The biggest question in mind throughout all this has been why Snapchat would undergo this transformation from an app company to an app plus hardware company, because that’s a tough transition to make. Consumer electronics involves industrial design, manufacturing, shipping and retail, break-fix capabilities, and much else besides, which an app company never needs to worry about. The business model is very different too – the incremental cost of serving an additional user with an app is close to zero, whereas the incremental cost of selling another unit of hardware is significant. Moreover, the vast majority of Snapchat’s end users have never paid it any money for anything in the past, and will now be asked to stump up $130. Given that for many of Snapchat’s users, their disposable income is probably best described as pocket money rather than a salary or even wages, that’s probably a tough sell.

Two obvious reasons present themselves: business model and differentiation. On the former front, Snapchat’s main business model has been advertising, so hardware revenue can provide a useful additional revenue stream while also hedging against any future challenges in driving ad revenue. But a proprietary camera also allows Snapchat to differentiate itself in much the same way its software Lenses already do. The Spectacles have a unique field of vision and video format, which in turn will be uniquely available in the Snapchat app, and that’s not to be underestimated.

Having said all that, we’re likely talking about a small production run here, which means the risks involved will be limited. If the product takes off, Snapchat can presumably churn out tens of thousands and make lots of money. If it doesn’t, it won’t hurt its financial performance too much (though the big bet on changing the name and identity of the company may look a little hubristic later if that’s the case). The big question is whether Snapchat can actually make money selling these glasses at $130 a pop, when Vergence Labs was selling their predecessors for more than twice that, and Snap’s version has two cameras and two wireless chips.

It’s also interesting to consider what else Vergence Labs was working on at the time of the acquisition – there were three future projects listed on the website at the time: smarter transition sunglasses, a HUD for heart-rate tracking during exercise, and an AR application. Those and others (especially given the dual cameras) are possible future directions for Snap’s glasses efforts too.

The Problem With a Twitter Acquisition

As I’ve said before, I’m both a heavy user of Twitter and a critic of the way it’s currently being run. The lack of growth and the slow pace of change to the product are closely intertwined, and neither is good for Twitter in the long run. (See here for all my past writing on Twitter.)

Because of the slow growth and diminishing expectations of Twitter’s eventual size as a business, the share price is tanking, and that’s raising the prospect of an acquisition (recently, of course, the very prospect of an acquisition has been fueling a rise in the stock price).

Recode had a nice piece a while back breaking down the potential acquirers and arguing for and against each of them, with Kara Swisher and Kurt Wagner taking it in turns to present the pros and cons of each. My summary of that piece was as follows:

There’s a fundamental problem with all the potential acquirers, and that’s that none of them seem likely to do anything meaningful to solve the product problem. Among the potential acquirers are several companies who could create substantial synergies with their own existing ad businesses, including Google and Verizon. Others could do interesting things with the data. But none of them have the kind of track record in consumer social products that gives me any kind of reassurance that they would do better in evolving Twitter as a product than the current management. Let’s review:

  • Google – famously inept at creating successful social products, more likely to acquire Twitter with the intent of finally fixing its own social challenges than to add meaningfully to Twitter’s abilities in this area. Decent ad synergies though.
  • Salesforce – literally no experience in consumer-facing products. Yes, it recently acquired Quip and with it founder Bret Taylor, but one executive isn’t enough. Again, some interesting synergies in other areas, but zero on the end user product side.
  • Verizon – another play for ad synergies, when taken together with AOL and Yahoo (assuming the latter goes through now that the hack has been exposed). But Verizon has no history with successful web or social products (and see Go90 for a recent example of a non-telecom product…).
  • Facebook is probably the only example among those frequently cited that obviously does get social, but it seems so much more likely to be successful in aping Twitter’s features than as an acquirer, not least because of possible regulatory barriers, that this just seems plain unlikely.
  • Microsoft and Apple also seem unlikely. The former has done some interesting things with small app acquisitions lately in the productivity space, but not in true consumer apps, and again has no social chops at all. The argument for an Apple acquisition also seems thin, while it vies with Google for the title of least socially adept consumer technology company.
  • Private equity buyers would have the advantage of doing the turnaround work in private without having to report to public shareholders quarterly. But that only makes me worry that there would be even less urgency about the product changes that need to take place.

In short, the prospects for an acquisition that would actually help solve the fundamental product problems seem very poor indeed. Add to that the inevitable turmoil and further delays in execution caused by the acquisition process itself, and I’m still more hopeful that Twitter will finally get its act together as an independent entity rather than be acquired. It’s just too hard to see things getting better rather than worse under an acquisition scenario.

Refocusing the Apple Watch

As part of my media comment on the Apple event, I talked a little about how Apple has rethought the Watch since its initial introduction two years ago. That thought deserves a deeper dive, and although we did discuss it a little on the Beyond Devices Podcast this week, I wanted to elaborate here. The word that I keep using in talking about what has changed is that Apple has refocused the Apple Watch, and it’s done that in two ways:

  • It’s refocused the feature set of the Watch
  • It’s refocused the Watch portfolio.

Refocusing the feature set

When it comes to the feature set, Apple famously introduced the Watch with an echo of the original iPhone announcement, with a tripartite identity:

  • the most advanced timepiece ever created
  • a revolutionary new way to connect with others
  • a comprehensive health and fitness companion.

Though the health and fitness companion came last on that list of three, it’s rapidly risen to the top in terms of how Apple talks about the device today. Tim Cook referred to it this week as “the ultimate device for a healthy life.” Meanwhile, the communication aspects (represented in that second bullet point above) have faded into the background, barely mentioned in this week’s keynote.

But the other thing that’s been de-emphasized in the refocusing of the Apple Watch is apps, and that’s because apps just haven’t worked on the Watch. In September 2015, Tim Cook described what I refer to as Apple’s playbook for hardware devices in the iPhone era, with a set of bullet points:

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

It’s clear that, both at its initial unveiling and a year later, Apple saw the Apple Watch as another product that fit this model, under which developer tools and the App Store would be critical to its success. I argued at the time that it would have been impossible for Apple to introduce a new piece of hardware in 2015 which didn’t tap into the App Store model, and yet I’m no longer sure of that view. Apps have largely flopped on the Watch. The reasons are simple – the hardware has been underpowered, and under watchOS 1 in particular apps were too dependent on the phone. But even in watchOS 2, Watch apps were too slow to load, because they didn’t maintain state and didn’t update in the background.

WatchOS 3 is intended to fix at least some of these issues, and the CPU and GPU upgrades in Series 2 of the Watch are aimed to improve app performance too. But Apple still didn’t make apps much of a focus at this week’s event. In other words, even with these potential enhancements to app performance, Apple is still focusing most of its messaging around the Watch on fitness features. I suspect that, instead of saying “this time we really got it right” after versions 1 and 2 fell short, Apple is going to quietly give developers time to figure this out, and then perhaps next time around we’ll see a renewed emphasis on how apps are adding value to the Watch. Pokemon Go and other high-profile apps may well help with this effort, but Apple is trying very hard not to oversell it this time around, and I think that’s smart. This particular form of crying “Wolf!” is running dangerously close to falling on deaf ears at this point.

The Apple Watch Hourglass

What I think we may see as a result is a sort of hourglass on its side, as in the diagram below:


The Apple Watch started out trying to be another micro computer. But Apple has now narrowed the focus to mostly being a great timepiece and an increasingly capable fitness device. In time, though, as the apps enhancements kick in and Apple works on other areas like Health in more depth, we may well see the purpose and positioning of the Watch become more expansive again.

The near-term implications of that are important to note: this means the addressable market for the Watch for the time being is mostly about a combination high-end fitness tracker and digital watch, rather than the broader “small computer” market which the iPhone and iPad arguably inhabit, and which is enormously larger. This, in turn, means that the Watch is likely destined for modest, incremental growth over time, rather than the sort of explosive growth that characterized both the iPhone and iPad in their early years. But as Apple begins to think about the Watch more expansively again, so the addressable market will begin to expand, and the sales potential of the Watch will grow with it.

Refocusing the portfolio

The original Apple Watch portfolio had three distinct tiers, with the Watch the core tier, the Sport the less expensive aluminum version, and the Edition the high-end luxury version, with prices to match. The price ranges for this original portfolio are shown in the chart below:

Apple Watch Pricing April 2015

Two important things to note: the enormous separation between the Sport and Watch versions on the one hand and the Edition on the other, and the sheer height of the Edition portfolio’s pricing, topping out at $17,000. That’s a 48:1 ratio between the most expensive and least expensive Watches.

Fast forward a little over a year and you have the new portfolio announced this week, with a slimmed-down Apple portfolio and two partner versions of the Watch as well. For comparability with the chart above, here’s a view of the new pricing to the same scale:


And here’s a version with a scale that makes more sense for today’s Watch pricing (note that the axis tops out at exactly a tenth the price of the axes above):


First things first: Apple has basically eliminated its ultra-luxury Watch Edition models. The only model that has this designation now is the white ceramic Watch, but that’s priced at roughly a tenth of the original Editions. The new price ratio, including the Hermès Watches which actually top out slightly higher than the new Edition watch, is roughly 5.5:1 from most to least expensive. It’s also worth noting that the three Apple ranges are still mutually exclusive but now more or less touch each other — there are no more big gaps in the portfolio, even at the high end. The Series 2 aluminum Watches, starting at $369, pick up just above where the Series 1 Watches leave off at $299, while the Edition hits at $1,249, again just a little above where the Watches peak, at $1,099. The Edition branding still connotes exclusivity and premium materials and therefore satisfy the conspicuous consumption angle, but Apple is now targeting the low end of high-end watches rather than true luxury watches.

Apple now also has its two key Watch partners, Hermès and Nike, to fill in gaps in the portfolio. It’s interesting that we’re seeing these partnerships so early, but I suspect this is another sign that Apple recognizes the nature of this market and its growth prospects. What Apple is doing here is diversifying the portfolio by feature and function early in order to better saturate the smaller addressable market.

Beyond Devices Podcast

If you enjoy these posts, you’ll probably enjoy the Beyond Devices Podcast, in which Aaron Miller and I discuss events like this week’s Apple announcements, as well as other topical issues, and also answer questions about trends in technology.

Our most recent episode is embedded below, and you can find all past episodes on our website, on iTunes, on Overcast, and in other podcasting apps.

Apple’s Headphone Transition Marries Pragmatism and Vision

Today’s Apple event was notable for the fact that so much of what was to be announced had leaked ahead of time. On paper, that left very few surprises for the event itself, but of course what the supply chain leaks can never supply are the reasoning and narrative around new product announcements. And so during today’s event in San Francisco, it’s the storytelling around the changes that I was most curious about, and nowhere more so than around the death of the 3.5mm audio jack.

In the end, the way Apple is handling this transition is a mixture of pragmatism and vision. Normally, you’d want the vision first and the details second, but I think Apple made the right call here in getting the practicalities out of the way first.

Pragmatism first

The biggest risk with the elimination of the headphone jack was that for the first time a new iPhone would feel like a downgrade rather than an upgrade. The minimum bar Apple therefore had to clear here was to achieve feature parity between previous iPhones and the iPhone 7. As a practical matter, that meant giving people an option in the box that matched the functionality of what had previously come in the box, and that meant providing both Lightning EarPods and a Lightning-to-3.5mm adapter.

Jason Snell joked recently that…

it’ll cost $19 if Apple’s sort of sorry, $29 if it’s not sorry, and if it’s free in the box then Apple’s really afraid of consumer backlash.

Of course, in the end, the adapter is free in the box, but that’s a sign of how much Apple wants (needs) this transition to go smoothly. It’s a transition driven by a vision, but it’s a long-term vision and in the short term Apple doesn’t want to lose any customers over it.

Vision second

So what is the vision here? Both Phil Schiller (in person) and Jony Ive (in disembodied voiceover) helped articulate it at the event. Here’s Schiller:

When you have a vision of how the audio experience can be, you want to get there as fast as you can and make it as great as it can be. And we do have a vision for how audio should work on mobile devices. And that takes us to our next feature: Wireless… it makes no sense to tether ourselves with cables to our mobile devices. But until someone takes on these challenges, that’s what we do. Our team at Apple has worked so hard to create something new that delivers on the opportunity of how good a wireless experience can be. That is why today we are so excited to show you a new product from Apple called Apple AirPods.

Ive encapsulates it even more succinctly:

We believe in a wireless future. A future where all of your devices intuitively connect.

If the iPad Pro is “the clearest expression of [Apple’s] vision of the future of personal computing”, then AirPods are the clearest expression of Apple’s vision of the future of audio on mobile devices. And the way AirPods pair to an iPhone is the best illustration of this future — here’s a tweet I posted with a short demo video from the hands-on area at the Apple event:

As you can see from the number of retweets and likes, that tweet struck a nerve. The pairing UX here is so much better than any Bluetooth pairing experience any of us have ever had before, and is the perfect instantiation of Ive’s comment about a future where all of your devices intuitively connect. It’s also a uniquely Apple experience, marrying hardware and software (and a proprietary wireless protocol) seamlessly in a way that creates a tightly integrated experience. Yes, it breaks the link with standards, but that’s classic Apple too, and it still leaves the door open to standard Bluetooth accessories connecting to the iPhone.

The vision is expensive — for now

The big problem with the vision? The $159 price tag. I’ve said all along that I was hugely skeptical that Apple would ship wireless EarPods in the box, and the biggest reason was that doing wireless right is enormously more expensive than doing wired right. Moreover, if Apple were trying to push a vision of wireless, they’d want to create something that wasn’t just good enough but truly outstanding, and that was never going to be possible at anything like the same margins as bundling EarPods that retail for $29.

In the end, of course, that’s turned out to be right — $29 Lightning EarPods are in the box along with an adapter that costs $9 when purchased separately, but the AirPods are $120 more than their Lightning predecessors. AirPods and wireless may be a vision of the future, but in the here and now they’re a little on the pricey side. This is where the pragmatism comes in — Apple had to use Lightning as a stopgap until such a time as the wireless future comes down significantly in price.

For those that want the future today (or in October, at any rate), there are AirPods and a range of W1-compatible Beats accessories ranging from $149 to $299. For the rest of us there are third party standard Bluetooth options and the Lightning EarPods. But I’m happy to bet that a couple of years down the line the price of headphones and earbuds using the W1 chip comes down signficantly to the point where the Lightning option is no longer necessary.

The Death of Project Ara Signals a Return to Adult Supervision at Google under Ruth Porat

Julia Love at Reuters reported Thursday night that Google has suspended Project Ara, which was its modular phone initiative, as part of a broader tightening of the belt across Google’s hardware business.

On the face of it, the failure of Ara isn’t surprising at all — along with many others, I’ve expressed skepticism throughout its life that it would ever come to anything. All that’s really surprising is the timing of its end of life, coming as it does just a few months after a big push around Google’s I/O developer conference.

To my mind, though, this is the latest in a series of moves that suggests some measure of “adult supervision” is returning to Alphabet and Google through CFO Ruth Porat. I’ve written a bit about this previously, but it’s come into a new focus for me over the last week or two.

By way of context, it’s worth going back and remembering where that “adult supervision” phrase came from. As Steven Levy and others have recounted, at pre-IPO Google, there was a sense among investors that Larry and Sergey weren’t the best fit for running a public company — they were too zany and undisciplined. As far as I can tell, Kevin Gray was the first to quote the adult supervision line in a February 2012 piece for Details called The Little Engine that Could:

LAST AUGUST, IN A SIGN THAT GOOGLE WAS APPROACHING MATURITY, Page and Brin relinquished management to famed Silicon Valley suit Eric Schmidt. “We were looking to not screw this up,” says Brin as we dig into smoked salmon and pepper-crusted top sirloin on a sun-filled porch outside the company cafeteria. The noodling strains of Jerry Garcia play in the background. “Basically, we needed adult supervision.” Brin adds that the board of directors, two of whom belong to their VC team, “feels more comfortable with us now. What do they think two hooligans are going to do with their millions?”

In a 2014 piece about the launch of Eric Schmidt’s book about running Google, he was quoted on what this adult supervision looked like:

“My instincts were always to manage to what we have; theirs was always to what is possible,” Schmidt said of the founders. “The latter is a better way to lead.”

Of course, Schmidt had given up this leadership in 2011, and famously re-used the adult supervision line in announcing the change:

What’s interesting about Ruth Porat’s arrival is that she seems to have brought some of this adult supervision back, but with a different flavor. The focus of her efforts — as befits someone who came from the investment banking world — is financial discipline. In some ways, it hearkens back directly to that quote from Sergey Brin above — she’s there to ensure that the “hooligans” don’t screw up with other people’s millions.

And there’s the rub: Larry Page and Sergey Brin have always been defined by their vast ambition and their desires to defy the odds and shoot for the moon (to the extent that Alphabet has a whole division devoted to “moonshots”). Schmidt’s natural tendency was to temper that magical thinking and bring it back down to earth. Though with rose-tinted hindsight in 2014 he praised their approach over his own, I suspect his approach won out a lot.

Under Ruth Porat, however, it seems the adult supervision has been more rigorous, especially when it comes to financial excess. Schmidt’s approach seems to have been about letting Page and Brin get away with as much as possible without really screwing up the company, while Porat’s approach seems to leave far less latitude. In that earlier piece I cited the sale of Boston Dynamics and the belt-tightening at Nest as evidence of a financial clampdown, but in the past two weeks we have the cuts at Google Fiber and now the death of Project Ara as further data points.

Grand ambition is admirable, as is attempting to defy the odds and prove the naysayers wrong. But such a mindset still has to be grounded in reality, and those who think this way still need to know when to give up. In the past, Project Ara might have run for much longer before being killed off, but it seems the new era of adult supervision at Alphabet will give such projects a much shorter leash. On balance, that’s probably a good thing.

A Different Way to Think about iPhone Upgrade Cycles

The context for next week’s Apple event is one of a maturing smartphone market, in two key ways: the devices themselves are becoming more polished, more reliable, and in many ways “good enough” even several years after purchase; and the market in developed economies is becoming saturated. This double-faceted maturity is causing smartphone sales – and especially premium smartphone sales – to slow and even to drop in markets like the US.

As such, it’s interesting that the three major threads in reporting about the new iPhones Apple will announce next week are:

  • Keeping the same general design as the iPhone 6 and 6s
  • Eliminating the 3.5mm headphone jack
  • Introducing new cameras, with the best only available on the larger device.

Of these three threads, two may be considered inhibitors to upgrades – however it’s positioned, the removal of the audio jack is likely to give some people pause, and the lack of a new design is also likely to make some people want to wait until the form factor changes next year. Among these three, only the camera improvements are a clear potential driver of upgrades, but the impact may be muted when it comes to the smaller device, and again those preferring that size may decide to pass this time around.

That seems like the obvious conclusion to draw from the reporting so far about next week’s event, if you focus on the likely hardware changes this time around. For context, here’s a table showing past annual iPhone hardware and software upgrades (you might need to click to enlarge it):

Annual hardware and software upgrades

Note that I’ve necessarily simplified the lists of upgrades to focus on a few – the actual laundry list of big and small features would be much longer for each year. The point is, though, that each new iPhone comes out of the box with both new hardware features and new software features relative to the previous version. The software features are, of course, also available to those who keep their devices of recent vintage through iOS updates.

What Apple observers – especially in the press – tend to focus on is the annual hardware upgrade. That makes perfect sense – it’s what’s new, and it’s also what’s unique to the experience of buying that device over keeping last year’s. But of course the default upgrade cycle isn’t annual but biannual – the most common timeframe for upgrading an iPhone in the US and many other markets is every two years, not every year. Certainly there are those who upgrade every year, and those who upgrade on a longer cycle, but in terms of averages the mode duration is two years, and the mean is in that ballpark too.

That rather changes the picture in terms of thinking about the hardware upgrade cycle, so let me introduce a second chart that illustrates how this makes a difference:

Two year upgrade cycles

Apple doesn’t generally talk about specs like processor speed or RAM, but I’ve included them because they’re the simplest illustration of the behind the scenes improvements made in each new iPhone. The key column in that table is the last one, because it is a much better indication of the hardware upgrades iPhone users upgrading every two years will see when the buy a new phone. This column combines the hardware improvements made in both the subsequent devices, all of which are present in the new phone.

Let’s go back to next week’s event. Apple will introduce what we presume will be the iPhone 7 and 7 Plus, with camera improvements, behind the scenes speed upgrades, and possibly some surprise features that simply haven’t leaked. But even excluding all of that, anyone upgrading from an iPhone 6 from two years ago will get:

  • 3D Touch
  • Live Photos
  • 4K video recording
  • Faster Touch ID
  • Noticeable speed improvements.

That’s already quite a bit – now add in camera improvements and whatever else is new in the iPhone 7, and it suddenly becomes a pretty compelling upgrade. This is the way to think about the iPhone upgrade cycle and what Apple announces next week. Apple tends not to talk about this, and it doesn’t tend to recap all the new features that were already in last year’s phones, but all that absolutely matters to the typical customer upgrading on a two-year cycle. And that’s why I suspect Apple may be able to get away with this departure from its normal upgrade cycle and the risks it’s taking with keeping the form factor from the iPhone 6 and 6s and ditching the headphone jack.

For more on all this, and a general preview of the Apple event next week, you might want to listen to this week’s episode of the Beyond Devices Podcast, which is also embedded below: