Tuesday, June 11, 2013

Apple's refresh

In a widely anticipated developer conference presentation, Apple Monday announced improvements to its iPhone and Mac operating systems, its smallest laptop and fastest desktop, and a new radio streaming service. Or as the CNN website put it, “Apple refreshes Macs and iOS, unveils iTunes Radio.”

Of greatest personal interest is the MacBook Air, which is just like the old one but nearly twice the battery life (plus a bigger hard disk). Since my 11" Air runs out of battery all the time, that should attract me to it, but I'm going to keep the old one until the 3 year extended warranty expires.

The news reports raised expectations that Apple needed a major announcement to prove that it hadn’t lost its mojo, or as CNN put it, “a gnawing perception that the giant computer company is not as bold or as cool as it was under Steve Jobs, its late CEO and co-founder.” In response, longtime marketing head Phil Schiller said “Can't innovate any more, my ass,” as he unveiled a new, smaller, faster Mac Pro desktop computer (that in the end is still a desktop computer).

Apple also unveiled a new ad campaign, “Designed by Apple,” which reminds me (and apparently others) of “Think Different,” a stalling tactic that Steve Jobs used in 1997 to hold the loyal customers until it could come out with important new products.

As a longtime Mac loyalist and semi-fanboy, this reminds me of the last dark era without Steve Jobs, i.e. the 1990s. There are no major innovations, just incremental improvements — some of which are important improvements.

Here are Apple’s major product intros that (although not the first to market) changed the industry:

  • 1977 Apple II
  • 1984 Mac
  • 1985 LaserWriter and local-area networking
  • 1993 PowerBook
  • 2001 iPod and iTunes
  • 2007 iPhone
  • 2010 iPad
We're not quite overdue, but it seems like something major should be coming out soon.

Note what I didn’t include: OS X, AppleWorks, iLife, dot-Mac, etc. Perhaps I should have included the iTunes Music Store (2003) and App Store (2008), which would have made the recent trend seem even worse.

People think of Apple as a software company: it’s not, it’s a software-enabled hardware company. Its top line is driven by selling boxes through its retail store (and dealers). On pure software (or SaaS or online services) it has two strong rivals, Google and Amazon; on hardware, it faces Samsung, who relies on others for its key mobile software. (Update: somehow I forgot their traditional nemesis, the world’s largest† software company.)

Short of transforming TV, I don’t know what could be next of a comparable magnitude. But then I’ve been wrong before — most notably in not owning shares at any point in the Jobs II era, one of the greatest stock runs in American history.

† Google has now caught Microsoft in market cap (at $239b), but still hasn’t matched its revenues ($50b vs. $74b in 2012)

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