Category Archives: Apple

Apple, Beats, Beats 1, DJs, Ebro Darden, iTunes, Julie Adenuga, Music, Radio, Zane Lowe

Some thoughts on Apple’s Beats 1 DJs

For the Beyond Devices podcast last week (embedded at the bottom of this post), we discussed Apple’s content-focused announcements from WWDC, including Apple Music. For our Question of the Week (a regular feature), we discussed one specific element of the Music service, and that was the three DJs Apple hired for Beats 1. We discussed that for probably 10-15 minutes (it starts around 20:25 in the episode), but I thought I’d quickly share some of the key points here.

Apple has hired three DJs for Beats 1 (so far):

  • Zane Lowe, who comes from BBC Radio 1, and is the figurehead of the service, and by Apple’s implication pulled in the other two
  • Ebro Darden, from New York’s Hot97, a mostly hip hop station, where he was until about a year ago the station director, and where he has been presenting the morning show
  • Julie Adenuga, from RinseFM in London, the least experienced and well known of the three.

I’ll talk about each in turn below, and then share some general thoughts about these DJs and their significance.

Zane Lowe – Global (LA)

Zane Lowe will be the voice of the global station, and this is the last of a series of transitions that’s seen him go from growing up in New Zealand to working in a record shop in London’s Notting Hill to hosting a show on XFM in London, to BBC’s national Radio 1 station, to arguably the first mainstream global radio station at Beats 1. Zane Lowe has a unique style as a DJ, though it was frustratingly difficult in my research to find examples of him broadcasting (ironically, because BBC iPlayer provides a great legitimate source of rebroadcasts, but yanks them after a month or so, and Lowe stopped broadcasting in March). He tends to talk over tracks, react vocally to things, and generally make lots of noise. Above all, he’s an enthusiast about music – not a critic for criticism’s sake, but someone who genuinely loves music and wants to share the best stuff with other people. That’s also made him something of a tastemaker, helping new acts break into the public consciousness – that’s important, and something I’ll come back to below.

Lowe is also a performer in his own right as a DJ, and has contributed producing and writing talent to other artists, which earned him a Grammy nomination for his work on Sam Smith’s breakthrough album. He’s brought some interesting segments to his Radio 1 show in the past, including doing deep dives on classic albums, playing the whole thing through and discussion it and related topics on his show – it’d be very interesting to see him do something similar on Beats 1, though I’m sure he’s got plenty of other ideas. He’s also done lots of interviews with high profile artists including Kanye West, Jay-Z, Chris Martin, and Eminem. Above all, Zane Lowe is a mainstream, top 40 music kind of guy, covering all the popular genres without going deep on any of them. Radio 1 is the BBC’s youth-oriented popular music station, and that’s very much his role at Beats 1 too.

Ebro Darden (New York)

Ebro Darden is another very experienced DJ, but one who’s much more narrowly focused on a specific genre, hip hop, rather than covering the breadth of stuff Zane Lowe covers. Hot97 is one of the major hip hop stations in the world, and as such he and his fellow DJs have become some of the arbiters of what’s good and even what counts as “real” hip hop (see this Radiolab episode for a fascinating discussion of one of Darden’s colleagues at Hot 97, a Jewish guy called Peter Rosenberg who’s nonetheless one of the major influencers in the hip hop world, somewhat controversially). So even though Apple positions Ebro Darden as covering the New York music scene, I suspect he’s actually going to be covering mostly that genre, a subset of the stuff Lowe will play.

Darden is also a more controversial figure, willing to mix it up with artists and others on Twitter and elsewhere, calling them out on their false claims to hip hop credibility and such, which makes him a more controversial figure than Zane Lowe, and one who’s willing to call out things he doesn’t see as kosher. Again, though, he’s a tastemaker as well as just spinning discs people already know and love.

Julie Adenuga (London)

Julie Adenuga is to my mind the most interesting and surprising of the three: she’s far less well known than the others, she’s a lot younger (mid 20s rather than early 40s), and has a lot less experience as a DJ. She’s a fascinating choice in that way. She’s also much more like Ebro Darden than Zane Lowe, in that she’s associated with a particular genre of music, broadly speaking a certain brand of London club music, but more specifically the Grime genre, which is a sort of evolution of the UK flavor of garage music (both styles combine electronica with rap-style vocals). She has two brothers who are prominent grime musicians in London too, so there’s some family credibility in that particular genre in addition to her own self-made success as an up-and-coming DJ on Rinse FM, a former pirate radio station that went legitimate around the same time she joined a few years back.

She’s got a fun personality both on the radio and in videos I came across during my research, and my favorite quote from my research was “Her drive time Rinse FM show became scientifically proven as the only thing that could make you smile on your way home on a London bus”. That should make her a fun DJ on Beats 1, too. Like Zane Lowe, she’s done lots of interviews with popular artists both on the show and elsewhere, and I wonder if she’ll bring some of that to Beats 1 too.

General thoughts

What really stood out to me with all three of these DJs is that they’re not just figureheads, but tastemakers, defining tastes and breaking new artists in a way no algorithm ever could. Though Spotify, SoundCloud, and the like have undoubtedly helped break some new artists, it’s largely the social element and the users that have made that happen, not the curation or recommendations from the services themselves. Beats 1’s DJs could therefore add an interesting new angle, not just helping you discover stuff you don’t know about that others do, but helping to bring new artists to the world for the first time as well.

Another big question in my mind is exactly how Beats 1 will be structured – with just three DJs, it can hardly be a 24/7 radio station, so how will Apple fill the remaining air time? How often will each of these DJs “broadcast” and to what extent will this be a live experience or a pre-recorded thing more like a podcast that you listen to when it’s convenient? And although there are three DJs already, it’s clear that there’s plenty of music out there that these three wouldn’t cover, notably jazz, classical, and even many other sub-genres of the mainstream stuff Zane Lowe covers, with just two genres covered by Darden and Adenuga for now. It’ll be interesting to watch this set of DJs evolve over time and to watch also how Apple will package all this up into a radio station.

It’s also fascinating to watch Apple building a radio station, when traditional radio stations (including Zane Lowe’s former employer Radio 1) are evolving their branding and position beyond the traditional radio model and towards YouTube, Snapchat and other media in addition to radio itself. Apple, of course, has many other music related offerings beyond Beats 1, including Apple Music and its new Connect service, but in some ways Apple is moving against the stream (no pun intended) at the moment. It’s worth noting that even Spotify is moving into video.

At any rate, if you want to listen to us discussing all this on the podcast from last week, you can do so using the embed below, or go straight to the website to see this and other episodes as well as links to iTunes, Overcast, and so on for adding the podcast to your podcast app of choice.

Apple, Developer events, Developers, Google, Microsoft, WWDC, WWDC 2015

Ten quick thoughts on WWDC

Yesterday was a busy day, as these keynote days always are – several hours of waiting around with very little to do, followed by several hours of frenetic activity both during and immediately after the keynote, as I prepare a quick comment for reporters, talk to some reporters, and do quick write-ups for clients. I feel like my head is still spinning, and although I have a variety of things I want to write about, I don’t feel quite ready to do a deep dive on any of them yet. As such, I’m going to do something a bit different – post several short thoughts here, some of which I may expand on with proper blog posts later, and some of which we may talk about on the Beyond Devices Podcast later this week (we’ll be recording Wednesday and the podcast will hopefully go up Thursday).

Music majors on what I said it should

Apple Music majors in part on what I said it should in this piece I wrote back in April – that is, it differentiates partly on the basis that it gives you a single home for your existing collection of music and the new stuff you access through the service, with the ability to easily add new material to your library. I also said in that piece that I thought Apple Music might be most relevant to older folks with more money than free time, and that still feels right.

Beats 1 is a weird hybrid

Beats 1 is a funny mix – neither algorithmic curation nor human, personalized curation, but generic human curation, just like traditional radio. To my mind, Beats 1 is the strangest part of the Music launch – the piece that feels like it doesn’t belong, and perhaps was Apple’s desperate attempt to provide a headline feature to set Apple Music apart from other subscription music services. In my mind, it wasn’t needed – as I said above, I think Apple Music already differentiates itself in the most important way. Then, behind Beats 1 is now hiding a series of more customizable radio stations, which used to be known as iTunes Radio. Lumping all this together as radio also feels like it might be confusing, but at least iTunes Radio is being infused with some Beats smarts, which should make it better. I also wonder if Beats 1 is a concession to trying to appeal to the younger crowd, despite the older appeal I think most of Apple Music will have.

Connect feels more significant

On the other hand, Connect feels more interesting, and more unique. Whereas Spotify (and to a lesser extent Deezer, Rdio etc) has always seemed the target (victim?) of Apple Music, Connect feels like it’s going after SoundCloud and YouTube, where many undiscovered artists make their start. The problem today is that once an artist breaks through they tend to withdraw from these platforms and become increasingly distant from fans. Some artists (Taylor Swift seems a great example) maintain a direct connection with fans through social media, but for many others there’s this disconnect. I feel like Connect could be the first platform that gives artists a home that will work whether they’re undiscovered in their bedroom or coming off a platinum record. Connect also feels like a big tool for appealing to younger users.

The Music launch should have been its own event

Music was the “one more thing” at the end of the keynote, but it really didn’t fit there – in days past, this launch would have had its own event (likely in the fall, Apple’s traditional time for such events), but instead it was squeezed in here. This was a mistake – it didn’t do the service justice, and the Music segment felt rushed and cluttered, but still left all of us somewhat unsure about exactly how it works. It really should have been its own event, separate from WWDC (which is, after all, a developer conference, and there’s no developer angle to Apple Music – yet).

Developer events are getting cluttered

This brings up a broader point – each of the major developer events – Microsoft’s Build, Google’s I/O, and Apple’s WWDC – feels increasingly cluttered. As the aspirations and reach of these companies grows, a single annual two-hour keynote is becoming an increasingly poor way to communicate all that needs to be communicated. Microsoft does two keynotes, which is one way to deal with the problem (Google has done this in the past). But it just highlights the degree to which this two month period in the late spring is becoming a huge pile-up of news, that doesn’t really serve anyone well. All three companies should be thinking about spreading this stuff out more.

The Apple TV news merits its own event too

Speaking of all this, where in the world would Apple have fit the three major pieces of Apple TV news at this year’s WWDC? With a keynote that already felt light on detail and rushed, how could it ever have hoped to also announce new Apple TV hardware, and Apple TV SDK, and the Apple TV service? Thankfully, we didn’t have to find out, and that will likely all be announced together at a later date. I just hope it won’t all be crammed into September’s iPhone event. Perhaps the iPad event in October?

Native apps on Watch are the biggest developer news

Although iOS and OS X are the two big focus areas for WWDC each year, to my mind the most significant news by far was watchOS 2, and especially the ability for developers to create native apps and tap into the hardware and software features of the Watch directly. I’ve always felt that third party apps will be a huge part of the mainstreaming of the Apple Watch (just as they were for the iPhone and iPad before it), but the early model of companion apps and WatchKit just wasn’t going to cut it. I see a huge swathe of much more compelling Watch apps later this year when watchOS 2 becomes available, and I think we’ll see a huge growth and broadening of the appeal of the Watch as a result.

Google and Apple did stability releases while Microsoft goes big

There was some interesting timing this year at the developer events – Apple did its big overhaul of iOS in 2013 and OS X in 2014, while Google also did its major overhaul of Android in 2014. This year, both these companies focused on stability releases with relatively incremental improvements and lots of polish. By contrast, Microsoft is releasing its biggest Windows upgrade in years, across all device categories. I haven’t yet thought through all the implications of that (beyond mere intellectual curiosity), but it’s interesting to ponder.

Siri advancements reinforce Apple’s privacy stance

The Siri announcements were a wonderful validation of the piece I published last week on Apple and privacy. In that piece, I wrote that nothing in Apple’s privacy stance should prevent it from being able to do clever and useful things in iOS and beyond to better serve users with machine learning, and its WWDC announcements reinforced that. Enhancements in Siri and Spotlight are the best examples, but the natural language processing improvements in multiple individual apps are part of this broader picture too.

Apple is retaking control of content

Apple has been big in content for twelve years, since the launch of the iTunes Store in 2013, and continuing with major launches like TV shows and movies in iTunes, iBooks, Newsstand, and so on. However, for the last several years Apple has seemed adrift in content, a victim rather than a driver of trends, and has seen its content revenues stagnate and fall even as third party apps explode (along with the associated revenue stream for Apple). This year, Apple finally seems to be retaking control of control, with the News app, Apple Music, and presumably the Apple TV service later this year. Apple finally seems to be embracing subscriptions in music and video, and recognizing that some of its other content platforms (notably Newsstand) aren’t working and rethinking them. News puts it uniquely in control of a certain form of content, while Music also gives it some unique ownership of artist-created and DJ-created content, which is a fascinating shift.

Advertising, Apple, data, Privacy

Apple and Privacy

2 Comments

Apple’s privacy stance has been in the news again this week, mostly because of a speech Tim Cook gave to an event in Washington, which honored him for his (and Apple’s) commitment to privacy and encryption.

Apple’s admirable but over-played privacy stance

My reaction to the speech has been somewhat mixed, as these two tweets indicate:

As I see it, Apple’s commitment to privacy is an admirable one, and one that provides a useful competitive vector as it seeks to differentiate itself against companies like Google and Facebook. But I feel that here, as when Tim Cook repeats the now-hackneyed phrase “when you’re not paying, you’re the product”, he’s overplaying Apple’s hand 1. There’s an underlying truth to both of these claims, but it’s not as cut and dried as Tim Cook makes it seem to be. And I believe that’s likely just positioning, or in other words making the point in the strongest possible black-and-white terms, even though Tim Cook (and the rest of Apple’s leadership) clearly understands that there’s more nuance to this in reality. It’s obvious that many people do value these free services, and are willing to make the tradeoffs inherent in them (if they understand them at all). If Apple really believed everything Tim Cook said in literal terms, I’d be worried about the company, but I don’t actually believe it for a minute, though I absolutely buy Apple’s commitment to privacy and its intention to continue to differentiate on this basis.

Privacy and machine learning

Ben Thompson, in his excellent Stratechery daily email (subscribe here) makes to some extent this same point in his email today, and I agree with those thoughts pretty completely. But he and others have also taken this point further and talked about a supposed downside to all this, which is that by refusing to collect personal data about users, Apple risks not being very good at machine learning. I actually think this point is false, because it conflates three different kinds of data collection and analysis:

  • Data collected on an aggregate basis to allow computers to determine broad trends, better understand text and speech across the entire base, glean information about searches and the best responses to them, and so on. There is nothing user-identifiable about this form of data collection.
  • Data collected about individual users to better customize services and products to their individual needs – i.e. learning favorite places, home and work locations, building patterns of searches to better interpret future searches, and so on. This kind of data collection exists on a spectrum, with some forms of data explicitly provided by the user and others easily inferred, with other data reliant on deeper analysis.
  • Data collected about individual users to build profiles which can be used to target advertising. The only benefit to the user from this form of data collection is making the ads they see more relevant, and the downside is a vague sense of creepiness that third parties are suddenly serving up ads which make use of quite private data from browsing, searches, or the contents of emails (and potentially photos).

The reality is that machine learning takes place across these three different types of data collection, but only the first two are primarily about creating a better experience for users, and Apple has shown itself to be perfectly willing to engage in the first kind with products like Siri and Spotlight, and quite comfortable with at least some forms of the second. It’s only the third category that Apple eschews and which Tim Cook appears to be criticizing other companies for in his public remarks.

Apple’s privacy stance

The table below summarizes my inferences of Apple’s privacy stance on these three categories:Screenshot 2015-06-05 09.37.14If this is accurate, and I believe it is, then Apple isn’t constrained at all when it comes to broad improvement of its services on an aggregated basis, because it’s clearly entirely comfortable with this form of data collection and analysis, and has even recently started crawling websites itself to further this effort. In the second category, it seems very comfortable with building basic profiles of its users through a combination of data users actively pass to its systems and a small amount of data inferred from behavior 2. As such, it’s capable of customizing certain of its services and willing to do so. One good example of this is the customization of its QuickType keyboard on a per-user basis, although Apple is careful to point out that “Your conversation data is kept only on your device, so it’s always private.” When Apple does customize services on a personal basis, it often keeps the information on the device, unlike competitors who use cloud services to make these customizations available across devices, which really does constitute a compromise on Apple’s part. 

However, it’s the third form of data where Apple really seems unwilling to engage in broad data collection and analysis, and that really doesn’t affect its ability to provide its users with compelling services. As such, I think it’s a stretch to suggest that Apple will somehow always be inferior at machine learning because it eschews targeted advertising – the two are for the most part separate, and it’s entirely possible for a company like Apple to engage in both broad based aggregate machine learning and machine learning on an individual user basis without either compromising privacy or engaging in the type of behavior it’s criticizing in others.

Apple still has work to do in machine learning

None of this is to say that Apple is just as good at machine learning as competitors. I honestly believe this is the core of Google’s differentiation as a company and Facebook seems to be becoming increasingly strong in this area too. Apple is currently weaker in these areas, but I don’t believe that its privacy stance is the reason – I just think it hasn’t chosen to invest in these areas as heavily, and to the extent that it is doing so now, it has some catching up to do (and it seems that at WWDC Apple may announce some advancements in this area relating to Siri).

The same applies to Apple’s cloud services in general – this simply hasn’t been a major focus for Apple so far, for a variety of reasons, and its cloud services simply aren’t as strong as competitors’. Google Photos is a great example of that – its seems to do certain things much better than Apple’s Photos product, and a large part of that is about machine learning. And yet Google Photos is also a great example of exactly what Tim Cook is talking about – the inherent unease about sharing such personal data with a company you know would like to use it to target advertising to you. If Apple produced a similarly compelling product, there would be none of that unease, but you’d likely pay for the privilege of using it directly. Therein lies the real difference between Apple and its competitors.

Notes:

  1. For a more nuanced analysis of the latter claim, please see this post ↩
  2. See this earlier post for an example of this, which Apple hasn’t shouted about much to date ↩
Android, Apple, Beats, iMessage, iTunes, Messaging, Music, Windows

Expanding Apple services on non-Apple devices

3 Comments

A few months back, I wrote this piece which talked among other things about why Apple doesn’t make most of its services available on third-party devices. The basic argument can be summed up in this quote from that piece:

When the whole rationale for Apple’s software is to add value to its hardware products, the idea of providing cross-platform software or services becomes inimical. To the extent that Apple software or services are available on non-Apple devices, they cease to provide meaningful differentiation for Apple products.

However, Apple has continued to make some services available on third party devices, and I see potential for more of this in future. I definitely don’t see Apple abandoning the strategy I outlined in that post, but I do see potential for them to broaden the range of what they provide on non-Apple devices, so in this piece I’m going to argue the other side of that earlier piece.

The iPhone and Mac installed bases

The key to all this is to understand the difference between the iPhone and Mac installed bases. The iPhone is now in every way Apple’s lead product – it accounts for half to two thirds of total revenue in any given quarter and the lion’s share of profits. And it’s also the Apple product with by far the largest installed base. Let’s look at the numbers quickly:

  • iPhone: around 450 million users
  • iPad: around 200 million users
  • Mac: around 80 million users.

We’ve leave the iPad to one side and focus on the iPhone and Mac. What this leaves us with is a world where there’s only very partial overlap between iPhone users and Mac users, with the vast majority of iPhone users likely owning or using Windows PCs rather than Macs, if they use a PC at all:

Mac iPhone and Windows basesApple has done a great deal over the past couple of years to better serve Mac + iPhone users (including those who also have iPads), including various iCloud features, and the Handoff and Continuity concepts and their associated feature sets announced at last year’s WWDC. All this makes owning more than one Apple device better than owning just one, because the devices you have work better together. The Apple Watch extends this even further, and deepens the attractiveness of an all-Apple ecosystem.

300 million Windows + iPhone users

However, there are still several hundred million iPhone users who don’t own or use Macs on a daily basis, many of whom do use Windows PCs, either by choice or because work, cost constraints, or other reasons require them to. This Windows + iPhone group is actually substantially bigger than the Mac + iPhone group Apple has spent so much time serving, probably around three hundred million or more:
Windows plus iPhone diagramIn an ideal world, Apple would have these Windows + iPhone users become Mac + iPhone users over time, but that isn’t a realistic scenario for a variety of reasons, especially in the short term. So, how does Apple serve these users?

iTunes on Windows and beyond

Well, the answer began with the launch of iTunes on Windows in 2003, two years after the original launch on the Mac, in an attempt to create a market for the iPod larger than the base of Mac users. With the launch of the iPhone, Apple piggybacked off this iTunes installed base as a way to make that product, too, Windows compatible. Since that time, Apple has introduced a few other pieces of installable software for Windows PCs, but much of its effort in supporting Windows users recently has been in the form of web apps rather than native software:Apple software on WindowsiCloud Drive is the only new product Apple has introduced for Windows recently, and it builds on earlier versions of the iCloud product for Windows, which enables some of the extensions and add-ons shown in the middle column in the table above too. But Apple has now made a fairly wide range of products and services available on the web, at iCloud.com, as shown in that third column. These serve the Windows+iPhone reasonably well for some use cases, though I can’t imagine as a Windows user wanting to use the web versions of the iWork suite as my main productivity apps.

What’s missing?

At this point, it’s worth asking what else Apple needs to do to make its products available on third party devices, and whether it’s likely to do so. Here’s a short list of potential next steps:

  • A web version of Maps
  • iTunes on Android devices
  • The Apple music subscription service on Android
  • Messages on Windows and/or Android
  • The iLife apps on Windows and/or Android
  • iBooks on Windows and Android.

There may be one or two other gaps, but I think that about covers it. Which of these seem most likely at this point? The diagram below shows my estimate of the likelihood of each of these things happening:3rd party apps next stepsIf Apple hadn’t acquired Beats in order to build a subscription music service, I would have put the likelihood of Apple’s music service landing on Android much lower than I have, but since Tim Cook has already signaled that Beats will remain on Android, it seems a fairly sure bet that the successor will be there too. I don’t quite understand the strategic rationale here – almost anything on Android seems to fly in the face of Steve Jobs’ quote in the Walter Isaacson book:

We put iTunes on Windows in order to sell more iPods. But I don’t see an advantage of putting our music app on Android, except to make Android users happy. And I don’t want to make Android users happy.

The only real explanation I can see (beyond maintaining the status quo ante with Beats) is that Apple is competing head-on here against existing subscription music services, all of which are available cross-platform, so this is a concession to reality. But it still feels odd.

Maps on the web seem very likely to me – Google’s web maps were a fantastic hook for Android when it arrived, because it allowed people to make a seamless transition from the product they used on the web for planning, figuring out a route and so on to the one they used on their smartphone for actually navigating from A to B. The fact that Apple doesn’t have a Maps option for anyone using a Windows PC means that those users are far more likely to use other mapping services both on the web and on their phones, or to have disconnected experiences on those two devices. Apple has posted job listings several times (including one that was noticed today) indicating that it might be looking to bring its Maps app to the web, and this seems eminently believable. I’m only putting this slightly lower than the subscription service on Android because that seems largely a foregone conclusion, whereas Apple seems to have been toying with the idea of a web maps app for some time without pulling the trigger.

Essentially everything else I listed seems significantly less likely to happen, although if the music subscription service lands on Android it might make sense to make the full iTunes experience available on Android too. iBooks makes little sense as a cross-platform product – people don’t read many books on their PCs in comparison to tablets and smartphones, while porting iLife would be a huge effort and significantly undercut one of the differentiators of the Mac. Messages was actually the specific focus of the earlier post I referred to at the outset of this one, and I outlined there the reasons I can’t see that happening. It feels like the archetypical example of Apple’s own-devices-only strategy, and it’s also uniquely mobile-first among all these products.

We’ll know more next week

I’m writing this the week before WWDC, where I expect that at the very least we’ll see the music subscription service launch and know whether it will indeed land on Android in either its full or a watered down form. But we’ll likely also get more clues about how Apple sees the opportunity beyond its own devices, and whether the current set of products and services for the Windows + iPhone crowd represents the outer limits of how far Apple is willing to go to keep them happy.

Apple, Design, Jony Ive

Jony Ive’s promotion

2 Comments

Yesterday, CEO Tim Cook announced to Apple employees that Jony Ive had a new title and role within the company. The change has been described as a promotion by Apple, but I’ve seen some skepticism about this characterization externally. I have no inside information here, but based on what I’ve seen from Apple and others, I had a slightly different take on what’s going on here.

Freeing up a creative person to be creative

I’ve been an industry analyst for 15 years at this point, and I spent the first 13 years of that time working within a firm of industry analysts. One of the things that I learned during that time was that the best analysts often made the worst managers, and vice versa. It was a rare thing to find a really good analyst who both enjoyed being a manager and was good at it. Why do I mention this? Well, creative work and management take fundamentally different skill sets, and they’re rarely found in the same individual. And yet, the longer we’re in our professions, and the more senior our job titles become, the more likely we are to be placed in roles where part of our job is managing other people.

I see no evidence that Jony Ive is a poor manager, but the reality is that he’s first and foremost a creative person, a designer, and not a manager. By virtue of his longevity and seniority at Apple, he’s ended up managing the design team, but I would suspect that this isn’t how he wants to spend much of his time. Ive can’t simply be off in a room by himself designing things if he’s going to continue to have the lead design role at Apple, but he can be freed up from some of the day-to-day management, delegating a lot of the minutiae to others in the team, and especially to his two lieutenants, Howarth and Dye. This delegation is all the more important given how many new design projects Ive is taking on, in relation to the retail stores, the new campus, and who knows what else. As others have pointed out, the recent profiles of Ive have portrayed a man stretched very thin, and I would guess that, given the choice between yielding some management responsibility versus yielding design projects, he chose the former.

Does this mean he’s staying, or going?

As I mentioned at the top, some have seen these changes as a sign that Ive is moving on. To my mind, there are two possibilities here: either Ive is now going to be rejuvenated by relinquishing some of his responsibilities and will gain a new lease of life, or this represents his last hurrah, with redesigning the stores and designing the campus as his valedictory efforts before moving on. Perhaps even he doesn’t know yet – maybe the change in his role is an attempt by the company to find a way to keep him happy even as he’s feeling the pull back to England and out of a day-to-day role at Apple. And maybe neither Tim Cook nor Jony Ive nor anyone else knows whether this will work yet. But I suspect (and hope) that it means Ive will be free to focus on what he does best – design – and that we’ll get lots more good stuff from him over the coming years.

One quick postscript: I’ve seen a couple of people suggesting this new role for Ive is a sort of Jobs 2.0: consolidating power at the top of Apple. But I think that’s the furthest thing from the truth. Whereas Jobs was the consummate micro-manager, injecting himself into every detail of Apple’s operations, I suspect Ive’s temperament is the opposite. Yes, he obviously cares deeply about every aspect of design at Apple, but in the profiles that have appeared over recent months, it’s become clear how many other people already have a hand in the details of design, and it’s clear that Ive has little interest in management beyond the realm of design. In some ways, Ive is the anti-Jobs, focused on his particular sphere of expertise with little interest in going beyond it.

Apple, Apple TV, TV, Video

Why an Apple television doesn’t make sense (and does)

1 Comment

It appears some sources at Apple have this week indicated to Daisuke Wakabayashi at the Wall Street Journal that Apple is no longer actively working on making a television. This doesn’t surprise me in the least – the project never really made sense to me as I’ve repeatedly written and told reporters over the past several years. It may seem like odd timing, but I thought I’d outline my thoughts as to why this is so, and at the end talk briefly about a couple of reasons why it does make sense.

Cost, margins and differentiation

If Apple did make a television, there are several things we can be fairly sure of: it would make it out of the same premium materials as almost everything else it makes, and it would want to make sure margins on such a product were in line with the rest of its product line. The challenge here is that Apple would be starting at a very small scale, so would enjoy none of the benefits of economies of scale that current TV makers have, and current TV makers already operate at razor-thin margins. Consumer electronics generally is an incredibly low margin business – single digit operating margins are the norm when companies make any money at all. For Apple to come in, raise the cost significantly because of both premium materials and its lack of scale, and then to try to recoup its supra-normal margins too would drive a price at least twice as high as televisions with similar specs, if not significantly higher. And of course we have a precedent for this in similar products: Apple’s 27” Thunderbolt display retails at $999, while Dell’s equivalent product retails for $599, Asus has one for $430, and low-cost brands go significantly lower. (I’m even completely ignoring, for now, the emergence of 4K televisions – which would magnify all these issues significantly, putting an Apple television into the stratosphere in TV pricing terms).

So why couldn’t Apple do this again in the TV space? To my mind, it comes down to differentiation. The Apple display is differentiated at least in part on the basis of its materials and its look. Arguably, the presence of the Apple logo is also a great signal in a workspace that this is a premium product – for the kinds of creatives who are likely to use these displays, this is an important signal to clients and others about the kind of work they do, and the products they use to get it done. But think about TVs and how they’re evolving. They’re mostly either attached to walls, on stands up against walls, or hidden away in cabinets much of the time. Bezels are shrinking and even disappearing. The prominent logos which once sat under the screen are disappearing with them. To a great extent the television is becoming the purest version of the black rectangle in our increasingly black-rectangle-filled lives. How would Apple differentiate on hardware here? Would it turn back the clock and increase the size of the bezel? Would people even notice if the tiny bezel were made of aluminum instead of black plastic? Would they care? Differentiation in TV hardware today is primarily about making everything but the screen disappear, and this seems totally at odds with Apple’s hardware differentiation.

How, then, to convince customers to part with double or more what they’d pay for an equivalent TV from competitors when the differentiation in hardware will be largely invisible? One option, of course, would be to add additional functionality to the hardware – a camera and microphone for FaceTime calls, for example, with the microphone doubling as an enabler of Siri for the TV. But these things have been tried and failed – FaceTime on personal devices works, but no-one has ever been able to convince families that they should be paying lots of extra money for a TV they can use as a videophone. It appears from Wakabayashi’s piece that Apple did indeed tinker with some of these things, but clearly concluded much the same thing.

Integration vs. a single input

The other way Apple could have differentiated a television is through software, and of course the vast majority of Apple’s products do differentiate through a combination of beautiful hardware tightly coupled with easy-to-use software. So, how would Apple differentiate an Apple TV through software? Well, the problem here isn’t so much that Apple couldn’t do this, but that if all the differentiation is in software, why can’t it be fed to the TV from a companion box like today’s Apple TV? What’s the difference, ultimately, between software baked into a TV and software baked into a box which directly connects to the TV? The challenge with companion boxes and traditional pay TV set top boxes today is that you often need more than one of them to meet your needs. TVs (and accessories such as receivers) come with more and more HDMI ports to cater to the range of devices the average individual or family wants to connect to them: pay TV set top box, Blu-Ray player, game console, a streaming box or stick, and so on. In such a world, it’s easy to imagine an Apple television providing a better way to manage all these inputs in a way a companion box simply can’t solve.

But what if Apple’s vision for the TV space involves more than just being another input plugged into another HDMI port? What if Apple’s plan is to take over the HDMI1 slot and convince you to dump all the other boxes you have historically plugged into your TV? To be clear, this is exactly the strategy I expect Apple to pursue with a revised Apple TV box and the Apple TV service. Under this scenario, input-switching goes away as a problem, and there’s very little meaningful difference between an Apple television and a generic third-party television fed by an upgraded Apple TV box. The only real differences are the need for two remotes and the lack of any audio integration with the TV hardware for Siri and other related functions. Both problems could easily be solved with the use of a better remote for the Apple TV, acting as both a universal remote and as an audio input device (much as Amazon’s Fire TV remote does).

The addressable market

The third reason why an Apple television makes far less sense than an upgraded Apple TV box is the addressable market. Were Apple to sell TVs, it could only target those willing to swap out whatever television they have for a new one, and at a significantly higher price than they’re used to paying. However, an Apple TV box, at a fraction of the price, has a significantly lower ASP but a vastly bigger addressable market – anyone who has any HD TV today and sees the value in adding an Apple experience. Now think about the potential revenue stream from an Apple TV service tightly bundled into the Apple TV box, and suddenly the overall addressable market and the associated revenue becomes significantly larger for this combination than for a television set. Factor in refresh cycles for televisions and the effect is magnified still further – a single purchase every 5-10 years versus more frequent upgrades on hardware and monthly recurring revenue from TV services becomes a no-brainer.

The counter-argument

Having spent most of this post talking about why a television doesn’t make sense, I’d like to briefly review a few reasons why it might, despite all these objections:

  • Control and integration: Apple’s standard model for product development is to approach hardware and software hand-in-hand, and create complete, end-to-end experiences. The current Apple TV flies in the face of this model, because it sits in the background behind a TV built and branded by someone else. An Apple television would be much more along familiar lines, tightly integrating hardware, software, and services, and creating an end-to-end Apple product.
  • Feeding the base: the reality is that many of Apple’s most ardent customers, who likely view Samsung as an inferior brand, nonetheless have Samsung TVs in their living rooms. For those used to buying high-end, well-designed hardware that works together seamlessly, having a relatively inferior product as one of the most visible pieces of consumer electronics in their homes may be irksome. Feeding the Apple base by providing them with an Apple product for this prominent piece of hardware must be tempting. There are no doubt those who would pay the massive premium to have an Apple television set, even if the total number is small.
  • Shutting out others: as long as Apple only makes a companion box, its role is essentially the same as other boxes plugged into the TV, and it has no control or leverage over them. With both the pay TV set top box and the television itself getting smarter and incorporating more functions, there’s a risk that the Apple TV slowly gets pushed out. But turn the model on its head, with Apple making a television, and suddenly Apple is the one calling the shots. It could gain huge leverage over the pay TV providers and how their content shows up on the television, for example.
  • Visible differentiation: one of the interesting things about the Apple TV is that it’s the only one among Apple’s product line today that’s made substantially out of black plastic rather than its usual premium materials. The reason for this is simple: it’s far cheaper, and the device in many cases will be hidden away in a closet or TV cabinet, especially when not in use. A television set, however, would allow Apple to be far more visible in the living room.

I don’t think any of these today come close to overcoming the objections I outlined above, but I can see why Apple at least wanted to explore the category for these reasons and others. Over time, it’s possible that the relative dynamics I’ve outlined above could shift such that the reasons for making a television start to overpower those for holding back. But for now I’m confident Apple has made the right decision.

Apple, Apple Watch, Notifications, Reviews, Smartwatches

A week with the Apple Watch

2 Comments

I’ve now spent a week with a couple of Apple Watches. The first of my pre-orders to arrive was the one I ordered with my wife in mind, a 38mm Sport with a white sport band, which arrived on the 24th itself. The one I ordered for myself arrived this week, and that’s a 42mm Watch with stainless steel case and black sport band. I’ve worn that for the past two days, but wore the other for several days first. I don’t normally do reviews here, and goodness knows there are plenty out there from people who do, so this isn’t a review in the “should you buy it?” sense, but rather a set of observations from my use of the Watch.

This is going to be a significantly longer post than I’m used to writing here, so bear with me, and feel free to skim through using the headings as a guide to what’s in each section. Continue reading →

Apple, Earnings, Q1 2015

Thoughts on Apple’s Q1 2015 earnings

Apple’s earnings came out today, and as ever the total revenue, profit, and iPhone shipment numbers, as well as Apple’s enormous and growing pile of cash were major focus areas for people covering the company. However, I always like to look under the hood a little at some other numbers others might not be so focused on. So here, in no particular order, are a few of those second-tier numbers you might not have seen reported on elsewhere.

One quick note: here, as in all my analysis, I use calendar quarters rather than an individual company’s fiscal calendar in my charts and comments, so bear in mind that in what follows I’m talking about the first calendar quarter of 2015 when I say Q1 2015, and so on.

iPhone average selling prices

iPhone average selling prices have largely moved in one direction over the last several years, as Apple has kept older iPhones on the market longer: downwards. However, what we started to see last quarter was a reversal of this trend, and it continued this quarter. This chart shows a separate line for each year for the last five calendar years, which allows you to see how things have changed over time more easily, given the cyclical nature of this business:
Screenshot 2015-04-27 14.40.17 Continue reading →

Adoption, Android, Android versions, Apple, Google, iOS, iOS 8, Smartphones

Contrasting iOS and Android adoption patterns

10 Comments

I’ve done two previous posts (here and here) on Google’s Android developer dashboard stats, and I was surprised to find it’s been just over a year since my last one. I may still do a deeper dive revisiting some of the points from those previous posts, but this time around I wanted to do something different – contrast Android and iOS adoption patterns. Google has published data on Android version adoption for quite some time now, but Apple’s only been doing it for the last couple of years, so we have less data. But we still have enough from both platforms that we can draw some interesting conclusions.

iOS adoption – huge initial ramp plus slow conversion

The pattern for iOS adoption is very clear – a massive initial ramp in adoption in the first few days and weeks, followed by a steady conversion over time. The chart below shows the share of the base on each version in the first 24 months from launch:

iOS adoptionAs you can see, by the time the first month is over, more than 50% of the base is already on the new version, and it ramps to around 90-95% by a year later, just before the next version launches. At that point, it immediately drops to 25-30% as the new version takes over, and slowly dwindles from there down to under 10% after two years. There are differences in adoption rates for the various versions shown – as has been reported, iOS 8 has seen a slower initial adoption rate than iOS 7, though it’s now over 75%. Correspondingly, the share of iOS 7 has fallen slightly more slowly than iOS 6 did, though the gap in both cases has closed a bit recently. Continue reading →

Apple, Apple Watch, Reviews, Smartwatches

What to look for in the Apple Watch reviews

With the Apple Watch becoming available for pre-order on Friday, it’s likely that we’ll see reviews of the device from a handful of people who’ve been given early access to the Watch at some point this week. I am not among them, but I wanted to share what I’m looking out for in these reviews when they do land, and which I think will make a big difference in how the Watch sells.

Notifications

I wrote a piece about Apple Watch and notifications a few weeks ago, and I think how the Watch handles notifications is critical, both because I think it’s an essential part of Apple’s position around intimate computing, but also because other smartwatches have handled notifications so badly. There are two ways to solve this notification problem:

  • Pass fewer notifications to the wrist – i.e., allow users to filter those notifications they want to receive on their Watch compared with their phone, either by app or ideally even more granularly
  • Deal with notifications better – allow users to manage these notifications more effectively when they do arrive. For example, notifications might arrive more discreetly, the user can dismiss them more easily, and/or the user can act on them effectively on the device. There are early indications that the Watch checks at least two of these boxes.

Battery life

I was tempted to put this first, because I think battery life on the Watch could put a huge damper on the success of the device if it’s not adequate. Given the reports we saw earlier this year, and Apple’s own public statements at the recent event about battery life, it’s still somewhat up in the air whether the broader group of users who now have their hands on the device will find it adequate. It’s clear it won’t last more than a single day for most users, but the question is whether it can effectively get through a whole day, especially for users with lots of notifications and other usage on the device. Related to all this is the experience of having to remove the Watch for charging nightly – does this end up being annoying, or is it something the user quickly gets used to?

Complexity / richness

These are two sides of the same coin. Following the Spring Forward event, a number of reporters worried that the Apple Watch was overly complex. That wasn’t my own experience, but I do think that the Apple Watch does far more at inception than the iPhone did, because it’s launching into a very different world. That could come across in two ways, however: as complexity, or simply as a rich experience. Complexity would manifest itself in user confusion, frustration, a sense of not being able to get things done. Richness would manifest itself in a sense of ease of use paired with a sense that there’s more to be discovered – in other words, the basic experiences work well and intuitively, but there’s more to the device than just those. It’s a tricky balance to strike, and so I’ll be looking out for how the early reviewers evaluate the Watch’s performance on this axis. The how-to videos on Apple’s Watch site suggest that there is a learning curve, but none of the interactions there look overly complex.

New interaction models

Closely tied to that, but also broader, is the introduction of new interaction models, both between the user and the Watch and between users wearing the Watch. The Digital Crown, Force Touch, and Digital Touch are all new on the Watch, and they need to work really well for users to embrace them and for interaction with the Watch to be both pleasant and engaging. But Force Touch is particularly interesting because it’s the only one of these three that’s likely to have applicability beyond the Watch. The new MacBook has a new touchpad which uses a similar concept and haptic feedback to simulate a click, which I found amazingly convincing. But there are also rumors (including new ones today) about future iPhones incorporating similar technology. If Force Touch works well on the Watch, it could be critical to future interactions on the iPhone and iPad as well, so it’s important that it works well.

Third-party Apps

It seems like every time I update my iPhone apps recently there’s a new update for an app that I use which adds Apple Watch compatibility. That’s a good sign, and suggests that there should be a pretty robust group of third-party apps available for the Watch both while reviews are happening and especially at launch. But it’s impossible for me to judge whether any of these apps are any good, and whether they add significantly to the experience I already enjoy with these apps on my phone. I’m curious to see whether there are enough of these apps, and whether they’re good enough to really give reviewers a sense of how much value they’ll add to the Watch. I think third-party apps will be a big part of what makes the Watch compelling, just as they have been for the iPhone and iPad, and so this is another key thing to look out for.

When the novelty wears off

The hardest thing for reviewers to gauge will likely be one of the most important factors in its ultimate success or failure – whether the Watch is compelling enough as an addition to the iPhone that its appeal lasts beyond the initial period when the novelty wears off. I don’t know how long reviewers will have had the Watch by the time they do their reviews, but it may well not be long enough to draw a conclusion on this. The Watch, like the iPad, lacks a single compelling selling point. Rather, I think each user will have to discover their own reasons why wearing one makes sense. I believe that the Watch’s success in the first year will depend heavily on the experience early adopters have with it, and how they communicate about this experience with their friends and family. If they find it compelling, they’ll be able to articulate the value proposition far better (and more convincingly) than any Apple ad or store associate could. And that will be key to Apple’s ability to go beyond the early adopters into the mainstream base of iPhone users.