About Jean-Louis Gassée

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Minding The (Apple)Store

 

As I’ve written many times in the past, I’m part of the vast chorus that praises the Apple Store. And not just for the uncluttered product displays, the no-pressure sales people (who aren’t on commission), or the Genius Bar that provides expert help, but for the impressive architecture. Apple beautifies existing venues (Regent Street in London, rue Halevy near the Paris Opera) or commissions elegant new buildings, huge ones at times.

It’s a relentlessly successful story. Even the turmoil surrounding John Browett’s abbreviated tenure as head of Apple’s worldwide retail organization hasn’t slowed the pace  of store openings and customer visits. (As always, Horace Dediu provides helpful statistics and analysis in his latest Asymco post.)

It has always struck me as odd that in Palo Alto, Apple’s heartland and Steve Jobs’ adopted hometown, Apple had only a modestly-sized, unremarkable venue on University Avenue, and an even smaller store in the Stanford Shopping Center.

All of that changed on October 27th when the black veil that shrouded an unmarked project was removed, and the newest Apple Store — what some are calling a “prototype” for future venues, a “flagship” store — was revealed. (For the civic-minded — or the insomniac — you can read the painfully detailed proposal, submitted to Palo Alto’s Architectural Review Board nearly three years ago, here.)

I came back from a trip on November 2nd, the day the iPad mini became available, and immediately headed downtown. The new store is big, bold, elegant, even more so at night when the very bright lights and large Apple logo on its front dominate the street scene. (So much so I heard someone venture that Apple has recast itself as the antagonist in its 1984 commercial.)

The store is impressive… but its also unpleasantly, almost unbearably noisy. And mine isn’t a voice in the wilderness. The wife of a friend walked in, spent a few minutes, and vowed to never return for fear of hearing loss. She’d rather go to the cramped but much more hospitable Stanford store.

A few days later, I heard a similar complaint from the spouse of an Apple employee. She used to enjoy accompanying her husband to the old Palo Alto store, but now refuses because of the cacophony.

‘Now you know the real reason for Browett’s firing’, a friend said, half-seriously. ‘How can you spend North of $15M on such a strategically placed, symbolic store, complete with Italian stone hand-picked by Jobs himself…and give no consideration to the acoustics? It’s bad for customers, it’s bad for the staff, it’s bad for business, and it’s bad for the brand. Apple appears to be more concerned with style than with substance!’

Ouch.

The sound problem stems from a combination of the elongated “Great Hall”, parallel walls, and reflective building materials. The visually striking glass roof becomes a veritable parabolic sound mirror. There isn’t a square inch of sound-absorbing material in the entire place.

A week later, I returned to the store armed with the SPL Meter iPhone app. As the name indicates, SPL Meter provides a Sound Pressure Level (SPL) measurement in decibels.(Decibels form a logarithmic scale where a 3 dB increase means roughly twice as much sound pressure — noise in our case; +10 dB is ten times the sound pressure.)

For reference, a normal conversation at 3 feet (1m) is 40 to 60 dB; a passenger car 30 feet away produces levels between 60 and 80 dB. From the Wikipedia article above: “[The] EPA-identified maximum to protect against hearing loss and other disruptive effects from noise, such as sleep disturbance, stress, learning detriment, etc. [is] 70 dB.”

On a relatively quiet Saturday evening, the noise level around the Genius Bar exceeded 75 dB:

Outside, the traffic noise registered a mere 65 dB. It was 10 db noisier inside the store than on always-busy University Avenue!

Even so, the store on that Friday was a virtual library compared to the day the iPad mini was launched, although I can’t quantify my impression: I didn’t have the presence of mind to whip out my iPhone and measure it.

Despite the (less-than-exacting) scientific evidence and the corroborating anecdotes, I began to have my doubts. Was I just “hearing things”? Could Apple really be this tone deaf?

Then I saw it: An SPL recorder — a professional one — perched on a tripod inside the store.

I also noticed two employees wearing omnidirectional sound recorders on their shoulders (thinking they might not like the exposure, I didn’t take their pictures.) Thus, it appears that Apple is taking the problem seriously.

But what can it do?

It’s a safe bet that Apple has already engaged a team of experts, acousticians who tweak the angles and surfaces in concert halls and problem venues. I’ve heard suggestions that Apple should install an Active Noise Control system: Cancel out sound waves by pumping in their inverted forms — all in real time. Unfortunately, this doesn’t work well (or at all) in a large space.

Bose produces a rather effective solution…in the controlled environment of headphones.

This prompted the spouse mentioned above to suggest that Apple should hand out Bose headphones at the door.

Two days after the noisy Apple store opened its doors, Browett was shown the exit. Either Tim Cook is fast on the draw or, more likely, my friend is wrong: Browett’s unceremonious departure had deeper roots, most likely a combination of a cultural mismatch and a misunderstanding of his role. The Browett graft didn’t take on the Apple rootstock, and the newly hired exec couldn’t accept that he was no longer a CEO.

Browett’s can’t be scapegoated for the acoustical nightmare in the new Apple Store. Did the rightly famous architectural firm, Bohlin Cywinski Jackson, not hear the problem? What about the highly reputable building contractor (DPR) which has built so many other Apple Stores? Did they stand by and say nothing, or could they simply not be heard?

Perhaps this was a case of “Launchpad Chicken”, a NASA phrase for a situation where many people see trouble looming but keep quiet and wait for someone else to bear the shame of aborting the launch. It reminds me of the Apple Maps fiasco: An obvious problem ignored.

What a waste spending all that money and raising expectations only to move from a slightly undersized but well-liked store to a bigger, noisier, colder environment that turns friends away.

Having tacitly admitted that there’s a problem, Apple’s senior management can now show they’ll stop at nothing to make the new store as inviting as it was intended to be.

JLG@mondaynote.com

Tablets Trade-Offs And Compromises

 

A couple of hours after landing in SFO from Paris, I find myself setting up two new tablets: a Microsoft Surface and an iPad mini. While on the road, I had read much on both products and felt reasonably well prepared for the tasks.

This proved correct. But the product experience was another thing.

First, the Surface: Unpack, plug in, boot up, no problem. The magnetic touch keyboard and power adapter latch onto the tablet-PC without ado, the machine’s virgin launch is a breeze: I answer a few simple questions, enter my hotmail credentials and I’m in business… sort of.

In order to get a taste for the full Surface experience, I fire up Word 2013 (included with the tablet) to write this Monday Note. Not so slick, the keyboard and touchpad aren’t very helpful. When I ordered the Surface, I chose the slim $119.99 Touch Cover combo rather than the thicker $129.99 Type Cover. Building a keyboard into a protective cover is a great idea, but, as the name implies, the Touch version doesn’t have a real keyboard. Instead, you have to work with an unsatisfying, felt-like surface without tactile feedback. For “real” typing, I need the “real” Type Cover. I’m off to Stanford’s MS Store to correct my expensive mistake.

Keyboard problem solved, I hit another snag. While Word 2013 does a good job zooming using a two-finger touch, the Control Panel and other essential parts of Windows RT are (barely) touch-enabled retreads from Windows 7; they ignore your zoom. I discover this when I need to type accented characters such é or ñ, characters that, of course, don’t appear on the keyboard. Normally, this isn’t a problem; go to the Windows Control Panel, select the English International keyboard as the input mode, and you’re set. You type ~ followed by n to get ñ.

But how does this actually work in the reimagined Windows RT? I fumble around and finally find my old friend, the Control Panel:

From there, I go to Clock, Language, and Region, pop open the Input Method menu… and select the wrong mode. Because of the lack of zoom, picking the right option in a list a game of chance. You need the sanded fingertips Steve Jobs famously derided when asked about smaller tablets.

If I use the Touch Cover trackpad instead of directly touching the Control Panel on the ironically named Surface screen, things improve dramatically: My fat fingers now become delicate. This might explain why Microsoft insists on selling a keyboard with its Surface tablet. Without one, in my admittedly limited experience, it’s not quite useable.

Then there’s the UI formerly known as Metro. In the current state of Windows 8 and Windows RT, it’s only skin-deep: Using Office apps or modifying system settings quickly calls up the old Windows 7 UI. It’s not the end of the world, the UI will evolve with future versions but, in the meantime, the much-hyped Surface tablet cum PC feels far from polished and consistent. And the no-less-touted reimagination of Windows doesn’t go much deeper than the very neat and imaginative UI on its… surface.

At least the vaunted Surface kickstand works quite well… although only in landscape mode, and, even then, only if you’re sitting. If you type while standing or want landscape mode, forget the kickstand.

I’ll keep using the product in personal writing and presentations to make sure I’m not missing some killer feature. In the meantime, I’d be interested to know if Steve Ballmer or Microsoft Board Members use a Surface tablet rather than a MacBook Air running Windows 8, a truly excellent combination in my own paid-for experience.

On to the iPad mini.

Like its forebears — and its current competitors — setup is fast and easy. If you already have an iPad or an iPhone backed-up in iCloud, everything syncs and downloads nicely.

But what about the “mini” part?

I bought a Nexus 7 when it came out and liked the fact I could pocket it, whether in jeans or in jacket. The iPad mini is larger than the Nexus, slightly more than half an inch (14.7mm) wider. Still, the “mini” will fit inside the front pocket of most jeans. Unfortunately, it’s too tall for most shallower back pockets, but it’ll fit nicely in outside jacket and topcoat pockets (as measured in this August 2nd, 2009 Monday Note where I hoped for a pocketable Apple tablet) — and doctors’s and nurses’ lab coats…

Regardless of how you carry it, the iPad mini’s hardware is neatly detailed. It’s thin and light and the “aluminium”, as Sir Jonathan Paul Ive (KBE) rightly pronounces it in the Queen’s English, works well with the white front bezel. The (stereo) speakers sound good although, to my ears, they’re surprisingly no better or louder than the latest iPhone’s, themselves a marked improvement over earlier generations.

Turning to the screen, I agree with the many who are less than thrilled with the mini’s display. I think this is the result of a compatibility decision: The mini has the same number of pixels (1024 by 768) as the iPad 2, but at a higher density (163 pixels per inch vs. the original 132 ppi). With the same pixel count as the iPad 2, all apps run unchanged, their screen rendition is just smaller. The visual experience isn’t as pleasant as on the iPad 2 itself, let alone the iPad “3″ and its higher pixel density display.

When you read a Kindle or iBook novel, a magazine such as Bloomberg Businessweek, or the NY Times on your iPhone, the content isn’t simply the iPad version squeezed to fit into the phone’s tiny display. These applications reformat their content, they adapt to be legible… no squinting, no eye strain. Let’s hope these apps will be updated to make better use of the iPad mini screen, as opposed to offering squished iPad 2 rendering.

(We’ve also read the complaints that the mini isn’t a “Retina” device…but on this topic, I must recuse myself: I’ve twice mistaken an iPad 2 for the higher resolution device. Last Spring, as I had just gotten a new high-resolution iPad, at Soho’s Les Amis bistro, I watched a gentleman at the next table flip through beautiful pictures on his iPad. I leaned over and asked how he liked his new iPad “3″. ‘What? No, it’s last year’s iPad 2…’.

A few days later in Paris, I reset my iPad 2 in order to hand it to my Mother-In-Law, a replacement for the MacBook Air that was giving her — and me — headaches. Oops, I actually reset my new Retina iPad, mistaking it for the older iPad 2. No harm done, the iCloud backup resuscitated my new tablet.)

So, which of these two devices will enjoy the brighter future? The “inadequacy” of the mini’s screen quality is an issue — and could become a problem as both Android and Amazon ecosystems keep improving (and continue to undercut Apple’s prices). But I think the improved portability (size, weight), the elegant design and material quality, plus the instant compatibility with the hundreds of thousands of iPad apps will count for a lot.

As for the future of Microsoft’s Surface, as Peter Bright (a noted Microsoft analyst) concludes in his review of Redmond’s new tablet, it really needs a keyboard and pointing device in order to be usable with Office applications. This makes a good case for Apple’s decision to keep laptops and tablets separate, freeing each to do what it does best.

JLG@mondaynote.com

 

What happened to the iPad?

 

On October 23rd, Apple announced the widely expected iPad mini. The company also surprised most by also introducing a faster “4th generation” iPad, swiftly replacing the one launched on March 7th this year, seven and a half months ago.
That same day, Tim Cook proudly proclaimed a an iPad milestone: 100 million shipped since its April 2010 debut. Impressive.
No less impressively, Wall Street analysts quickly did their subtractions and concluded Q4 iPad shipments — to be officially announced two days later — were going to miss expectations.
They were right.
Where seers expected somewhere between 15 and 16 million iPads, the actual Q4 number was 14 million. Using the Average Selling Price (ASP) we’ll discuss in a moment, a “miss” of 2 million units translates into more than $1B in missed revenue.

Compared to the 17 million iPads shipped in Q3 (ending in June), Q4′s 14 million units look like a steep decline. This isn’t in keeping with the fast growth the iPad had shown since its 2010 beginning. On a “Quarters After Launch” basis, the iPad used to grow faster than the iPhone. Now, we see a decline from the 15.4 million units shipped in Q1 (ending December 2011), and only a modest 26% increase from last year’s Q4. Where are the go-go days of 70% or even 100% year-to-year growth?
Two days later, at the October 25th Earnings Conference Call, Apple’s CEO tried to put a better face on that strangely anemic 26% growth. As noted by Horace Dediu, Tim Cook pointed to a different number: sell-thru, units actually delivered to customers, grew by 44%. Not great, but not as tepid as 26%.
(See Philip Ellmer-Dewitt’s detailed explanation here. In essence, when product ships, it “changes hands”: the channel partner “takes title”, meaning it moves from Apple’s books to the reseller’s. For Apple, the items thus shipped count as revenue, even if they’re not sold-thru, that is sold to end customers. When the volume of products Apple ships to retailers is less than the volume sold-thru, channel inventories decline, more sales out than shipments in. This is how Apple sees revenue go up by 26% while sell-thru increases by 44%. A likely explanation for last quarter’s depletion of channel inventory is making room for the two new iPad models.)
Resorting to sell-thru numbers as a way to put iPad numbers in a better light could be habit-forming, it could force Apple’s management to provide more detailed inventory numbers more regularly.
On the end-customer demand side, Apple execs attributed the low Q4 iPad number to several months of intense and detailed rumors ahead of the iPad mini launch.
So, the iPad story could look this: Last year, the yearly iPhone refresh moved from June to October; as a result, Q4 iPhone shipments disappointed; but fast growth resumed once the new model shipped; the pattern now applies to the iPad as well.

No, the iPhone and the iPad behave more differently than in the above scenario. I went back to SEC filings and extracted data for the following graph tracking iPhone and iPad ASP’s for the past eight quarters:

The iPhone ASP is stable. Carriers keep indulging in (wooden) saber-rattling, complaining about “excessive” iPhone subsidies. Here, subsidy means the difference between the price carriers pay for a handset and the typical end-user price: $199 for the phone with a two-year contract. In such a $199 arrangement, for the past five years, Apple has been able to extract more money from carriers than any of its competitors. Paraphrasing Horace Dediu, the explanation for such an enduring advantage is a simple one: For carriers, the iPhone is a better salesman, it generates more revenue, a higher ARPU (Average Revenue Per User). As a result, carriers pay the iPhone salesman a higher commission, meaning a higher handset price. (And they sound like the grouchy bosses who complain their star sales person makes too much money…)

For the iPad, there is no such arrangement, no two-year contract, no subsidy. For example, AT&T will sell an iPad with a no-commitment, month-to-month wireless data contract. Without a two-year commitment, carriers have no incentive to sell the iPad at a particularly attractive price, causing customers to face the price without a subsidy fig-leaf. (One might argue smartphone contracts lead customers to borrow money, the $400+ subsidy, at usurious rates, but such habits are hard to break. Rare is the carrier that will offer a cure, a lower monthly contract if you pay full price for the phone.)

How do iPad customers react to the cold price truth? All we know is the ASP has been falling for five quarters. And we can also surmise price figures more actively in competitive situations than it does with smartphones. Or, for that matter, with notebooks and desktop computers: ASP for Macs is stable or growing a little, from $1282 last year to $1344 last quarter. These prices don’t prevent Apple from being number one on desktops and notebooks in the US — as Tim Cook reminded everyone on October 23rd.

The surprise iPad refresh can be seen as a reaction to competitive pressures, existing or upcoming ones. And, for the iPad mini, we have an interesting combination: premium price and an avowed lower gross margin, ‘significantly below our cooperate average‘ says Apple’s CFO during the October 25th Earnings Conference Call.

The iPad definitely behaves differently, neither a bigger smartphone, nor a smaller PC, thus confirming it belongs to a new category whose rules are still being established. The next few quarters will be even more interesting than recent ones: Google, Amazon and Microsoft have new products worth watching, they all intend to fight for a dominant role in the new space.

JLG@mondaynote.com

Apple, ARM, and Intel

 

Apple and Samsung are engaged in a knives-out smartphone war, most infamously in the courts but, more importantly, in the marketplace. In its latest ad campaign, Samsung has cleverly “borrowed” a page from Apple’s own marketing playbook, posturing the iPhone as the choice of autumn-aged parents and brainwashed queue sheep.

But when it comes to chips, the two companies must pretend to be civil for the sake of the children: Samsung is the sole supplier of ARM-based processors for the iPhone.

Something has to give.

Since no one sees Samsung getting out of its booming smartphone business, the conclusion is that Apple will assume full custody, it will take its iDevices processor business elsewhere.

But where? There are rumors (which we’ll get to), and none of them so much as hint at Intel.

Except for the rare cameo appearance, Intel is nowhere in the Post-PC world (or, as Frank Shaw, the literate and witty head of Microsoft’s corporate PR obdurately insists, the “PC Plus” world). Becoming Apple’s ARM source wouldn’t just put the Santa Clara company in the race, it would vault them into the lead.

They’ve been there before: Intel scored a coup when Apple switched to the x86 architecture for its Macintosh line in 2005. An iDevice encore would mark an even bigger score as smartphones and tablets have already reached much higher volumes and grow much faster.

So… Why hasn’t Intel jumped at the chance?

The first explanation is architectural disdain. Intel sees “no future for ARM“, it’s a culture of x86 true believers. And they have a right to their conviction: With each iteration of its manufacturing technology, Intel has full control over how to improve its processors. They can reduce x86 power consumption by using smaller building blocks (they’re already down to 22 nanometers wide). They can micro-manage (literally) which parts of a complex chip will be turned on, off, or somewhere in between, in a kind of hibernation.

A further problem is that Intel would need to change roles. Today, the company designs the microprocessors that it manufactures. It tells PC clone makers what these chips will do, how many they will get, when, and for how much. Its development model (called Tick Tock in industry argot) essentially defines the schedules and finances of hardware makers.

This dictatorial model won’t work for iDevices. Apple crossed the border into Intel’s chipset empire back in the Macintosh era, but, today, it has far too much invested in its ARM design to again surrender complete control. As evidenced by the A6 processor running inside the iPhone 5, Apple goes to great lengths to customize the basic ARM cores, adding graphic processors, memory, and large amounts of support logic, and even resorts to aggressive hand-optimization of the silicon layout — as opposed to just letting CAD software tools do the job.

Intel would have to accept Apple’s design and “pour” it into silicon — it would become a lowly “merchant foundry“. Intel knows how to design and manufacture standard parts, it has little experience manufacturing other people’s custom designs…or pricing them.

Which leads us to the most likely answer to the Why Not Intel question: Money. Intel is a sophisticated business entity that expertly balances both terms of the profit equation. On the one hand, they use brand identity, marketing incentives, and a little strong-arming to keep prices “acceptable”, while on the other, the Tick Tock technology and product development pushes its costs down.

The company meticulously tunes the price points for its processors to generate the revenue that will fund development as well as the Intel Inside campaigns that have cost hundreds of millions of dollars over the years, to say nothing of the more recent $300M Ultrabook fund.

One way to visualize Intel’s money pump is to think of what the industry calls a Wafer Start. Here, “wafer” refers to the basic silicon “galette” that will go through the manufacturing steps and emerge with thousands of chips ready to be diced out. For Intel, profit comes from the difference between the cost of running a wafer through the $5B manufacturing unit (a “fab” in our argot) and the revenue that the marketplace will grant each chip.

Intel’s published prices range from a “low” $117 for a Core i3 processor to $999 for a top-of-the-line Core i7 device. Of course, these are the publicly advertised price tags, so we can assume that Acer, Lenovo, and HP pay less… but compare this to iSuppli’s estimate for the cost of the A6 processor: $17.50.

Even if more A6 chips could be produced per wafer — an unproven assumption — Intel’s revenue per A6 wafer start would be much lower than with their x86 microprocessors. In Intel’s perception of reality, this would destroy the business model.

In the meantime, the rumor of the day is that Apple will use TSMC, a well-regarded Taiwanese foundry, the world’s largest. TSMC is known to have made test runs of the A4 last year, and is now reportedly doing the same for the A5 processors that power the new iPad. Furthermore, “industry insiders” have reported that Apple attempted to secure exclusive access to TMSC’s semiconductor output but were rebuffed. (Qualcomm tried, as well; same result.)

This raises a big Disruption question for Intel: In the name of protecting today’s business model, will it let TSMC and others take the huge mobile volume, albeit with lower profit per unit? Can Intel afford to shun ARM?

For all of Intel’s semiconductor design and manufacturing feats, its processors suffer from a genetic handicap: They have to support the legacy x86 instruction set, and thus they’re inherently more complicated than legacy-free ARM devices, they require more transistors, more silicon. Intel will argue, rightly, that they’ll always be one technological step ahead of the competition, but is one step enough for x86 chips to beat ARM microprocessors?

JLG@mondaynote.com

 

Losing The Plot

 

It’s a beautiful sight when, year after year, a company stays true to its original idea. But when a business loses the plot, we witness a sorry spectacle, an expensive slide into mediocrity. Every wayward company is wayward in its own way: Accountants masquerading as product planners; wannabe visionary execs jealousy trying to prove that they, too, can put a dent in the universe; board members panicking over bad press. But the result never varies: Customers leave.

A few weeks ago I was in France, enjoying the benefits of the French Paradox and happily testing its limits: Lots of duck fat washed down with an ethanol tincture of polyphenols. It was in this fulfilled state that I watched the launch of the latest iteration of an iconic product. There was a little stretch in one dimension, a little squeeze in another, measurable weight loss, more power better utilized, bigger screen for navigation…

The kommentariat were unanimous, the sum of the improvements equals a blockbuster.

I’m not talking about the boring iPhone 5. The occasion was the seventh iteration of the Volkswagen Golf, introduced at the 2012 Paris Motor Show (or, in the modest French appellation, the Mondial de l’Automobile).

The praise is deserved. Golf 7.0 comes with plenty of new features, yet stays backwards-compatible with previous releases…it’s still recognizable as a Golf.

Born in 1974, the Golf (then dubbed the Rabbit in the US) managed to stay true to Volkswagen’s overall corporate brief — its “People’s Car” mandate — while giving the idea new life by walking away from the Beetle’s design. The engine and drive wheels moved upfront; Giorgetto Giugiaro, the legendary and extraordinarily prolific designer, outlined the hatchback’s iconic silhouette, still recognized and loved 38 years later.

Admittedly, the Golf strayed a bit over the years, it gained weight, developed haunches. At one point, it grew to nearly twice its original mass. Worse, reliability was up and down, as were the experts’ opinions of its drivability.

But despite the swerves and cul-de-sac design details, Volkswagen managed to return to the original concept of a sexy, functional hatchback. And the customers didn’t leave — more than 30 million Golfs have been sold.

The Honda Civic story isn’t nearly pleasant. The Civic was introduced in 1967 as a tiny kei car hatchback called the N360 — for the 360 cubic centimeters of its motorcycle engine. In 1972, the little hatchback grew a pair of additional cylinders and became an auto industry icon, the first for Honda.

Year after year, Honda lovingly improved the Civic: Larger, smoother body; more comfortable interior; cleaner, more powerful engine; smoother suspension. For about twenty years, the Civic was a model of neat progression, of staying true to the original hatchback idea.

But in the mid-nineties, the Civic lost its unmistakable identity. No longer satisfied with being a versatile, dependable transportation machine, the Civic wanted to be treated with respect, it wanted…valet parking. A few years later, the Civic suffered a midlife crisis and tried to become a sports car.

What happened? Was it because of a change of the guard inside the company? Honda was often taken to task for being too much of a maverick; did the Japanese company try too hard to placate critics and become more “normal”?

The parallel Golf and Civic stories show a sharp contrast between the two companies. In many respects, the Civic started as a technically superior product. It had a better engine, better manufacturing, and legendary reliability. But Volkswagen stuck to the original concept and is well rewarded as a result.

There are even sorrier examples of lost plots in the auto industry — think Citroën — but it’s time to turn to our industry.

Regard Hewlett-Packard, serial plot loser.

In the early 70’s, HP owned the PC market (and forgive the anachronism…back then they were called “desktop computers”). Using the technical and financial might it had earned with its late-sixties “programmable calculator” line, HP developed a range of “discrete logic implementations” (integrated circuits) of their 2100 series minicomputer instruction set. It was a clean, visionary strategy. Very quickly, HP’s 9800 series of desktop computers flattened every competitor in its path: Wang, Olivetti, Tektronix, Seiko…

Then, in 1972, Intel introduced the 8008 microprocessor. HP looked down its nose at these  cheap, woefully underpowered 8-bit gizmos…there was no way these toys could compete with HP’s fast, powerful, 16-bit desktop devices — why, even HP’s old 9810A calculator used a 16-bit brain.

We know the rest of the story: The inexpensive devices Pac-Manned their way into HP’s PC business. The 9800 series was displaced by a crowd of entrants, many powered by Microsoft software, including the Apple ][, whose Basic Applesoft interpreter came from Redmond.

It wasn’t until 2002 that HP regained the PC industry’s top spot — and it only did so by acquiring Compaq, the deposed king of PCs. (Ironically, Compaq’s history is similarly predatory: It vaulted to the top when it acquired DEC, another erstwhile king, albeit of the  minicomputer industry. DEC missed the PC revolution entirely.)

Ten years later, after a sorry successions of CEOs, HP’s PC business has become a lackluster, low-margin (5%) endeavor, and Lenovo (or will it be Acer?) is about to assume the number one position in sales.

There is more.

HP was once the king of “mobile computing”. Starting with the HP 35 pocket device (1972), the company grew a phenomenally successful range of iconic devices such as the HP-80 and the HP-12C, the darlings of financial users.

In 1974, the HP-65 topped the range with its magnetic stripe reader for external program storage. The HP-80 had such high margins it provided most of the company’s meager profits during a mid-70‘s financial downturn. (Or so I, lowly HP trenchworker at the time, was told by “upper management”. I’ve researched the record but haven’t been able to confirm the factoid.)

HP owned the pocket-sized form factor, but they’ve since lost the mobile computing plot. There have been a few spasms — the iPaq devices, an iPod dalliance, the amazingly botched $1.2B Palm acquisition– but now HP plays no part in the mobile revolution.

HP CEO Meg Whitman knows this is a problem, that it must be fixed. She tells us that the company must “offer a smartphone because in many countries of the world that is your first computing device.” Her solution? HP won’t have a smartphone in 2013. (Whitman has also announced losses for this year, more losses for next year, and plans to lay off 29,000 people.)

Indeed, for more and more people, in both developing and developed countries, the smartphone has become the first computing device, the really personal computer. So what does “No Smartphone In 2013″ say?

There’s no dearth of Taiwan companies ready with customizable designs. That’s how Nokia got its first Lumia phones from Compal. So why isn’t HP coming up with a Windows Phone 8 device in the next few months? There’s only one possible answer: margins. The smartphone business, dominated as it is by Samsung and Apple, is now in a clones race to the bottom. For HP, this is an all-too-familiar plot line.

How can HP, with its new Make it Matter slogan, continue to lose its key plots? Waiting until 2014 to re-enter the smartphone race won’t help. And competing against Lenovo, Acer and others in the Windows 8 PC-cum-tablet space won’t make HP’s clone business more profitable.

JLG@mondaynote.com

 

French Entrepreneurs Revolt

 

Not against their VC overlords, mind you. No, calling themselves “Pigeons” (The Fleeced) they staged a highly visible protest  (Google translation) against their government’s latest stroke of the money pump. In a nutshell, the new Socialist administration proposed to tax an entrepreneur’s capital gains as ordinary income. In very rough numbers, the tax rate would go from 19% to 60% or, some say, 80% in extreme cases.

The outcry, obligingly amplified by the media, forced the Minister of Finance to meet with a delegation of the aggrieved and to beat a hasty, muddy, non-retreat retreat with the customary weasel words of caring for entrepreneurship, competitiveness, social justice and the country’s much-needed financial sanity.

This isn’t the first time the French government makes moves that hurt both the facts and the perception of its economy. It is, I believe, yet another manifestation of its perverted, ambivalent relationship with money.

Allow me to explain.

I’m at the Café de Flore, my Parisian neighborhood, what I call the World Centre for the Caviar Left. There, my café-crème drinking companions sometimes question my having left France to go live in the epitome of materialism, Silicon Valley. I point to the double-parked Porsches, the Louis Vuitton, Dior, Armani, Berlutti and Ralph Loren stores nearby. The answer, uttered in utmost sincerity, never varies: ‘It’s not the same…’

In a way, they’re right. Considering sex and money, Americans and French cultures exhibit truly polar opposite behaviors. The French see nothing wrong with a President having a wife, a mistress and a love child, they revel in sexual and often sexist jokes. But, if you ask someone how much they paid for their apartment, they’ll react as if you’d touched them in boundary-breaking ways. Conversely, they perceive us Americans as demonizing sex — think a past President and his “oral” office — while being obscene with money.

If, as I believe, the most honest statement of country’s values is its tax code, the French government has time and again clearly stated where it stands.

One such declaration is the ISF, the Wealth Tax. It’s not a gains tax (on income or capital), or a transaction tax (sales tax or VAT), this is a levy on your assets after you’ve paid all taxes on the path to your owning said assets. I can be seen as  a cultural indictment of the “haves”. The ISF comes with bizarre (or revealing) exclusions: You own a business, that asset is not taxed; the same goes for your expensive art collection; 75% of the forest you own is ISF-free. (I’ll stop there and warn readers the Wikipedia ISF article is woefully out of date on details, but right on the concept.)

The ISF keeps exerting a perverse influence on the country.
First, too many people with substantial assets fled the country, often to nearby Belgium and UK where they were welcomed as they were going to enrich the local economies. I personally know high-tech executives who, after paying good-size income tax bills for decades, decided to protect their savings and moved out. A loss for the French, from grocers to cab drivers and teachers.

Second, companies with European HQs in France moved out, their execs paying income tax on their wages didn’t want to pay additional levies on their assets. Apple is but one such example. Its Euro HQ is now in London. And, of course, no other company will now expose its execs to the ISF by locating a headquarter in France. Another loss in money and, just as important, in reputation, in making France look business-hostile.

Last May, France elected a new President, François Hollande, a leader of the Socialist Party who successfully presented himself as an alternative to the somewhat conservative and definitely abrasive Nicolas Sarkozy. On the stump, Hollande promised more fiscal justice and went for a new low in demagoguery, saying: ‘I hate rich people’.

Once he got in office, needing more revenue in a sinking economy, he announced he’d raise the ISF percentage, and tax incomes above 1M€ at a new 75% rate. Plus the new tax rate for capital gains discussed at the beginning.

Interestingly, besides the Pigeons’ protest (an example here, so-so translation by Google here), high functionaries in the Ministry of Finance indict their administration’s latest moves. In Le Monde (the semi-official daily) these well-informed technocrats publish a damning opinion piece (translation here) under a nom de plume, Les Arvernes. In it, they remind us that, with the rarest of exceptions, their government bosses never held real jobs. These apparatchiks have no intellectual and, most important, no emotional connection to what building a business is, to putting money and reputation at risk. When you get a wage, you don’t put money at risk. When you build a company, you do. Taxing two different risks at the same rate shows dangerous ignorance of what building a business is — and of the consequences of making France less attractive to business builders.

Here in the Valley, once we’re done slapping our foreheads, we look forward to seeing more talent flow in, looking for a friendlier ecosystem. Paradoxically perhaps, entrepreneurs moving to the Valley shouldn’t worry the money pump operators back in France. As the Israel and India examples uncontrovertibly establish, emigrating entrepreneurs end up doing a lot of good for their country. They send back money, jobs, savoir-faire, technology, culture and optimism. To them, Silicon Valley is a new Villa Medici. This is much better than the Maginot Line French politicians sometime fantasize about in order to prevent individuals to move to better business climates.

JLG@mondaynote.com

 

Apple’s $30B Maps

 

A short week after releasing the iPhone 5, Apple’s CEO publicly apologizes for the Maps fiasco and the company’s website updates its description of the new service. As the digital inspirations blog found out, the unfortunately emphatic description that once read:

Designed by Apple from the ground up, Maps gives you turn-by-turn spoken directions, interactive 3D views, and the stunning Flyover feature. All of which may just make this app the most beautiful, powerful mapping service ever.

becomes more modest:

Designed by Apple from the ground up, Maps gives you turn-by-turn spoken directions, interactive 3D views, and the stunning Flyover feature. All in a beautiful vector-based interface that scales and zooms with ease.

In his letter of apology, Tim Cook also reminds everyone of alternatives to his company’s product, and of easy ways to access Google and Nokia maps:

While we’re improving Maps, you can try alternatives by downloading map apps from the App Store like Bing, MapQuest and Waze, or use Google or Nokia maps by going to their websites and creating an icon on your home screen to their web app.

And Consumer Reports, after trying the new Maps found that, warts and all, they weren’t too terrible:

Apple uses maps from TomTom, a leading navigation company. We suspect many criticisms pointing to the map quality are misguided, as we have found TomTom to provide quality maps and guidance across multiple platforms. Instead, the fault may be Apple’s software applied to the TomTom data. […] Either way, in our experience thus far, this is a minor concern.
Bottom line:
Both the free Apple and Google navigation apps provide clear routing directions. Apple feels like a less-mature product. But as seen with the initial competing applications for the iPhone, we would expect updates to this new app over time–and Apple has promised as much. When getting down to the nitty gritty, Google provides a better overall package, but we feel that both provide a good solution for standard software. We expect the competition between the companies will benefit customers with ongoing improvements.

So… Normal teething problems, forgivable excess of enthusiasm from proud Apple execs, the whole media fireworks will blow over and everything will be soon forgotten — remember Antennagate?

One would hope so, especially if Apple’s Maps keep improving at a good pace.

But look at this graph:

Since the iPhone 5 release, and the Maps fracas, Apple shares lost about 4.5% of their value, that’s about $30B in market cap.

Fair or not, it’s hard not to fantasize about another course of events where, in advance, a less apologetic Tim Cook letter would have told Apple customers of the “aspiring” state of Apple Maps and encouraged them to keep alternatives and workarounds in mind. And where Apple’s website would have been modest from day one.

We’ll never know how Apple shares would have behaved, but they certainly wouldn’t have gone lower than they stand now — and Apple’s reputation as a forthright, thoughtful company would have been greatly enhanced.

This is more than piling on, or crying over spilled maps. We might want to think what this whole doing the right thing — only when caught — says about Apple’s senior management.

First, the technical side. Software always ships with fresh bugs, some known, some not. In this case, it’s hard to believe the Maps team didn’t know about some of the most annoying warts. Did someone or some ones deliberately underplay known problems? Or did the team not know. And if so, why? Too broad a net to cast and catch the bugs? Too much secrecy before the launch? (But Maps were demoed at the June WWDC.)

Second, the marketing organization. This is where messages are crafted, products are positioned, claims are wordsmithed. Just like engineers are leery of marketeers manhandling their precious creations, marketing people tend to take engineers’ claims of crystalline purity with, at best, polite cynicism. One is left to wonder how such a hot issue, Apple Maps vs. Google Maps, wasn’t handled with more care — before the blowup. And why, with inevitable comparisons between an infant product and a mature, world-class one, the marketing message was so lackadaisically bombastic.

And last, the CEO. Was trust in his team misplaced, abused? Were the kind of checks that make Apple’s supply chain work so well also applied to the Maps product, or was some ill side-effect of team spirit at play, preventing the much-needed bad news to reach the top?

We don’t need to know. But Apple execs do if they want the difficult birth of Apple Maps to be written in history as a wake-up call that put the top team back on track. I don’t want to think about the alternative.

JLG@mondaynote.com

Apple Maps: Damned If You Do, Googled If You Don’t

While still a teenager, my youngest daughter was determined to take on the role of used car salesperson when we sold our old Chevy Tahoe. Her approach was impeccable: Before letting the prospective buyer so much as touch the car, she gave him a tour of its defects, the dent in the rear left fender, the slight tear in the passenger seat, the fussy rear window control. Only then did she lift the hood to reveal the pristine engine bay. She knew the old rule: Don’t let the customer discover the defects.

Pointing out the limitations of your product is a sign of strength, not weakness. I can’t fathom why Apple execs keep ignoring this simple prescription for a healthy relationship with their customers. Instead, we get tiresome boasting: …Apple designs Macs, the best personal computers in the worldwe [make] the best products on earth. This self-promotion violates another rule: Don’t go around telling everyone how good you are in the, uhm…kitchen; let those who have experienced your cookmanship do the bragging for you.

The ridicule that Apple has suffered following the introduction of the Maps application in iOS 6 is largely self-inflicted. The demo was flawless, 2D and 3D maps, turn-by-turn navigation, spectacular flyovers…but not a word from the stage about the app’s limitations, no self-deprecating wink, no admission that iOS Maps is an infant that needs to learn to crawl before walking, running, and ultimately lapping the frontrunner, Google Maps. Instead, we’re told that Apple’s Maps may be  “the most beautiful, powerful mapping service ever.

After the polished demo, the released product gets a good drubbing: the Falkland Islands are stripped of roads and towns, bridges and façades are bizarrely rendered, an imaginary airport is discovered in a field near Dublin.

Pageview-driven commenters do the expected. After having slammed the “boring” iPhone 5, they reversed course when preorders exceed previous records, and now they reverse course again when Maps shows a few warts.

Even Joe Nocera, an illustrious NYT writer, joins the chorus with a piece titled Has Apple Peaked? Note the question mark, a tired churnalistic device, the author hedging his bet in case the peak is higher still, lost in the clouds. The piece is worth reading for its clichés, hyperbole, and statements of the obvious: “unmitigated disaster”, “the canary in the coal mine”, and “Jobs isn’t there anymore”, tropes that appear in many Maps reviews.

(The implication that Jobs would have squelched Maps is misguided. I greatly miss Dear Leader but my admiration for his unsurpassed successes doesn’t obscure my recollection of his mistakes. The Cube, antennagate, Exchange For The Rest of Us [a.k.a MobileMe], the capricious skeuomorphic shelves and leather stitches… Both Siri — still far from reliable — and Maps were decisions Jobs made or endorsed.)

The hue and cry moved me to give iOS 6 Maps a try. Mercifully, my iPad updated by itself (or very nearly so) while I was busy untangling family affairs in Palma de Mallorca. A break in the action, I opened the Maps app and found old searches already in memory. The area around my Palma hotel was clean and detailed:

Similarly for my old Paris haunts:

The directions for my trip from the D10 Conference to my home in Palo Alto were accurate, and offered a choice of routes:

Yes, there are flaws. Deep inside rural France, iOS Maps is clearly lacking. Here’s Apple’s impression of the countryside:

…and Google’s:

Still, the problems didn’t seem that bad. Of course, the old YMMV saying applies: Your experience might be much worse than mine.

Re-reading Joe Nocera’s piece, I get the impression that he hasn’t actually tried Maps himself. Nor does he point out that you can still use Google Maps on an iPhone or iPad:

The process is dead-simple: Add maps.google.com as a Web App on your Home Screen and voilà, Google Maps without waiting for Google to come up with a native iOS app, or for Apple to approve it. Or you can try other mapping apps such as Navigon. Actually, I’m surprised to see so few people rejoice at the prospect of a challenger to Google’s de facto maps monopoly.

Not all bloggers have fallen for the “disaster” hysteria. In this Counternotions blog post,”Kontra”, who is also a learned and sardonic Twitterer, sees a measure of common sense and strategy on Apple’s part:

Q: Then why did Apple kick Google Maps off the iOS platform? Wouldn’t Apple have been better off offering Google Maps even while it was building its own map app? Shouldn’t Apple have waited?

A: Waited for what? For Google to strengthen its chokehold on a key iOS service? Apple has recognized the significance of mobile mapping and acquired several mapping companies, IP assets and talent in the last few years. Mapping is indeed one of the hardest of mobile services, involving physical terrestrial and aerial surveying, data acquisition, correction, tile making and layer upon layer of contextual info married to underlying data, all optimized to serve often under trying network conditions. Unfortunately, like dialect recognition or speech synthesis (think Siri), mapping is one of those technologies that can’t be fully incubated in a lab for a few years and unleashed on several hundred million users in more than a 100 countries in a “mature” state. Thousands of reports from individuals around the world, for example, have helped Google correct countless mapping failures over the last half decade. Without this public exposure and help in the field, a mobile mapping solution like Apple’s stands no chance.

And he makes a swipe at the handwringers:

Q: Does Apple have nothing but contempt for its users?

A: Yes, Apple’s evil. When Apple barred Flash from iOS, Flash was the best and only way to play .swf files. Apple’s video alternative, H.264, wasn’t nearly as widely used. Thus Apple’s solution was “inferior” and appeared to be against its own users’ interests. Sheer corporate greed! Trillion words have been written about just how misguided Apple was in denying its users the glory of Flash on iOS. Well, Flash is now dead on mobile. And yet the Earth’s obliquity of the ecliptic is still about 23.4°. We seemed to have survived that one.

For Apple, Maps is a strategic move. The Cupertino company doesn’t want to depend on a competitor for something as important as maps. The road (pardon the pun) will be long and tortuous, and it’s unfortunate that Apple has made the chase that much harder by failing to modulate its self-praise. but think of the number of times the company has been told You Have No Right To Do This…think smartphones, stores, processors, refusing to depend on Adobe’s Flash…

(As I finished writing this note, I found out Philip Ellmer-DeWitt also takes issue with Joe Nocera’s position and bromides in his Apple 2.0 post. And Brian Hall, in his trademark colorful style, also strongly disagrees with the NYT writer.)

Let’s just hope a fully mature Maps won’t take as long as it took to transform MobileMe into iCloud.

JLG@mondaynote.com

 

The Silly Web vs. Native Apps Debate

 

Mark Zuckerberg admits Facebook was wrong to bet on HTML5 for its mobile app. Indeed, while the previous version was a mere wrapper around HTML code, the latest iOS app is much improved, faster, nimbler. Facebook’s CEO courageously admits the error, changes course, and promises to ship an equally native Android app in the near future.

A fresh set of broadsides from the usual suspects predict, with equal fervor, the ultimate success/failure of HTML5/native apps. See, for example, Why Web Apps Will Crush Native Apps.

This is bizarre.

We don’t know what Zuckerberg and the Facebook technical team were thinking, exactly, when they chose to take the HTML5 route, but the decision was most likely guided by forces of culture and economy.

Perhaps more than any other company in the HTTP age, Facebook is a product of the Web. The company’s engineers spent days and nights in front of big screen monitors writing javascript, PHP, and HTML code for PC users. And no Website has been so richly and promptly rewarded: Facebook is now the #1 or #2 most-visited site (depending on whether you count pageviews or unique visitors).

Even as the Smartphone 2.0 era dawned in late 2007, there was no reason to jump the Web app ship: Smartphone numbers were low compared to PCs. And I’m guessing that when Facebook first looked at smartphones they saw “PCs, only smaller”. They were not alone.

Then we have the good old Write Once Run Anywhere (WORA) refrain. Developing and maintaining native apps for different devices is time-consuming and expensive. You need to hire separate teams of engineers/designers/QA, experts at squeezing the best performance from their respective devices, educing the most usable and intuitive UI, deftly tracking down elusive bugs. And even then, your product will suffer from “feature drift”: The ostensibly separate-but-equal native apps will differ in subtle and annoying ways.

HTML5 solves these problems. In theory.

In practice, two even more vexing dilemmas emerge: Performance and The Lowest Common Denominator.

Mobile users react poorly to sluggish performance. Native apps have more direct access to optimized OS modules and hardware features…which means better performance, faster, more immediate interaction. That’s why games, always looking for speed, are almost universally native apps, and it’s why all smartphone vendors promote native apps, their app stores sport hundreds of thousands of titles.

For the Lowest Common Denominator, consider a player piano that can read a scroll of eight parallel punched hole tracks, a maximum of eight simultaneous notes. You want to create richer music, perhaps on an organ that has multiple ranks, pedals, and stops? Sorry, we need your music to play everywhere, so we’ll need to enforce the eight note standard.

In the world of smartphones, sticking with the Lowest Common Denominator means trouble for new platform features, both hardware or software, that aren’t available everywhere. A second camera, a new sensor, extended graphic primitives? Tough luck, the Web apps can’t support them. The WORA approach stands in the way of creativity and innovation by demanding uniformity. This is especially wrong in a world as new, as fast-changing as the Smartphone 2.0 universe.

Pointing to the performance and lowest common denominator problems with the WORA gospel shouldn’t be viewed as a criticism of HTML5. This new (and still evolving) version of the Web’s content language provides much improved expressive power and cleans up many past sins.

Also, there are usage scenarios where Web apps makes sense and run well across several platforms. Gmail and Google Docs are prime examples, they work well on all types of PCs and laptops… But Google took pains to write native Android and iOS apps to provide better access to Google Docs on leading smartphones.

Forget facts and nuance. “It Depends” isn’t as enticing a headline as the fight between Right and Wrong.

JLG@mondaynote.com

Apple Ads Only Samsung Could Love

Over the years, Apple has produced a number of memorable TV commercials. The “1984” Super Bowl spot, with its dystopian noir and portrayal of Big Blue as Big Brother, is arguably the most celebrated commercial ever made. This bit of sixty-second cinema by Ridley Scott (now Sir Ridley) — director of epoch-making films such as The Duellists, Alien, and, my favorite, Blade Runner — was, and still is, mesmerizing. After the ad was screened for the first time at Apple’s Fall 1983 Sales Meeting in Honolulu the crowd sat in stunned silence… for about three seconds.

When Steve Jobs rebooted Apple in 1997, he needed a rallying cry…and he found one that still resonates: Think Different. Richard Dreyfuss narrated the campaign’s “The Crazy Ones” commercial, but there’s another, never-aired version voiced by Jobs that still moves me to tears. (Last year, on the occasion of Jobs’ demise, AdWeek edited the famous commercial and spliced in a smiling picture of the young Steve at the ending, right after the image of the child opening her eyes… )

Then there’s the long and well-loved “I’m A Mac, You’re a PC” series, featuring John Hodgman and Justin Long (the link gives you access to all 66 TV spots of this historic campaign). It’s more than good fun, it’s a great, lasting example of a classic (a polite way of saying apparently “unoriginal”) strategy: Us vs. Them. The ads are brilliant, consistent, cleanly executed with simple, unencumbered visuals and a sly, understated humor. A joy.

Occasionally, Apple’s sense-of-commercial misses the mark, such as in this PowerMac G4 dud that features tanks and a US Army sergeant voice-over. But the missteps have been few; Apple advertising is typically well thought out and well done. Good ideas, near flawless execution.

That brings us to today. Over the past few months, Apple has put out a series of commercials that fall into two categories: a good idea poorly executed, and the great execution of a troubling concept.

First, we have the “Genius” ads. The Apple Store Geniuses provide, undoubtedly, the best tech support in the industry, leading the company’s products to top scores in customer satisfaction surveys. An ad campaign that promotes this advantage while poking subtle fun at the immodesty of the “Genius” designation should have been a straight shot. The idea lends itself to a series of humorous vignettes that end with a relieved customer, a show back on the road, a CEO in distress saved from embarrassment, and so on.

But in practice, as you can see for yourself here, here, and here, the ads fail. The worthy idea is ruined by stories that feel forced and overly cute, the message falls far short of the clarity we expect from Apple’s marketing campaigns… and they’re just not funny. Even the production seems cheap and hurried, right down to continuity problems: A sleeping Genius, garbed in his official blue t-shirt, is roused by a panicked knock on the door and appears a split-second later… with his badge-cum-business card holder now draped around his neck.

The ads were widely panned and, soon, mercifully yanked.

In the more troublesome category, we have the Siri commercials featuring celebrities Zooey Deschanel, Samuel L. Jackson, John Malkovich, and Martin Scorsese. They’re smart and well-produced, they’re flatteringly imitable — and Samsung must love them.

Why?

Because they’re pernicious: They dilute the focus, they detract from Apple products’ own well-deserved and well-earned celebrity.

As a comparison and a template, regard the series of Louis Vuitton ads produced by the great photographer Annie Leibovitz. What, or rather, who do you see? Sean Connery, Catherine Deneuve, Michael Gorbachev, Roger Federer, Keith Richards, Muhammad Ali…

… with a Louis Vuitton bag.

The message is cynical but clear: Our bag is no better than a Gucci or an Hermès, but if you sport our logo, you’ll have something in common with iconic athletes, artists, intellectuals… You, too, can be like Mikhail Gorbachev or Michael Phelps… if only in our accoutrements. (The Annie Leibovitz campaign is pompously called “Core Values” — or, given the roster of subjects, is this unconscious honesty?).

This is an exceedingly well-thought out and executed plan; Louis Vuitton is an astute, superbly managed company, at the top of its game. But what does it say about the iPhone if Apple feels it has to use Louis Vuitton-like tactics to entice consumers?

Until the Siri celebrity campaign, Apple products had always been the focus of Apple marketing. The product is the hero, the ad extolls what it does and how it does it. The recourse to celebrity endorsement sends a new message: The product isn’t strong enough, it needs the propinquity of the famous. And that message becomes even more dangerous because the ads are so slick, so well executed. (The Scorsese ad even includes a sweet visual joke that refers to the director’s 1976 Taxi Driver movie. A nice touch…but it has nothing to do with Apple.)

That’s why Samsung must have an extra reason to smile when they see Ms. Deschanel dance in her pajamas, and that’s why these ads should be yanked and why the celebrity strategy — a first for Apple if memory serves — should be reconsidered.

And, then, at the risk of piling on, there is the product being promoted: Siri.

Doubtless, it works for some people, but how many?

How many give up after a few tries?

I recently asked an Apple insider that very question. The individual thought a moment but couldn’t recall seeing a Siri-using colleague.

There is a difference between a beta product such as a spreadsheet exhibiting annoying but reasonably well-defined bugs — and a beta like Siri that “kind of works” and discourages some users while pleasing others.

I have no doubt Apple has thought out ambitious long term plans for Siri, plans that might unfold in time and make Siri as universally and reliably usable as a other iPhone functions and apps. But, for the time being, besides their feeble Vuitton-like recourse to celebrities, the slick Siri ads could be perceived as misleading. Another reason to shelve them.

As for the Genius campaign: Fire the ad agency, but keep the concept. Press the reset button, keep the message, rewrite the ads. The idea has potential for a series of effective and fun ads.

JLG@mondaynote.com