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Jean-Louis Gassée

Clayton Christensen Becomes His Own Devil’s Advocate

Uncategorized By November 24, 2014 40 Comments


by Jean-Louis Gassée

Every generation has its high tech storytellers, pundits who ‘understand’ why products and companies succeed and why they fail. And each next generation tosses out the stories of their elders. Perhaps it’s time to dispense with “Disruption”.

“I’m never wrong.”

Thus spake an East Coast academic, who, in the mid- to late-eighties, parlayed his position into a consulting money pump. He advised — terrorized, actually — big company CEOs with vivid descriptions of their impending failure, and then offered them salvation if they followed his advice. His fee was about $200K per year, per company; he saw no ethical problem in consulting for competing organizations.

The guru and I got into a heated argument while walking around the pool at one of Apple’s regular off-sites. When I disagreed with one of his wild fantasies, his retort never varied: I’m never wrong.

Had I been back in France, I would have told him, in unambiguous and colorful words, what I really thought, but I had acclimated myself to the polite, passive-aggressive California culture and used therapy-speak to “share my feelings of discomfort and puzzlement” at his Never Wrong posture. “I’ve always been proved right… sometimes it simply takes longer than expected”, was his comeback. The integrity of his vision wasn’t to be questioned, even if reality occasionally missed its deadline.

When I had entered the tech business a decade and a half earlier, I marveled at the prophets who could part the sea of facts and reveal the True Way. Then came my brief adventures with the BCG-advised diversification of Exxon into the computer industry.

Preying on the fear of The End of Oil in the late-seventies, consultants from the prestigious Boston company hypnotized company executives with their chant: Information Is The Oil of The 21st Century. Four billion dollars later (a lot of money at the time), Exxon finally recognized the cultural mismatch of the venture and returned to the well-oiled habits of its hearts and minds.

It was simply a matter of time, but the BCG was ultimately proved right — we now have our new Robber Barons of zeroes and ones. But they were wrong about something even more fundamental but slippery, something they couldn’t divine from their acetate foils: culture.

A little later, we had In Search of Excellence, the 1982 best-seller that turned into a cult. Tom Peters, the more exuberant of the book’s two authors, was a constant on pledge-drive public TV. As I watched him one Sunday morning with the sound off, his sweaty fervor and cutting gestures reminded me of the Bible-thumping preacher, Jimmy “I Sinned Against You” Swaggart. (These were my early days in California; I flipped through a lot of TV channels before Sunday breakfast, dazzled by the excess.)

Within a couple of years, several of the book’s exemplary companies — NCR, Wang, Xerox — weren’t doing so well. Peters’ visibility led to noisy accusations and equally loud denials of faking the data, or at least of carefully picking particulars.

These false prophets commit abuses under the color of authority. They want us to respect their craft as a form of science, when what they’re really doing is what Neil Postman, one of my favorite curmudgeons, views as simple storytelling: They felicitously arrange the facts in order to soothe anxiety in the face of a confusing if not revolting reality. (Two enjoyable and enlightening Postman books: Conscientious Objections, a series of accessible essays, and Amusing Ourselves To Death, heavier, very serious fare.)

A more recent and widely celebrated case of storytelling in a scientist’s lab coat is Clayton Christensen’s theory of disruptive innovation. In order to succeed these days — and, especially, to pique an investor’s interest — a new venture must be disruptive, with extra credit if the disrupter has attended the Disrupt conference and bears a Renommierschmiss from the Startup Battlefield.

(Credit: )

Christensen’s body of work is (mostly) complex, sober, and nuanced storytelling that’s ill-served by the overly-simple and bellicose Disruption! battle cry. Nonetheless, I’ll do my share and provide my own tech world simplification: The incumbency of your established company is forever threatened by lower cost versions of the products and services you provide. To avoid impending doom, you must enrich your offering and engorge your price tag. As you abandon the low end, the interloper gains business, muscles up, and chases you farther up the price ladder. Some day — and it’s simply a matter of time — the disruptor will displace you.

According to Christensen, real examples abound. The archetypes, in the tech world, are the evolution of the disk drive, and the disruptive ascension from mainframe to minicomputer to PC – and today’s SDN (Software Defined Networking) entrants.

But recently, skeptical voices have disrupted the Disruption business.

Ben Thompson (@monkbent) wrote a learned paper that explains What Clayton Christensen Got Wrong. In essence, Ben says, disruption theory is an elegant explanation of situations where the customer is a business that’s focused on cost. If the customer is a consumer, price is often trumped by the ineffable values (ease-of-use, primarily) that can only be experienced, that can’t be described in a dry bullet list of features.

More broadly, Christensen came under attack by Jill Lepore, the New Yorker staff writer who, like Christensen, is a Harvard academic. In a piece titled The Disruption Machine, What the gospel of innovation gets wrong, Lepore asserts her credentials as a techie and then proceeds to point out numerous examples where Christensen’s vaunted storytelling is at odds with facts [emphasis and edits mine]:

“In fact, Seagate Technology was not felled by disruption. Between 1989 and 1990, its sales doubled, reaching $2.4 billion, “more than all of its U.S. competitors combined,” according to an industry report. In 1997, the year Christensen published ‘The Innovator’s Dilemma,”’Seagate was the largest company in the disk-drive industry, reporting revenues of nine billion dollars. Last year, Seagate shipped its two-billionth disk drive. Most of the entrant firms celebrated by Christensen as triumphant disrupters, on the other hand, no longer exist

Between 1982 and 1984, Micropolis made the disruptive leap from eight-inch to 5.25-inch drives through what Christensen credits as the ‘Herculean managerial effort’ of its C.E.O., Stuart Mahon. But, shortly thereafter, Micropolis, unable to compete with companies like Seagate, failed. 

MiniScribe, founded in 1980, started out selling 5.25-inch drives and saw quick success. ‘That was MiniScribe’s hour of glory,’ the company’s founder later said. ‘We had our hour of infamy shortly after that.’ In 1989, MiniScribe was investigated for fraud and soon collapsed; a report charged that the company’s practices included fabricated financial reports and ‘shipping bricks and scrap parts disguised as disk drives.’”

Echoes of the companies that Tom Peters celebrated when he went searching for excellence.

Christensen is admired for his towering intellect and also for his courage facing health challenges — one of my children has witnessed both and can vouch for the scholar’s inspiring presence. Unfortunately, his reaction to Lepore’s criticism was less admirable. In a BusinessWeek interview Christensen sounds miffed and entitled:

“I hope you can understand why I am mad that a woman of her stature could perform such a criminal act of dishonesty—at Harvard, of all places.”

At Harvard, of all places. Hmmm…

In another attempt to disprove Jill Lepore’s disproof, a San Francisco- based investment banker wrote a scholarly rearrangement of Disruption epicycles. In his TechCrunch post, the gentleman glows with confidence in his use of the theory to predict venture investment successes and failures:

“Adding all survival and failure predictions together, the total gross accuracy was 84 percent.”


“In each case, the predictions have sustained 99 percent levels of statistical confidence without a flinch.”

Why the venture industry hasn’t embraced the model, and why the individual hasn’t become richer than Warren Buffet as a result of the unflinching accuracy remains a story to be told.

Back to the Disruption sage, he didn’t help his case when, as soon as the iPhone came out, he predicted Apple’s new device was vulnerable to disruption:

“The iPhone is a sustaining technology relative to Nokia. In other words, Apple is leaping ahead on the sustaining curve [by building a better phone]. But the prediction of the theory would be that Apple won’t succeed with the iPhone. They’ve launched an innovation that the existing players in the industry are heavily motivated to beat: It’s not [truly] disruptive. History speaks pretty loudly on that, that the probability of success is going to be limited.”

Not truly disruptive? Five years later, in 2012, Christensen had an opportunity to let “disruptive facts” enter his thinking. But no, he stuck to his contention that Modularity always defeats integration:

“I worry that modularity will do its work on Apple.”

In 2013, Ben Thompson, in his already quoted piece, called Christensen out for sticking to his theory:

“[…] the theory of low-end disruption is fundamentally flawed. And Christensen is going to go 0 for 3.”

Perhaps, like our poolside guru, Christensen believes he’s always right…but, on rare occasions, he’s simply wrong on the timing.

Apple will, of course, eventually meet its maker, whether through some far off, prolonged mediocrity, or by a swift, regrettable decision. But such predictions are useless, they’re storytelling – and a bad, facile kind at that. What would be really interesting and courageous would be a detailed scenario of Apple’s failure, complete with a calendar of main steps towards the preordained ending. No more Wrong on the Timing excuses.

A more interesting turn for a man of Christensen’s intellect and reach inside academia would be to become his own Devil’s Advocate. Good lawyers pride themselves in researching their cases so well they could plead either side. Perhaps Clayton Christensen could explain, with his usual authority, how the iPhone defines a new theory of innovation. Or why the Macintosh has prospered and ended up disrupting the PC business by sucking up half of the segment profits. He could then draw comparisons to other premium goods that are happily chosen by consumers, from cars to clothes and…watches.


Payment Systems Adventures – Part II: Counting Friends And Foes

business models By November 17, 2014 Tags: , 14 Comments


by Jean-Louis Gassée

It’s still too early to tell if Apple Pay will square the circle and emerge as a payment system that’s more secure, more convenient, and is widely accepted. MCX, a competing solution that faces more challenges than Apple Pay, helps shed light on the problem.

Apple Pay was announced on September 9th with the new iPhone 6, and rolled out on October 20th.

Where it works, it works well. The roster of banks and merchants that accept Apple’s new payment system is impressive, with big names such as Visa, American Express, Bank of America, Macy’s, Walgreens, and Whole Foods.

But it doesn’t work everywhere.

At launch, Apple Pay covered just a corner of the territory blanketed by today’s debit and credit cards. Then we had a real surprise. Within 24 hours of the roll-out, a handful of merchants, notably CVS, Rite-Aid, Target, and Wal-Mart, pulled the plug on Apple Pay. Apparently, these retailers suddenly remembered they had signed an exclusive agreement with Merchant Customer Exchange (MCX), a consortium of merchants that’s developing a competing payment system and mobile app called CurrentC. How a company as well-managed as CVS could have “forgotten” about its contract with MCX, and what the threatened consequences were for this lapse of memory aren’t known…yet.

We could wade through the professions of good faith and sworn allegiance (“We are committed to offering convenient, reliable, and secure payment methods that meet the needs of our customers”, says Rite Aid PR flack Ashley Flower), but perhaps we’re better off just listing MCX’s Friends and Foes.

Let’s start with the Foes: MCX hates credit cards. As Ron Shevlin of Snarketing 2.0 reports, the hatred isn’t even veiled:

“At last year’s BAI Retail Delivery conference…I asked Mr. Scott [Lee Scott, former Wal-Mart CEO] why, in the face of so many failed consortia before it, would MCX succeed? He said: ‘I don’t know that it will, and I don’t care. As long as Visa suffers.’”

This open animosity is understandable. When we look at Wal-Mart’s latest financials, we see that the company’s net income is 3.1% of sales. A typical Visa transaction costs them 1.51% of the amount that was charged. (See Credit Card Processing Fees & Rates for mind-numbing esoterica.)

For Wal-Mart and other big merchants, this 1.51% “donation” cuts too close to the bone, which is why they banded together to form the MCX consortium.

So we know who MCX’s Foes are…but does it have any Friends?

Not really. Counting the MCX merchants themselves as Friends is a bit of a circular argument — no sin there, it’s business — but it doesn’t build a compelling case for the platform.

What about consumers?

On paper, the MCX idea is simple: You download the CurrentC app onto your mobile phone and connect it to a bank account (ABA routing and account number). When it comes time to pay for a purchase, CurrentC displays a QR code that you present to the cashier. The code is scanned, there’s a bit of network chatter, and money is pumped directly out of your bank account.

Set-up details are still a bit sketchy. For example, the CurrentC trial run required the customer’s social security and driver’s license numbers in addition to the bank info. MCX says it doesn’t “expect” to have these additional requirements when CurrentC launches in early 2015, but I’m not sure that it matters. The requirement that the customer supply full banking details and then watch as money is siphoned off without delay is essentially no different from a debit card — but with a middle man inserted into the process. And while debit card use surpassed credit cards as far back as 2007, US shoppers are loathe to leave the warm embrace of their credits cards when it comes to big ticket purchases (average debit card charge in 2012: $37; credit card: $97; see here for yet more estorica).

What does MCX and CurrentC offer that would entice consumers to abandon their credit and debit cards and give merchants direct access to their bank accounts? The consortium can’t offer much in the way of financial incentives, not when the whole point is to remedy Visa’s 1.51% processing fee.

Now let’s look at Apple Pay; first, consumers.

Apple has recognized the strong bond between consumers and their credit cards: The average wallet contains 3.7 cards, with a balance of $7.3K outstanding. Apple Pay doesn’t replace credit cards so much as it makes the relationship more secure and convenient.

Set up is surprisingly error-free — and I’m always expecting bugs (more on that in a future note). The credit card that’s connected to your iTunes account is used by default, all you have to do is launch Passbook and re-enter the CVV number on the back. If you want to use a different credit card account, you take a picture of the card and Passbook verifies it with the issuer. Debit cards also work, although you have to call the bank…as in an actual telephone call. In my case, the bank had a dedicated 877 number. Less than 30 seconds later a confirmation appeared on my device.

Paying is simple: Gently tap the phone on a compatible, NFC-enabled point-of-sale terminal and place a registered finger on the TouchID button; the phone logs the transaction in Passbook and then vibrates pleasantly to confirm.


On the security side, Apple Pay doesn’t store your credit card number, neither on your  phone nor on Apple’s servers. Instead, the card is represented by an encrypted token; the most you can ever see are the last four digits of the card — even on an unlocked phone, even when you’re deleting a card from your Passbook.

Simplifying a bit (or a lot), during a transaction this encrypted token is sent through the NFC terminal back to your bank where it’s decrypted. Not even the merchant can see the card.

We can also count the banks and credit card companies as Friends of Apple Pay. For them, nothing much changes. A small fee goes to Apple (0.15%, $1 for every $700). Apple Pay isn’t meant to make money in itself, its goal is to make iDevices more pleasant, more secure.

Banks also like the potential for cutting down on fraud. In 2013, payment card fraud was pegged at $14B globally with half of that in the US. How deeply Apple Pay will cut into this number isn’t known, but the breadth and warmth of Apple Pay adoption by financial institutions speaks for their expectations. Wells Fargo, for example, put up a large billboard over the 101 freeway and promoted the service on social media:

What about merchants? This is a mixed bag; some seem to be fully on board, although, as ever, we mustn’t judge by what they say for the flackery on the left is just as disingenuous as the flackery on the right. Regard the declaration from pro-Apple Pay Walgreens: “Incorporating the latest mobile technology into our business is another way we are offering ultimate convenience for our customers.” Sound familiar?

Others, such as Wal-Mart are resolute Foes. Of the fence sitters, time will tell if they’ll jump into the Apple Pay camp or desert it. It’s still very early.

Questions remain regarding “loyalty” programs, a cynical word if there ever was one when considering the roach motels of frequent flyer miles. A quick look at in-app payments provides a possible answer.

One such example, no surprise, is Apple’s own App Store app where you can pay with Apple Pay after scanning an accessory’s barcode. The app triggers a confirmation email that shows that the merchant, Apple, is aware of the transaction. Other merchants can, and will, build their own apps, but there’s still the question of how a loyalty program will work for point-of-sale transactions where merchants can’t see your data.

In a clumsily worded comparison, MCX CEO Dekkers Davidson tries to imply that his company’s exclusivity requirement is much like AT&T’s arrangement with Apple in the early days of the iPhone, and arrangement that wasn’t permanent and that worked out well for both parties. In the meantime, one can visualize Apple engaging in an encircling action, patiently adding partners and features quarter after quarter.

We’ll know soon if this battle is won before it’s even fought.


Tim Cook Free At Last

Uncategorized By November 2, 2014 Tags: 10 Comments


by Jean-Louis Gassée

Trading one’s privacy for the benefit of others isn’t an easy decision. Tim Cook just made such a swap, and the reverberations are beginning to be heard.

I’m happy and relieved that Tim Cook decided to “come out”, to renounce his cherished privacy and speak of his sexual orientation in plain terms rather than veiled, contorted misdirections. The unsaid is toxic.

If you haven’t done so already, please take the time to read Tim’s I’m Proud to Be Gay Businessweek editorial. Soberly written and discreetly moving, the piece concludes with:

“…I’m doing my part, however small, to help others. We pave the sunlit path toward justice together, brick by brick. This is my brick.”

It’s an admirable cause…but why should I care? Why does this 70-year old French-born American, a happily married-up father of three adult and inexplicably civilized children, care that Cook’s sexuality is now part of the public record?


First, I like and respect Cook for what he does, how he does it, and the way he handles his critics. For the past three years he’s been bombarded by questions about Apple’s slowing growth and the absent Next Big Thing, he’s been criticized for both hastening and impeding the inevitable commoditization of All Things Apple, he’s been called a liar by the NYT. Above all, he’s had to suffer the hidden — and occasionally blatant — accusation: You’re no Steve Jobs.

Throughout it all, Cook has displayed a preternatural calm in refusing to take the bait. In a previous Monday Note, I attributed his ability to deflect the cruel jibes to his having grown up “different” in Alabama. In his editorial, Cook confirms as much:

“It’s been tough and uncomfortable at times… [but] it’s also given me the skin of a rhinoceros, which comes in handy when you’re the CEO of Apple.”

Second, I’ve seen the ravages of homophobia at close range. A salient and personal example is the young gay architect of our first Palo Alto house. He quickly sensed he could be open with us, and would tease my wife Brigitte by showing her pictures of a glorious group of young bucks on vacation in Greece, adding, “What a loss for females”. But he also told us of his shame when he became aware of his desires in his adolescence, that he kneeled down every night to pray that his god would have mercy and make him “normal”. His parents rejected him and refused to keep in touch, even after the HIV virus made him perilously sick.

One morning when we were driving to his place in San Francisco to deliver a painting Brigitte had made for him, his partner called and told us not to come. Our friend had just passed away, still unaccepted by his parents.

Another personal example. A local therapist, a gay Buddhist, told me he couldn’t work as an M.D. in his native Caracas because the oppressive culture wouldn’t allow a gay man to so much as touch another man — even as a doctor. When he decided to tell his parents he was gay, he had to take them to a California mountain and mellow them with a certain herb before they would hear him out, and even then they didn’t entirely embrace his “choice” of sexuality.

Years of conversation with the fellow — who’s exactly my age — in a setting that facilitates honesty have brought empathy and insights that aren’t prevalent or even encouraged in the Parisian culture I come from, even in the supposedly liberated Left Bank that has been the home of lionized gay men such as Yves Saint-Laurent and Karl Lagerfeld. (I recommend Alicia Drake’s The Beautiful Fall. Lagerfeld, Saint Laurent, and Glorious Excess in 1970s Paris, a well-document and beautifully written parallel life history.)

This leads me to my third point, brought up by my wife. Gays have always been accepted in creative milieus. In many fields — fashion, certainly, but even in high tech — it’s almost expected that a “designer” is homosexual. Despite counter examples such as  Christian Lacroix, or our own Sir Jony, the stereotype endures.

According to the stereotype, it’s okay for “artistes” (I’ve learned the proper dismissive pronunciation, an elongated ‘eee’ after the first ’t’) to be unconventional, but serious business people must be straight. When I landed in Cupertino in 1985, I became acquainted with the creative <=> gay knee jerk. True-blue business people who didn’t like Apple took to calling us “fags” because of our “creative excesses” and disregard of the establishment.

What Brigitte likes most about Cook’s coming out is that it portends a liberation of the Creative Ghetto. Cook isn’t just outing himself has a gay executive; he’s declaring that being gay — or “creatively excessive”, or unconventional — is fully appropriate at the very top of American business. It helps, she concludes, that Apple’s CEO has made his statement from a position of strength, at a time when the company’s fortunes have reached a new peak and his leadership is more fully recognized than ever.

The ripples now start. Perhaps they’ll bring retroactive comfort to many execs such as former BP CEO John Browne who, in 2007, left his job in fear of a revelation about his lifestyle – and an affirmation to myriads of “different” people at the bottom of the pyramid.

Tim Cook brings hope of a more accepting world – both inside and outside of business. For this he must be happy, and so am I.

And, while I’m at it, Happy Birthday.


Science Fiction: Apple Makes A Toaster Fridge…

Uncategorized By October 27, 2014 12 Comments


…a supremely elegant one, naturally.

Plummeting iPad sales rekindle fantasies of a hybrid device, a version that adopts PC attributes, something like a better execution of the Microsoft Surface Pro concept. Or not.

For a company that has gained a well-deserved reputation for its genre-shifting — even genre-creating — devices, it might seem odd that these devices evolve relatively slowly, almost reluctantly, after they’ve been introduced.

It took five years for the iPhone to grow from its original 3.5” in 2007, to a doubled 326 ppi on the same screen size for the June 2010 iPhone 4, to a 5” screen for the 2012 iPhone 5.

In the meantime, Samsung’s 5.3” Galaxy Note, released in 2011, was quickly followed by a 5.5” phablet version. Not to be outdone, Sony’s 2013 Xperia Z Ultra reached 6.4” (160 mm). And nothing could match the growth spurt of the long-forgotten (and discontinued) Dell Streak: from 5” in 2010 to 7” a year later.

Moreover, Apple’s leadership has a reputation — again, well-deserved — of being dismissive of the notion that their inspired creations need to evolve. While dealing with the iPhone 4 antenna fracas at a specially convened press event in 2010, a feisty Steve Jobs took the opportunity to ridicule Apple’s Brobdingnagian smarphone rivals, calling them “Hummers”, predicting that no one will buy a phone so big “you can’t get your hand around it”.

A smaller iPad? Nah, you’d have to shave your fingertips. Quoting the Grand Master in October 2010 [emphasis mine]:

“While one could increase the resolution to make up some of the difference, it is meaningless unless your tablet also includes sandpaper, so that the user can sand down their fingers to around one-quarter of their present size. Apple has done expensive user testing on touch interfaces over many years, and we really understand this stuff.

There are clear limits of how close you can place physical elements on a touch screen, before users cannot reliably tap, flick or pinch them. This is one of the key reasons we think the 10-inch screen size is the minimum size required to create great tablet apps.

For his part, Tim Cook has repeatedly used the “toaster-fridge” metaphor to dismiss the idea that the iPad needs a keyboard… and to diss hybrid tablet-PC devices such as Microsoft’s Surface Pro, starting with an April 2012 Earnings Call [emphasis and stitching mine]:

“You can converge a toaster and a refrigerator, but those aren’t going to be pleasing to the user. […] We are not going to that party, but others might from a defensive point of view.”

Recently, however, Apple management has adopted a more nuanced position. In a May 2013 AllThings D interview, Tim Cook cautiously danced around the iPhone screen size topic — although he didn’t waste the opportunity to throw a barb at Samsung [insert and emphasis mine]:

“We haven’t [done a bigger screen] so far, that doesn’t shut off the future. It takes a lot of really detailed work to do a phone right when you do the hardware, the software and services around it. We’ve chosen to put our energy in getting those right and have made the choices in order to do that and we haven’t become defocused working multiple lines.”

Sixteen months later, Apple’s Fall 2014 smartphone line-up sports three screen sizes: the 4” iPhone 5C and 5S , the new 4.7” iPhone 6, and the 5.5” iPhone 6 Plus phablet.

Is this apostasy? Fecklessness?

Remarking on Jobs’ quotable but not-always-lasting pronouncements, Cook gives us this:

“[Jobs] would flip on something so fast that you would forget that he was the one taking the 180 degree polar [opposite] position the day before. I saw it daily. This is a gift, because things do change, and it takes courage to change. It takes courage to say, ‘I was wrong.’ I think he had that.”

That brings us to the future of the iPad. In the same interview (in 2012) Cook expressed high hopes for Apple’s tablet:

“The tablet market is going to be huge… As the ecosystem gets better and better and we continue to double down on making great products, I think the limit here is nowhere in sight.”

Less than two years after the sky-is-the-limit pronouncement, iPad unit sales started to head South and have now plummeted for three quarters in a row (- 2,3%, – 9% and – 13% for the latest period). This isn’t to say that the iPad is losing ground to its competitors, unless you include $50 models. Microsoft just claimed $903M in Surface Pro revenue for the quarter ended last September, which, at $1K per hybrid, would be .9M units, or double that number if the company only sold its $499 year-old model. For reference, 12.3M iPads were sold in the same period (I don’t know any company, other than Apple, that discloses its tablet unit volume).

As Andreessen Horowitz’s Benedict Evans felicitously tweets it: There’re 2 tablet markets: next-gen computing vision, where Apple has 80%, and, bigger but quite separate, the cheap TV/casual games device.”

Still, the concern remains. Does the iPad own 80% of a shrinking market, or can the Cupertino team reboot sales and fulfill Tim Cook’s The Limit Is Nowhere In Sight promise?

What’s missing?

A hint might lie in plain sight at the coffee shop next door. We see laptops, a Kindle reader or two, and iPads – many with an attached keyboard. Toaster-fridges!

But here’s Craig Federighi, Apple’s Sr. VP of Software Engineering, who is fond of dismissing talk of touch-screen Macs:

“We don’t think it’s the right interface, honestly.”

I find Federighi’s remark a bit facile. Yes, touching the screen makes much more ergonomic sense for a tablet than for a laptop, but in view of the turnabouts discussed above, I don’t quite know what to make of the honestly part.

Frederigh may be entombed in the OS X and iOS software caves, but can he honestly ignore the beautiful Apple Wireless Keyboard proposed as an iPad accessory, or the many Logitech, Incase, and Belkin keyboards offered in the company’s on-line store? (Amazon ranks such keyboards between #20 and #30 in their bestsellers lists.) Is he suborning others to commit the crime of toaster-fridging?

In any case, the iPad + keyboard combo is an incomplete solution. It’s not that the device suffers from a lack of apps. Despite its poor curation, the App Store’s 675,000 iPad apps offer productivity, entertainment, education, graphic composition and editing, music creation, story-telling, and many other tools. As Father Horace (Dediu) likes to put it, the iPad can be “hired to do interesting jobs”.

No, what’s missing is that the iOS user interface building blocks are not keyboard-friendly. And when you start to list what needs to be done, such as adding a cursor, the iPad hybrid looks more and more like a Mac…but a Mac with smaller margins. The 128GB iPad plus an Apple Keyboard rings up at $131 less than a 11”, 128GB MacBook Air. (As an added benefit, perhaps the Apple toaster-fridge would come bundled with Gene Munster’s repeatedly predicted TV Set.)

On to better science fiction.

Let’s imagine what might happen next quarter when Intel finally ships the long-promised Broadwell processors. The new chips’ primary selling point is reduced power consumption. The Broadwell probably won’t dislodge ARM SoCs from smartphones, but a reduced appetite for electricity could enable a smaller, slimmer, lighter MacBook Air 2, with or without a double (linear) density Retina display.

Now consider last quarter’s iPad and Mac numbers, compared to the previous year:


Mac units grew 25% year-on-year, while iPads experienced a 7% decrease.

You’re in Apple’s driver seat: Do you try to make the iPad feel more like a Mac despite the risks on many levels (internal engineering, app developers, UI issues), or do you let nature to take its course and let the segment of more demanding users gravitate to the Mac, cannibalizing iPad sales as a result? Put another way, are you willing to risk the satisfaction of users who enjoy “pure tablet” simplicity in order to win over customers who will naturally choose a nimbler Mac?

PS: John Kirk just published a column titled The Apple Mac Takes Its Place In The Post-PC World where he digs up a prophetic Gates quote and explains the rise of the Mac as the weapon of choice for power users.


Apple Watch Is And Isn’t…

Uncategorized, Wearable By September 14, 2014 Tags: , , , , 64 Comments


The Apple Watch isn’t just another iDevice, a “wearables” accessory to the Apple ecosystem. It’s a bold attempt to create a new kind of wrist-worn personal computer that looks like a smartwatch.

In previous Monday Notes dealing with the putative iWatch and other “wearables”, I thought the new product would be a nice add-on to the iDevices ecosystem — a bit player that would make the iPhone more desirable —  but that it wouldn’t move the needle, meaning $10B or more in revenue. I reasoned that a watch battery would be too small to feed a computer powerful enough to offer a wide range of apps and communications capabilities.

I was wrong.

In his demonstration (76 minutes into the official video) at the Cupertino Flint Center last Tuesday, Kevin Lynch, the Adobe defector who now runs the Apple Watch software engineering effort, showed us that the Watch isn’t just a shrunk-down iPhone: It can stand on its own, it has introduced an entire new genre of user interface, and will have its own App Store. The reinterpreted watch crown, a side button, touch and pressure on the face, plus voice all combine to a potentially rich and unique set of ways to interact with this newest very personal computer.

As Horace Dediu, our disruption scholar, puts it:

“The Apple Watch is as much a Watch as the iPhone is a Phone.”

The almost overwhelming richness of the user interface and of demonstrated apps led one twitterer to express a concern I can’t suppress:

Dr. Drang Apple Software Army

Will the software overwhelm the hardware, resulting in problematic battery-life, or befuddle normal humans?

Indeed, I remember how I worried when Steve Jobs first demonstrated the iPhone on January 9th, 2007 and stated it ran OS X. Knowing Jobs’ occasionally robust relationship with facts, I feared embarrassment down the road. But, no. When the iPhone shipped almost six months later, on June 29th, hackers immediately dissected it and discovered it ran a bona fide pared-down version of OS X — later renamed iOS.

As with the original iPhone, we might be six months away from a shipping product, time for Apple to fine-tune its software and work on the S1 SoC (System on a Chip) that drives the watch… and to put in place the supply chain and retail operations for the many Apple Watch variations.

In the meantime, some choice morsels of context will help as we consider the impact of Apple’s new Watch. We’ll start with Marc Newson, the famed designer (and Jony Ive’s friend and collaborator)  who just joined Apple. If you haven’t done so already, take a look at this video where Newson flips through his portfolio of watch and clock designs, including this striking reinterpretation of a great classic, the Atmos Clock from Jaeger-LeCoultre:

Newson Atmos

(The pages that Newson surveys in the video are taken from a book published by Taschen, the noted publisher of lovingly designed art books.)

For more context, follow this link supplied by Kontra (a.k.a. @counternotions) and regard the sea of watch designs from Newson’s Ikepod days, a company Newson left in 2012.

Newson Ikepod Manatee

Turning to the Apple Watch mega-site, we see a family resemblance:

Apple Watches

Professional watchmakers and industry executives seem to appreciate Newson’s influence and Apple’s efforts, although they are quick to point out that they don’t think the Apple Watch is a threat to their high-end wares (“It’s a techno-toy more than a watch, but what a fun toy,” says Laurent Picciotto of Chronopassion Paris).  Watches by SJX provides a quick collation of What The Watch Industry Thinks Of The Apple Watch. Swiss watchmaker Eric Giroud voices the majority opinion:

“It’s a nice product; good shape and amazing bracelet – thank you Marc Newson for the resurrection of the Ikepod strap. It’s difficult to speak about its impact on watchmaking because the Apple Watch is not a watch except that it is also worn on the wrist.”

Benjamin Clymer is the editor of Hodinkee, an on-line magazine dedicated to the world of watches. In a post titled A Watch Guy’s Thoughts On The Apple Watch, Clymer provides a review that’s informed by a deep personal knowledge of the watch scene. If you don’t have time to read the whole article — it’s a long piece — the author provides a good summary in the introduction [emphasis mine]:

[…] though I do not believe it poses any threat to haute horology manufactures, I do think the Apple Watch will be a big problem for low-priced quartz watches, and even some entry-level mechanical watches. In years to come, it could pose a larger threat to higher end brands, too. The reason? Apple got more details right on their watch than the vast majority of Swiss and Asian brands do with similarly priced watches, and those details add up to a really impressive piece of design. It offers so much more functionality than other digitals it’s almost embarrassing. But it’s not perfect, by any means.

Not everyone in the watch industry is so impressed. In an article titled Apple Watch ‘too feminine and looks like it was designed by students’, says LVMH executive, The Telegraph provides the money quote [emphasis mine]:

“To be totally honest, it looks like it was designed by a student in their first trimester,” added Mr Biver, who heads up the brands Tag Heuer, Zenith and Hublot.

The article evoked general hilarity and prompted more than one commenter to dig up the infelicitous Ed Colligan quote about the iPhone:

“PC guys are not going to just figure this out. They’re not going to just walk in.”

I’ll offer a rewrite for Jean-Claude Biver and his haute horlogerie colleagues:

“We like Apple products, they provide productivity and fun in our daily lives; we respect the sense of design Sir Jony and now Marc Newson bring to the company. I wish I could say more but, try as I might, I couldn’t get the livestream of Mr. Cook’s presentation to work in my Rue de Rive office in Geneva. First, there was this Mandarin dubbing, I can understand why but it was really annoying. Then, the transmission kept breaking down. I imagine that the tons of concrete now being poured for Apple’s next headquarters will provide a suitable resting place for the individual in charge.
Again, congratulations on a well-executed global launch.”

More seriously, let’s put streaming glitches glitches aside, they won’t matter in the longer run because they don’t concern the product itself. Last week’s launch, its detailed preparations, including the no-longer mysterious white building, attest to the gravity of Apple’s long-term ambition.

As additional evidence that the Apple Watch isn’t just a hobby, recall that the iPhone was initially offered in one size and one color. By comparison, the Apple Watch is an explosion: It comes in three styles and two sizes (in millimeters, 38 and 42, because that’s the trade vocabulary), two material/finishes for each style (silver and space gray, yellow or rose gold), nine bands for the basic Apple Watch, six for the Apple Watch Sport, and at least four for the gold Apple Watch Edition — and all with matching crown buttons.  Henry Ford has definitely left the building.

The fact that Apple invited fashion editors to Cupertino (some of whom had to be told where that town is) is another Think Different sign. Nerds are still welcome, but this is a new game. Again, turn to the Apple Watch site and look at the bands/bracelets. As Ben Clymer notes in his piece, the level of detail tells us this isn’t just another iDevice.

Stepping back a little, when I see the team of watch industry execs, design luminaries, and fashion experts Apple has brought on board, I have a hard time believing that Apple is going to stop at watches. At the very least, will Mssrs. Ive and Newson bring livelier, more varied designs to the iPhone? And what does Tim Cook mean when he slyly alludes to products that “haven’t even been rumored yet…”?

But let’s not get ahead of ourselves — we’re still barely past the demo. We’ll have to wait for the actual product to come to the wrists of real users. Only then will we have the Apple Watch make-or-break moment: Word-of-mouth from non-experts.

And, still in the not getting ahead of ourselves department, for Apple, today’s make-or-break product is the iPhone 6. The Apple Watch makes great “ink” and iPhones make the money.