Slashdot Mirror
Apple Used To Be an Inventor. Now It's Mainly a Landlord. (bloomberg.com)
An anonymous reader quotes a report from Bloomberg: For years, analysts and journalists watching Apple have talked up the growing importance of services, as opposed to hardware sales, to the company's top line. But it's only now that Apple's business model truly appears to be shifting toward collecting rent from the company's ecosystem and increasingly relying on gadget sales to perpetuate this rent rather than drive growth. Apple's decision to stop reporting iPhone unit sales underscores the shift. Services have been steadily growing in importance for Apple since 2016, while the share of revenue provided by the flagship gadget, the iPhone, has gone up and down depending on the popularity of different models.
There's a lot of potential for Apple to squeeze a higher rent directly out of its captive user base. Goldman Sachs estimates that only 10 percent of Apple's user base pay for iCloud Storage; in terms of price and service quality, iCloud has been a poor competitor to services provided by Google and some smaller companies such as Dropbox, but that only means Apple can increase revenue from it exponentially if it bothered to compete more aggressively, as it does with another key service, Apple Music. Even that streaming service has relatively low penetration, though, with only about 35 million users last year. Goldman Sachs predicts that number will grow to 83 million by 2020. Goldman's proposal for Apple is to create a services bundle similar to Amazon Prime; for $30 a month or so, subscribers would get access to music, video, 200 GB of storage and phone repair. The investment bank calculates that with just 50 million subscribers, such a bundle could add $18 billion in services revenue in 2019. "Rent extraction from a user base that finds it hard to go away may sound a bit like extortion," Leonid Bershidsky writes in closing. "But it's more honest and upfront than extracting data from users in ways they often don't understand and then making money off the data, as Facebook does. That honesty is in itself a competitive advantage for Apple as it gradually reimagines itself as more of a services company."
The challenge, Bershidsky writes, "is to grow the services offering fast enough to make up for potential iPhone revenue losses; gadget prices cannot keep going up forever without hurting the top line, and in the end, a phone is just a phone. We only need it to gain access to all the nice digital stuff out there."
There's a lot of potential for Apple to squeeze a higher rent directly out of its captive user base. Goldman Sachs estimates that only 10 percent of Apple's user base pay for iCloud Storage; in terms of price and service quality, iCloud has been a poor competitor to services provided by Google and some smaller companies such as Dropbox, but that only means Apple can increase revenue from it exponentially if it bothered to compete more aggressively, as it does with another key service, Apple Music. Even that streaming service has relatively low penetration, though, with only about 35 million users last year. Goldman Sachs predicts that number will grow to 83 million by 2020. Goldman's proposal for Apple is to create a services bundle similar to Amazon Prime; for $30 a month or so, subscribers would get access to music, video, 200 GB of storage and phone repair. The investment bank calculates that with just 50 million subscribers, such a bundle could add $18 billion in services revenue in 2019. "Rent extraction from a user base that finds it hard to go away may sound a bit like extortion," Leonid Bershidsky writes in closing. "But it's more honest and upfront than extracting data from users in ways they often don't understand and then making money off the data, as Facebook does. That honesty is in itself a competitive advantage for Apple as it gradually reimagines itself as more of a services company."
The challenge, Bershidsky writes, "is to grow the services offering fast enough to make up for potential iPhone revenue losses; gadget prices cannot keep going up forever without hurting the top line, and in the end, a phone is just a phone. We only need it to gain access to all the nice digital stuff out there."
Rent seeking is a code-word for a coercive business transaction. I don't think it fits Apple's situation. The smart phone market is pretty well saturated. The only new revenue you can get is through related devices (watches? headphones?) or services.
There are plenty of competitors. If one of them can come up with something substantially better then they could easily crush everyone else in the smartphone market.
My Other Computer Is A Data General Nova III.
Apple spent less r&d in than AMD in the era where Apple was a duopoly in the smartphone and tablet market with Samsung(no chinese companies back then where so huge) than AMD spent in r&d during their bulldozer days.
Apple, aside from the firewire, hasn't invented anything. They repackage, copy-pasta ideas, from others.
https://www.youtube.com/watch?...
I hate fanboys because their fanboy-ism is based upon marketing and ads. I love fanboys who are fanboys for technical reasons.
Let the hate flow, I learnt the "foe" feature here 3 years into this account after an "anti-apple" comment.
Apple is a fashion choice, stop being fashists.
And Microsoft is realizing the same thing. Goods be it phones or OS is subject to too many vagrancies, while services are both higher margin and more consistent. Think of it as betting on the ifs of Vegas, versus the steadiness of bonds.
Shai Schticks:"You don't make peace with friends, you make peace with enemies"
Technological progress in semiconductors has slowed down to a crawl. It's a zombie business model, buy junk from China and sell it with your brand at a markup. But we pretty much have no reason to upgrade anymore. Market growth in smart phones and computers has stalled, even declining.
So, what else can they do? Well, services. Services with monthly payments provide a stream of income, and a big stream if you manage to become the market leader. It takes time to get established though, and there are zero guarantees about success. It's very much random who wins and who loses. So, you leverage EVERYTHING to get subscribers.
Meh, then your definition of "invent" is too strict. True, they didn't invent the home computer. But after a few tries they managed to find a formula that worked and an entire industry was born. They didn't invent the GUI - but they finally innovated a recipe that worked with the Mac and the PC world never looked the same. Then they did it again with the iPod, the iPhone, and the iPad - all categories that technically existed, but sucked. I could write any one of those off as a lucky fluke, but they've done it several times. They've failed several times, too... for instance they got too crazy with the Newton and Palm figured out the formula instead. Even the lightbulb was an iterative design and not something popped into existence by Edison.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
not all times are times of opportunities. This is also not different in sciences or art. after relativity was formulated, a time of consolidation and application followed, the same with many other theories. Our modern time just made us extremely impatient. In all areas, science, art or technology. Look back 20 years and see what happened since. It is enormous. A major breakthrough had been the new smart phone interface paradigms and it was immediately adapted by others. The technology improvement since was incremental which makes it look less dramatic but still milestones. This is similar in physics. Yes, there had not been a major successful revolution for a while similar than general relativity but the progress has been incremental and enormous, we can measure gravitational waves from distant parts of the universe for example. It is human to put achievements down: "Oh, Einstein had been a great inventor when young, later he was not making any progress any more, he was a thud!" Similarly with the title of this slashdot article. One really likes to put achievements down. It makes us (who did not create anything big) feel so much better! There is an other aspect: Apple had to learn the hard way that there is also an art in making innovation to a business success. Your great idea is sometimes immediately (within weeks or months copied almost verbatim: computer or smart phone interfaces for example) or then does not make any impact as it is too far ahead (like the Newton, LISA or NeXT). I have had a NeXT workstation during my school time and it had been a fantastic thing, innovative in many parts, but it did not make money. It was too far ahead. Yes, sometimes you have to build houses, but there are also times, when you have to be a landlord and get the money to feed the folks who built the house! There will be times again for groundbreaking innovations. If we look at the history of technology, sciences or art, major shifts do not happen very often. But this makes them even greater and we should appreciate them more.
Then who is the true Innovators who really invented something?
We keep on saying that we are not innovating, and that companies have lost their way.
But technology has been progressing, we have been getting new things. They are not normally WOW THIS WILL Change my life. But more well this is slightly more convent, and this continues gradually. 20 years ago we had internet video, but it was normally in a 320x200 size, that if buffered would take 5 minutes to download, before it started. If you happened to happen to have such video on a CD you might be able to play it in 640x480 full screen, but it would be very choppy. Watching Ripped TV Shows on PC was poor quality.
Apple is good at taking a technology and making it for the consumer, they do not invent the technology but they implement it in a way that can be useful. Because of Apple I now have a Phone that has a resolution matching if not exceeding modern laptops, Geek Bench scores matching mid/upper tear laptops. video camera(s), GPS, Multi-touch display, counts its steps, knows its location and position..... 20 years ago this was unheard of, the thickness of such phone is thinner then some of the plastic cases.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
All this assumes a level of competence in software and systems, starting from the very top, that Apple has seldom been able to achieve, and is finding it very difficult to do now. You can't wave a magic wand and axiomatically create services people will use, let along pay money for, see Google+ for one of the starkest examples, and that's from a company with a core competency in software and systems.
Let us leave aside the semantics that Apple is mainly an innovator rather than an inventer, as in manically designing something that may functionally already exist, but resulting in a product experience that is *usually* noticeably better and simpler than the existing one.
I do like the idea of an all-encompassing simple subscription for all kinds of entertainment incl. books, a cloud service and some kind of extended warranty. No hassle. I can well imagine google, netflix etc eventually also offering such.
You gain more value than that for your $1000. You also have a new app where you can aim your phone at your head and all your facial gestures are mirrored on it's screen by a cartoon head shaped out of feces.
Apple enhances and adds branding value. They are like the guy who sees a Chevy and adds a new badge and trim to it and sells the public a Buick. Apple definitely sells a Buick-class product.
This seems like nonsense to me. Apple's success has never been due to being an "inventor", and they're not currently "rent seeking". Apple is, and has been, primarily a hardware company. They sell Macs, iPads, iPhones, iPods, watches, and accessories. They sell a lot of them because they have a reputation (whether you think it's earned or not) for making high quality and widely supported products that are easy to use. That's still the case, and Apple is showing no sign of moving away from that.
Are their products inventive? I can see both sides of the debate. Most of their stuff is based off of some technology someone else invented, but on some level you could say that about all technology products. However, MP3 players weren't very popular before iPods. Smart phones weren't relatively unpopular before the iPhone. Tablets weren't selling much until the iPad. Smart phones didn't generally include virtual assistants until Apple introduced Siri. Not many people were wearing smart watches before the Apple Watch. In each case, the product class existed before Apple entered the market, but Apple seemed to introduce the first product in the class that people really wanted, and then a ton of imitating products followed.
None of those products were invented by Apple, but Apple still creates fairly innovative designs that have changed the way people use technology.
Innovators do not invent things. They successfully apply inventions in a product, service or process. The word for inventions is “new”; for innovations it’s “change”.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
For all these reasons, the fact that profits from services will soon be/already are exceeding profits from hardware sales, they should start selling macOS as a stand-alone OS for regular PCs. Simply give a list of supported CPUs/GPUs/chipsets.
That way, it means more people using macOS, more people subscribing to Apple services, more people buying other Apple devices (phones, tablets, watches, set-top boxes, etc).
#DeleteFacebook
This is the new era business model, they don't want people to own anything, but to subscribe to everything they can. Actually it started a long time ago with computer software and the licenses changed so you weren't buying the software you were leasing it. Now music, movies, books, magazines, TV, radio, cars and other goods, they want a guaranteed monthly payment. I've read where grocery stores are looking into a model like this where you pay for base monthly food, then buy extras. Your quality of life will be based on how much a month your can afford and you own nothing physical if life changes your finances. Everyone will be a pawn of the mega corporations.
It's all in perceived value. I would never spend $40k on a car vs $20k on a car. The $40k car is never going to offer double the value of the $20k car for me. I suppose maybe if the $40k did all the driving while the $20k couldn't, then it would have real value.
Apple is the same thing. I can build my own computer for $1k (I've never spent that much on a system, EVER, by the way) or I could go buy from Apple and spend closer to $2k.
Regarding phone technology, I kind of laugh. It wasn't so long ago that Apple added wireless charging to their phone. I've had wireless charging on my last three phones and would never consider buying a phone that didn't have the functionality.
Very few premium products are worth the offer compared to a mid level option that's done just as well. Premium products are more social signaling.
Why is this moderated flamebait? It's a legitimate question.
Design isn't invention; that doesn't mean it isn't valuable, or can't be innovative.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
They turn computers from complicated tools to limited appliances. They care about details and looks over usability, usability over adaptability.
Since 2007, as a species we have been playing with slightly improved versions of stuff invented in the 1970s. Our actual innovation has stagnated, and the result is that we are more focused on entertainment products than anything with long-term potential. Signs of the decline.
Alternative Right.
You have to payyyyyyy.
Dialectician. Archology.
Apple is trying to keep their customer relationship to itself. The other FAANGs are happy to bring third parties into the business/customer relationship (ie advertisers and resellers) because it is a way to get quick growth and allows for singular focus. I also think that the current CEO probably puts a very high premium on privacy for some very personal reasons, and that alone is a good reason to consider paying Apple instead of going the free route.
Everyone here knows the saying "if you aren't paying for the product, you are the product," which becomes more relevant every day. Advertising tech continues to intrude into our personal lives in an attempt to figure out what we want (ironically many of us just want to be left alone). And the ad buyers want to know that their ads are reaching the intended audience so even more intrusive technology is introduced to provide feedback. Of course if these companies were a little more transparent in disclosing the intrusions perhaps we'd be less paranoid about its use. And once you allow someone to interrupt, the experience is changed forever and beyond your control, much like watching a movie on USA network vs in the theater vs on Netflix.
Apple puts money into customer service (even if you think they don't do a good job, the Apple store experience is still far superior to the old guard electronics stores, especially when there's a device failure). Google doesn't even have any customer facing email address (even if you're an advertiser or use adsense in your content). They depend entirely on third parties/partners like wireless carriers and department stores for providing the "customer experience," which is a mixed bag at best. This is of course the same model Microsoft used forever, and even though their reputation has improved in recent years you don't call them for tech support unless you're a fortune 100 company.
So for now I'm willing to pay Apple a subscription fee in exchange for product support and ad-free content. When (not if, because it's still Silicon Valley and growth is everything) they start charging me a monthly fee and inserting advertising (and the related intrusive tech), I'll look elsewhere. And if Mr Cook's replacement doesn't care about privacy then for sure I'll be going back to Linux and doing my own product support.
"Well, good luck finding a judge that doesn't run a bestiality site."
Over my life I've noticed that every sports specialty store gravitates from selling cool hardware to having most of its retail space filled with clothing. The same pattern has been replicated in the internet age too. Geek gear stores grow, expand into new products but the mature end-state is the clothing store.
The reason I think is the product of repeat-sales* volume * margins / up-front-inventory cost is the highest on clothing so once you discover how to include clothing in your store it just takes over like cancer.
Look at REI as great example.
iphones ate apple. And services will eat iphones.
But of course the reason you go to the store and not another clothing store is specialty items that are now set decorations. REI was originally formed to import specialty hardware not made in the USA at cheaper prices than individuals could get it. It still has all the drool worthy gear and expert displays but the prices are barely competitive and when you check out most of the most of the bill is for the clothing you happened to see while you were drooling over the brass candle lantern or the ultra light titanium coke spoon.
So the thing that's truly amazing about an Apple retail store is that it's still all about the hardware. Kinda amazing they do that. it shows you where there heart is and what their connection to the consumer is. Amazon and apple can both sell you music but, for some people at least, the lure is deep love of the fit and finish of the apple crafted gadgets.
So You will know that apple has lost the thread when it starts making most of it's money selling threads. For now, that's not the case.
Now when it comes to payments, pyschology is really important. There's two ways of looking at this that I think matter a lot in intent. One intent is to lure people to pay over time so they don't notice how expensive something is. The flip side of that intent is to allow them to get something now rather than save for it. Saving has the hazard that any accumulation of money becomes a temptation rather than a planned use later. So getting people into a home or a car now gets them something that is less of a waste of money and something they need. conversely 15 easy payments for the latest ginzu knife or thigh-master is just a trick.
For me, I buy ski passes rather than ski tickets. the goal is not to save money it's to not worry about money and enjoy the skiiing. When I have a pass I don't have to ski 9 to 4 to "get my money's worth". I ski 9 to 12 till the powder is all used up then I go home and leave the hard pack for the ticket buyers to suffer on to get their day's money's worth. I probably ski fewer hours in total when I'm buying passes but I sure as heck enjoy it more. The same is true with health insurance. I found that when I had high co-pays and high-deductibles that sometimes I put off seeing the doctor when I knew that was a risk. SO I now buy higher priced plans that lower those. Economically I pay more than if I tuffed out the deductibles.. But psychologically I'm motivated by by health needs not by my marginal costs.
Some drink at the fountain of knowledge. Others just gargle.
There's an expression that says Pioneers get the arrows, settlers get the land. But there's a third layer to this. For there to be Pioneers first there had to be some new invention that let people press farther into unknown regions than they had before.
Apple is both a pioneer and a settler. Their inventive side is less to do with the techical invention but the invention of a use for it.
while people will quibble here's a list of things that apple didn't invent but did arguably pioneer and settle the us of.
Dynamic memory over static memory.
Memory mapped graphics over fixed graphics cards (ironically, in the age of NVIDIA we have reverse this, but it was what let us switch from kludged dumb terminal fixed width text to real graphics in games and fonts.)
software replacing hardware (e.g. soft sectored floppy's, fonts over character generators, software serial over UAARTS, )
small connectors and universal use of Serial ports over parallel ports and single use ports. (apple desktop bus for example)
Postscript printers. (first major adoption was apple).
The mouse and WYSIWIG. (doug englebart showed us this in the mother of all demos).
and so on.
By the way if you have never watched Englebarts Mother of all Demos it's a mind blowing experience. His team basically invented everything computers did for the next 40 years. Only recently have we gone beyond polishing the patterns his team laid out.
But it was apple that pioneered to use cases that Englbart and then Parc never did. Then they settled the land by selling integrated soltuions for those use cases at the right price that individuals could buy them/
Some drink at the fountain of knowledge. Others just gargle.
https://en.wikipedia.org/wiki/...
in 1968, The 90-minute presentation essentially demonstrated almost all the fundamental elements of modern personal computing: windows, hypertext, graphics, efficient navigation and command input, video conferencing, the computer mouse, word processing, dynamic file linking, revision control, and a collaborative real-time editor (collaborative work). it featured video conference, picture-in-a-picture, an early form of windowing, electret head set microphones, the GUI. Engelbart's presentation was the first to publicly demonstrate all of these elements in a single system
Some drink at the fountain of knowledge. Others just gargle.
That's such a load of rubbish. Factually over the decades apple computers have historically had almost twice the longevity in bussiness use than PCs. When it comes to phones, anytime there is explosive growth in technology, a rapid replacement cycle manifests. Phones have the natural problem of 1) getting dropped, 2) batteries wearing out and 3) difficulty upgrading software. Apple actually solved the latter one but by the time your batteries wear out, phones have imporved so much that the newer phones had batteries that lasted longer anyhow. It's only been in the last few years that phones peaked enough that the replacement cycle has lengthened. Were actually starting to see declines in battery life in new models over older models. The point here is that phones that all phones whether they had replacable batteries or not we virtual antiques with in 2 years during the first decades of this millenium. It's not planned obscelecence. It's why would you pay more to get a phone that lasts longer than you'll want it.
need to look out for invocation elsewhere, guess a good time to start an IT startup ;-)
These pop on /. every week. They never say anything new.
Airpods have been copied to death. The Apple Watch is the most successful smart watch out there. Solid seeming rumors point to Apple researching foldable phones, air gesture controls, and AR glasses. But none of these are ever mentioned in these useless articles. All they ever do is bemoan how things "used to be better" under Steve Jobs. At this point any points about what Jobs did better have been made a dozen times over. But no, we need to see this same damned article every week till the end of time.
1. Hire only the best staff. On merit who can do the work they got hired for without needing extra support in the company for years.
2. Have designers in a company who can work on new products that are "new".
3. Have engineers hired on merit who can do the advanced work and testing.
4. Ensure the new products work and make a profit.
5. Test the products to make sure they work in the real world under real conditions.
6. Have testing done and fix problems well before paying consumers find and report the same problems.
7. Always have staff learning new skills and hire new staff on merit to bring in new skills.
Any average company can create a product for existing market conditions. A few brands can take exisiting tech and bring in new advanced features.
A few of the very best brands every generation can create a new market that never existed.
Hire the best staff to ensure a brand can make its own new markets every generation that define the use of tech for that generation.
Its all in having the best staff and best workers. Find the best and support them. People who arrive on time. Who work hard. Who understand new problems and can work on new projects.
Domestic spying is now "Benign Information Gathering"
Each Apple cultist gets a chip implant for the purpose of transferring funds directly from their employer or family to Apple at scheduled times, such as shortly before Apple reporting dates or whatever other times Apple deems to be appropriate, in amounts to be determined by Apple based on sophisticated AI algorithms that take into account the cultist's conditions of employment and those of their immediate family. This is the Apple I-chip.
When all you have is a hammer, every problem starts to look like a thumb.
Tim Cook is the new Ballmer he hasnâ(TM)t brought anything to the table just a long list of underwhelming products
Underwhelming Products?
https://www.macrumors.com/2018...
You can't wave a magic wand and axiomatically create services people will use, let along pay money for, see Google+ for one of the starkest examples
Exactly the example I was thinking of. Rather an amazing pratfall. The issue: Google has no idea what actually motivates people socially because the founders are, let's call it, a couple of social misfits. Apple can trump that, it's a whole company full of social misfits.
When all you have is a hammer, every problem starts to look like a thumb.
What has Apple done lately? Fuck all. Fucked things up. Squeezed their idiot fans harder. Removed the headphone jack.
When all you have is a hammer, every problem starts to look like a thumb.
"Lately"? They've tried pushing into home entertainment. I don't think it's going to work out, but they are still trying. Steve Jobs is gone, and he was at the helm for all of the other stuff and I can't see into the future - so maybe they are done. But I wouldn't put my money on that.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
By that definition, no one has invented anything. Edison just improved the light bulb. Bell just improved the telephone. Why all this energy spent on semantics? Apple had the first mass-market home computer, the first mass-market GUI, the first mass-market MP3 player, the first mass-market smartphone, the first mass-market tablet. You don't like the term "invented"... OK, let's not use that. It's still a very impressive record of whatever-you-want-to-call it.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Here's some homework for you. Read about how China's domestic Android manufacturers are busy sucking the remaining life out of the I-phone market in China.
India's I-phone story is even sadder. The two biggest populations in the world. Then what? Pakistan, another huge one. No growth there for I-phone. Same is true of just about every rapidly growing economy.
When all you have is a hammer, every problem starts to look like a thumb.
Some would call that the difference between invention and innovation.
Even though he was a royal arsehole, few would dispute that Steve Jobs was a visionary. Tim Cook, by contrast, is a by-the-book numbers guy. He is as exciting and inspiring as a smelly gym sock. Even a village idiot could've foreseen the path Apple would take with such a figure at the helm. Is anyone really surprised?
'He who has to break a thing to find out what it is, has left the path of wisdom.' -- Gandalf to Saruman