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Steve Jobs, Gil Amelio’s advisor

Doing some research for a MacUser piece, I came across this from a Peter Burrows piece, writing for BusinessWeek in 1997, just after NeXT concluded the deal to take over Apple:

“After years of trying to take NeXT public, [Jobs will] get some $175 million in cash and stock for his 45%-plus stake. And other than a part-time consulting role–he'll even have an office at his old haunt–he's free to focus on Pixar Animation Studios and other interests. ''I'll advise Gil [Amelio] as much as I can, until I think they don't want my help or I decide they're not listening,'' he says.”

It really didn't quite work out that way – and I'm glad it didn't.

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Poor old David Carnoy. You write a post about a conversation between you and your brother in law Ken where you talk about Apple’s need to get a netbook, and you end up in Internet pundit infamy.

Let’s take a look at the “conversation”, piece by piece.

“Ken: “Apple really needs to do a Netbook.”
Me: “Yes, now. It’s the biggest growth category in laptops. They’re missing out on a big opportunity to take Windows’ share away.”

Mistake number one: A focus on market share. Even in 2009, it was obvious this wasn’t Apple’s focus . In its lean years, the company had learned that you could survive happily on market share of a single digit, and that what was important was simply profit. If you were profitable, you lived. If you weren’t, it didn’t matter how much share you had.

Ken: “Apple keeps saying it doesn’t want to go near the low-end and make crappy notebooks with low margins. Would tarnish the brand, hurt the bottom line.”
Me: “They’re lying. They know they have to go there.”

Mistake number two: Thinking Apple will make crappy products to grab share. Apple’s made its fair share of duffers over the years, but since the end of the Amelio era they’ve tended to be few and far between – and I can’t think of a single example where the product has been crap because Apple has tried to create something cheap with a low margin. Apple just doesn’t do that anymore. Instead, the company focuses on building the best things it can, and if it can’t make something “good enough” at a specific price point, it just doesn’t enter that part of the market.

The best example of this is the way Apple introduced new variants of the iPod. The original iPod was expensive, by the MP3 player standards of the day, but was also significantly better than anything else on the market. When the company extended the range and hit lower price points, it didn’t do so with something crap: the iPod mini was a better iPod, and cheaper. The iPod nano was much higher quality than its competitors. None of the iPods ever felt like “me too” products. None of them ever felt cheap. And none of them were crappy products with low margins.

Ken: “Agree.”
Me: “So they slap a little design flair on the thing, put one model out for $599 and another for $699. Sure, the Windows version would cost you $350-$450, but I’d have no problem paying the Apple premium on one of these.”

Mistake Number Three: Thinking design is something you “slap on”. There’s a phrase for this view of design: “putting lipstick on a pig”. It’s not what Apple does – or at least, it’s not what the Apple of 2014 does. It used to be what it did, back in the early 1990’s, and it’s one of the things which almost killed it. The likelihood of Apple starting to just put lipstick on pigs again is about the same as pigs growing wings and flying.

Ken: “A lot of people would pay $599 for an Apple Netbook.”
Me: “No one’s buying the Macbook Air at $1,800.”
Ken: “I wouldn’t say no one.”
Me: “OK, but it’s sort of the Apple TV of laptops. It’s just not that relevant. Most people would prefer buying a more powerful notebook that weighs a little more for a grand.”
Ken: “I agree. I almost bought an Air when it first came out, but I’m glad I didn’t pull the trigger.” [Note: Ken uses a MacBook Pro but he wants a Netbook for nonbusiness travel].

Mistake Number Four: Failing to understand how Apple pioneers product categories. Sometimes, Apple will produce something which is a little expensive, but which effectively reshapes or creates an entire product category. In the case of the MacBook Air, that category was what we now call ultrabooks: something expensive, high-margin, but thin and light.

Me: “Apple always talks about design–and they do have great designers–but what people want now is cheap. As I said, this thing doesn’t have to be a masterpiece. I’d rather see them keep things simple and elegant and keep the cost down to $599.””

Mistake Number Five: Believing mature markets are solely price-sensitive. Where to go with this one? It’s so obviously false that it almost beggars belief. No matter how tough the market, there’s always someone buying a £50,000 Mercedes rather than a functionally-equivalent £20,000 family car. And there’s always someone who will pay $2000 more to get exactly the model they want, even though it’s functionally the same as the cheaper alternative.

The thing which makes Carnoy’s post brilliant is how it manages to encapsulate every way of misunderstanding what Apple is about, while also misinterpreting the signs of the overall market. It’s not that Carnoy was an idiot – I’m sure he wasn’t, and isn’t – it’s simply that everything in his post illustrates how easy it is to get tech punditry wrong when talking about Apple. This is a company which has grown because it defied expectations, bucked trends, and followed its own path. If you want to write about Apple, this is the first thing you should always bear in mind.

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Oh Samsung

About the rumoured Samsung finger print sensor:

SamMobile claims that as you swipe over the sensor, a “real-time image of your fingerprint” appears on the display. Contrast that to the iPhone 5S, which doesn’t store actual fingerprint images on the device, and you’d think privacy advocates and grandstanding lawmakers would get more riled up with Samsung than they did with Apple. (They probably won’t.)

Oh Samsung.

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John Gruber, on “Ad Age on Apple and Amazon”:

Interesting take on Apple’s advertising initiatives, but it seems like the ad industry just doesn’t get it that Apple cares more about its customers — their experience, their privacy — than the advertisers. I also detect a sense of entitlement — not just that they want this personal information, but that they think they should have it.

Speaking as someone who's been within the ad world, it's not so much that they think they're entitled to it. It's simple that they don't understand why Apple won't give them access to this data at any price.

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A Mac and iPad user’s view of the Surface Pro 2

Back in 2003, the fully-fledged Windows Tablet PC was a pretty amazing machine. You could work on it (I wrote hundreds of thousands of words on my Acer C110, with its 9in screen and tiny keyboard). You could play games on it. You could read on it. You could do everything you could on a laptop and more. It cost more than a normal laptop, and the performance tended to be lacklustre compared to laptops of the same price. But it allowed you to do things no other laptop could do, from note taking using a stylus (with handwriting recognition which put the Newton to shame) to reading nascent ebooks in a much more natural way than on any other device. It was expensive, and clunky, but it worked.

Or at least, it worked for me. Unfortunately, it didn’t work for the rest of humanity, which – despite the constant promotion of the platform by Bill Gates – took one look at Tablet PC, went “huh?” and bought normal laptops instead.

Fast-forward to 2014 and Microsoft is still trying to sell people on the concept of the one-size-fits-all combined Windows PC and tablet. The company is so convinced this is the right way to go that it’s backing its hunch by building its own hardware, the latest of which is the Surface Pro 2.

Microsoft wants you to think of Surface Pro 2 as a “no compromises” PC that’s also a tablet. This is exactly the same line which Gates span in 2003, and unfortunately for Microsoft, it looks like being about as successful as marketing spin as it was ten years ago.

I’ve spent the last few weeks using Surface Pro 2 extensively. I’ve taken it on trips, where I might otherwise have taken my iPad. I’ve used it at home, instead of my MacBook Air, for everything from playing games to social media to business with Office. Although I’ve enjoyed the experience in some respects, the compromises Microsoft has been forced to make in creating something which supposed replaces both PC and tablet are probably more than I’m willing to put up with.

By being a tablet, Surface Pro 2 is a compromised PC: compared to laptops with equivalent performance it’s expensive, especially when you factor in buying a keyboard (£100 to you, sir!). It’s high-end ultrabook territory.

Compare it, also, to Apple’s latest iPad. The iPad Air weighs half as much (1lb vs 2lbs), has longer battery life, and will cost you $200 (or $79 if you want cellular networking, something that’s not even an option on Surface Pro 2). And that 64GB Surface Pro 2 will have a lot less space remaining after Windows has eaten into it than you’ll get with the iPad.

So what, exactly, is the point of the Surface Pro 2? [click to continue…]

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The Plus in Google Plus isn’t quite this Plus

John Gruber in “The Plus in Google Plus”:

The conventional wisdom about Google is that they’re selling our privacy to advertisers. That’s no longer a fringe opinion — it’s the consensus. They’re breeding resentment.

The ironic thing is that they're not actually doing this. Google never, ever, gives your data to advertisers – it's way too valuable for that. What it does is give access to audiences, which is a very different thing.

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I have a section in my feeds called “Friends”. This folder includes RSS feeds for virtually all my friend’s personal blogs, and for about a year there’s something interesting about it: there’s virtually nothing new in it.

Oh sure, there are updates. But they’re the virtual equivalent of an alarm set on a phone you no longer use. They’re things like “My tweets for Thursday”, “Links I liked”, and other automatic posts created by other services. They’re the kind of thing which, a few years ago, would have been the filler between interesting comments, essays, and more. Now, they’re all my friends are producing.

Except that they’re not. Some of my friends have moved away from creating things online and sharing them, mostly due to the ever-evolving pressures on their time: increasing families, work that becomes more time consuming. Houses. Even more kids.

But mostly, they’re sharing smaller and smaller snippets, on social networks. Or they’ve abandoned writing on their own blogs in favour of other platforms like Medium.

This makes me a little sad. There’s a lot of friends out there who I initially discovered through their blogging. Back in the late 90’s and early noughties, having a blog was an essential way of expressing yourself and your thoughts. It was also, truth be told, a place to show off a bit.

But there was also a genuinely political element to it, in the sense that for the first time in history, publishing was something anyone could do. You would write, post your pictures, do what the heck you wanted without having to rely on a third party. If you put in the effort, you could own everything bar the connection your server had to the wider Internet. It brought to life the slogan The Well used: “You own your own words”.

All things pass, and it feels like the time of the blog has in some sense passed too. Who has time to write, when you can pump out status updates which let your friends and family know exactly what you’re thinking and doing at any moment? And why bother to think through what you’re going to say and express in in a few hundred words, when really all anyone cares about is the pithy headline, the punchy hook. “This blog is 12 years old. The reason it’s still here will surprise you.”

Keeping writing a blog is hard work, and takes commitment, and it’s very easy to drift out of that commitment. One of the reasons that I decided to start trying to write 500 words a day is because I believed that making this kind of commitment was good for me. But it was also an attempt to avoid pouring too much of a my energy into things like Twitter, Facebook, and other social networks which – while fun, and generally positive – don’t feel like they have the permanence of my own space. This blog is older than Facebook, and I like that.

 

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One of the most consistent questions asked about Apple at the moment is whether it will ever be a “growth” company again. And, of course, the answer you’ll see is usually “no”.

I disagree. There’s nothing in the present state of Apple and its core businesses which indicates it won’t continue to be a growth company. In fact, it has grown all the way through Tim Cook’s leadership.

What it won’t necessarily be is the kind of hyper-growth company it was during the earlier days of the iPhone. But the kind of opportunity which the iPhone represented are rare, and largely driven by factors outside the direct control of the company. The iPhone was launched into a mature mobile phone market, where there was weak competition and the potential for high margins. Apple’s execution was superb, which enabled them to grow massively and quickly, but it took the existence of a particular set of market conditions to allow this execution to work.

I don’t see any potential product categories which would present the same level of hyper-growth opportunity as smartphones did. TV is huge in revenue, but short on margin, and massively complicated. The regular update cycle is too long to support rapid repeat sales if you look at TVs themselves. You can sell a $100 product like the Apple TV, but it’s effectively a peripheral, a value-add to the iTunes/iOS/Mac ecosystem.

Wearable a feels like a big opportunity to me, but as a value-add for iOS devices rather than a standalone. It’s a way of getting iPhone and iPad owners to pay another $100-250 rather than a $20bn business on its own. And with more and more iPhones sold through the Apple Stores, Apple has a clear path to upselling customers with an incredible health-related wearable.

So where could Apple get iPhone-levels of growth? I just don’t see anywhere. To put the size Apple is at into a little context: if Apple somehow magically owned the entire global online ad market in 2016, it would only add another $163bn of revenue: that’s less than the $170bn revenue the company earned in FY 2013.

It seems, then, Apple is doomed to be merely an enormous, vastly profitable player in the biggest technology markets on the planet until whatever the next big wave is comes alone. And when that wave comes along, it will have to completely miss it or fail to execute as brilliant as it did with the iPhone. At that point, yeah, Apple will be doomed. As doomed as, say, IBM. I’m sure Tim Cook will live with that possibility.

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The 500

There are lots of reasons to write.

Sometimes, you write because you have an important point you want to get across. Blogging allowed all of us to do this, to publish our perspective on the world in a way which hasn’t been possible before.

Sometimes you write because you’re responding to someone. Maybe you’re outraged by someone’s simply ridiculous views on the world. Perhaps you’re trying to pick holes in someone else’s argument. Maybe, you’re just practicing the fine art of snark. Lord knows, there’s a worldwide shortage of snark. The snark, after all, is an endangered species.

Sometimes, you write because you think it might be a career, something you can do to earn a living. And there’s no doubt that if you can make a living at it, writing is a fun occupation. I’ve been lucky enough, at various times of my life, to be paid to write.

But there’s another reason to write, and I think for most people it’s the most important reason of all. Writing helps you understand yourself. It forces you to focus your thoughts and move them from the massively-parallel way that your mind works into a kind of linear order. The process of writing something down turns it from a fleeting thought into something much more concrete.

When you write for this reason, it doesn’t really matter if anyone else reads. What matters is that you have written something that’s more than a single thought.

Over the past few years, mostly because of the emergence into my life of services like Twitter and Facebook, I’ve been neglecting writing to any length other than that of a single though. I’ve become good at paring back what I write to just 140 characters, sometimes less (sometimes much less).

But 140 characters leaves no room for nuance, for anything except the most crystal clear of statements. There’s no room for argument (in the positive, rationalist sense) or for anything other than a single thought, a single witticism.

And I think that I’ve begun to feel this a little in the way that I think. My thinking, which used to be all about focus, has felt… fuzzy. Frayed around the edges. Jumping around like the proverbial Mexican jumping bean. Oooh look! Another tweet has arrived! Must… write… pithy… epigram…

So, rather than carry on in the same way, I’m going to try and break a habit to make a habit: and the habit that I want to get into, like MG Siegler, is to write 500 words a day. I’ve no idea what it will be about. Mostly, I’d guess, technology and publishing, the two things that I spend most of my waking hours thinking about. Probably stuff which lies at the intersection between the two. But some days it might be politics, or the attention span of cats, or how incredible the weather is.

Who knows? But it will be no less than 500 words. Sometimes a little more. But never less. And this post needs to be finished, now.

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Felix Salmon on Facebook and content

Felix Salmon, writing about the “Viral Math” which supports sites like Upworthy:

To put it another way: at the moment, Facebook assumes that people click on exactly the material that they want to click on, and that if it serves up a lot of clickbaity curiosity-gap headlines, then it’s giving its users what they want. Whereas in reality, those headlines are annoying. Curiosity-gap headlines are a bit like German sentences: you don’t know what they mean until you get to the end, which means that the only way to find out what your friend is saying is to click on the headline and serve up another pageview to Upworthy. (Or ViralNova, or Distractify, or whomever.) It’s basically a way of hacking real-world friendships for profit, and there’s no way Facebook is going to allow it to continue indefinitely.

I think Felix is underestimating Facebook here. Facebook doesn’t just know what you click on on-site: it’s also tracking what you do once you leave, and storing this data for further use. It’s entirely possible it knows how long you spend on content which you click on; it definitely knows if you quickly bounce back to Facebook. Given this, it’s hard to imagine it won’t factor this into what content it serves up to you, if not now, then in the future.

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