Category Archives: Apps

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.

iPhone

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.

iPad

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.

Why Windows 10 can’t fix Windows Phone

Ahead of Microsoft’s next reveal of Windows 10 later this week, lots of blogs and news outlets are talking up the promise of the new operating system to unify the PC and mobile versions and in the process “solve the app gap”. Most of what I’ve read, though, seems to look straight past a huge flaw in this whole concept, one that I’ve talked about several times in other places (notably in my in-depth Windows Phone report from a few weeks back – available here for free).  As such, I wanted to just quickly lay it out here for simplicity and clarity.

First, the theory: in Windows 10, Microsoft is creating a single operating system which will run across different form factors, with much of the underlying code shared and the rest tweaked by device type and size. This will allow developers to create apps which run 90% of the same code, with just some customizations for different device types and sizes. This, in turn, will allow Microsoft to tap into the vast number of Windows PC developers, who will now be able to port their apps to Windows Phone will very little additional work, which will drive a large number of new apps to the mobile platform, reducing the app gap relative to iOS and Android.

However, there’s a fundamental flaw in this argument, which is that the apps Windows Phone is missing simply don’t exist as desktop apps on Windows. Just think about it for a moment, and you’ll realize it’s empirically obvious: almost all the apps which are most popular on mobile are in one of these categories:

  • Games, which dominate the app stores, and tend to be mobile-only in many cases
  • Properties which exist as websites on the desktop and only exist as apps on the mobile side
  • Properties which are mobile-first and/or mobile-only, such as Instagram, Vine, Viber and so on.

But we don’t need to rely on gut feel here – it’s very easy to do the analysis. I’ve pasted below two small thumbnails which you can click on to expand to full size. They show tables for the top free iOS and Android apps as of today, according to App Annie. Against each of the apps I’ve completed several more columns to reflect the following data:

  • Is the app already in the Windows Phone store?
  • Is there a desktop app on Windows (any version, not just Windows 8)?
  • Is this an app which is actually a website rather than an app on the desktop?

I’ve then done some filters in the following columns to answer each of the following questions:

  • Of those apps which are not on Windows Phone today, are these available for Windows PCs today?
  • Of those apps which are not on Windows Phone today, are these available as a website on desktop?
  • Of those apps for which there is a desktop app on Windows today, are these also available on Windows Phone?

You can go ahead and have a look at the tables to see the results for yourself (they should open in a new window or tab by default):

Screenshot 2015-01-19 09.54.42Screenshot 2015-01-19 09.54.57

But here’s the summary:

  • Among the top 50 free iOS and Android apps, there is not one which is not on Windows Phone but exists as a desktop app on Windows
  • Among the top 50 free iOS and Android apps, there are a handful which exist as websites but not as desktop apps (almost all owned by either Google or Apple)
  • All of the top 50 free iOS and Android apps for which there is a Windows desktop app already exist as Windows Phone apps today.

In other words, if the theory is that sharing a code base across desktop and mobile will lead to desktop apps being ported to the mobile environment in greater numbers, within this sample at least this has no applicability at all. All the apps available on Windows PCs are already available on Windows Phone. A handful of the rest exist as websites on the desktop, but the vast majority simply don’t exist today on any flavor of Windows.

There are two important caveats here. Firstly, this analysis only looks at the top 50 apps, and a different pattern could theoretically emerge if one were to examine a longer list of apps. However, from what I’ve seen the patterns are broadly similar, and the same conclusions would apply. Secondly, this analysis focuses on the most popular apps, which are naturally dominated by consumer-facing applications and not those used in the enterprise. I do believe that there are cases where desktop apps exist for enterprises but not yet for Windows Phone, and in this case the theory behind Windows 10 may well have at least some applicability. But that’s a far cry from saying that Windows 10 will help to solve the app gap, which is fundamentally a consumer problem, not an enterprise one.

Having said all this, I’m very curious to see what Microsoft has to say this week with regard to the mobile flavor of Windows 10 in particular. I think it’s getting a lot right in Windows 10 more generally, but the real solution to fixing Windows Phone lies in making the platform more compelling to consumers, and not just at the low end where it’s currently so focused.

For further reading on Windows and Windows Phone:

An archive of all my previous posts from this site on Microsoft is here.

King’s downfall in charts

King Digital, maker of Candy Crush, reported its earnings for Q2 2014 on Tuesday, and they weren’t pretty. The market acted as if its results had suddenly soured from one quarter to another, but the reality is that most of the underlying trends have been worsening for about a year now, since well before its March IPO. See the charts below.

As a primer, two things to know about King and its financials. One is that Candy Crush, easily its most popular game, dominates its results. The other is that its main business model is in-app purchases, and that this model works on the basis that a small percentage of its users make them, but those that do make them spend enormous amounts of money on them. So bear those two facts in mind as you proceed.

First, gross average bookings per user, which King reports on a daily basis. You can see that these peaked a year ago, in Q2 2013, and have been falling since:

Gross bookings per userSo why is this number falling? Well, almost every component which goes to make up that number is in decline or at least slowing down. First, overall user numbers, which King measures three different ways (daily active users, monthly active users, and monthly unique users, all in millions): Continue reading