Browsing Category


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.


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.


The two things that could hurt Google 

Uncategorized By October 26, 2014 Tags: , 7 Comments


Google’s recent Search Box feature is but one example of the internet giant’s propensity to use weird ideas to inflict damage upon itself. This sheds light on two serious dangers for Google: Its growing disconnection from the real world and its communication shortcomings. 

At first, the improved Google search box discreetly introduced on September 5 sounded like a terrific idea: you enter the name of a retailer — say Target, Amazon — and, within Google’s search result page, shows up another, dedicated search box in which you can search inside the retailer inventory. Weirdly enough, this new feature was not mentioned in a press release, but just in a casual Google Webmaster Central Blog post aimed at the tech in-crowd.

Evidently, it was also supposed to be a serious commercial enhancer for the search engine. Here is what it looked like as recently as yesterday:



Google wins on both ends: it keeps users on its own site (a good way to bypass the Amazon gravity well) while, in passing, cashing on ad modules purchased, in this case, both by itself bidding for the keyword “perceuse” (drill) on, and also by Amazon’s competitors offering the same appliance (and whose bids were lower.)

In due fairness, the Google Webmaster Blog explains how to bypass the second stage and how to make a search that lands directly to the site, in our example. Many US e-commerce sites did so. Why Amazon didn’t is still unclear.

Needless to say, this new feature triggered outrage from many e-commerce sites, especially in Europe. (I captured these screenshots on because no ads showed up for US retailers, most likely because I’m browsing form Paris).

For Google’s opponents, it was a welcome ammunition. Immediately, the Open Internet Project summoned a press conference (last Thursday Oct. 23), inviting journalists seen as supportive of their cause. In a previous Monday Note (see Google and the European media: Back to the Ice Age), I told the story of this advocacy group, mostly controlled by the German publishing giant Axel Springer AG, and the French media group Lagardère Active. The latter’s CEO, Denis Olivennes is well-know for his deft political maneuvers, much less so for his business acumen as he missed scores of digital trains in his long career in retail (he headed French retailer Fnac), and in the media business.

Realizing its mistake, Google quickly pulled back, removing the search box on several retailers’ sites, and announcing (though unofficially) that it was working on an opt-out system.

This incident is the perfect illustration of two major Google liabilities.

One: Google’s disconnect from the outside world keeps growing. More than ever, it looks like an insulated community, nurturing its own vision of the digital world, with less and less concern for its users who also happen to be its customers. It looks like Google lives in its own space-time (which is not completely a figure of speech since the company maintains its own set of atomic clocks to synchronize its data centers across the world independently from official time sources).

You can actually feel it when hanging around its vast campus, where large luxury buses coming from San Francisco pour out scores of young people, mostly male (70%) mostly white (61%), produced by the same set of top universities (in that order:  Stanford, UC Berkeley, Carnegie Mellon, MIT, UCLA…). They are pampered in the best possible way, with free food, on location dental care, etc. They see the world through the mirrored glass of their office, their computer screen and the reams of data that constitute their daily reality.

Google is a brainy but also messy company where the left hemisphere ignores what the other one does. Since the right one (the engineers) is particularly creative and productive, the left brain suffers a lot. In this recent case, a group of techies working at the huge search division (several thousands people) came up with this idea of an improved search box. Higher up, near the top, someone green-lighted the idea that went live early September. Many people from the left hemisphere — communication, legal, public affairs — might have been kept in the dark, not even willfully, by the engineering team, but simply by natural cockiness (or naiveté). However, I also suspect the business side of the company was in the loop (“Google” and “candor” make a solid oxymoron).

Two: Google has a chronic communication problem. The digital ecosystem is known for quickly testing and learning (as opposed to legacy media that are more into staying and sinking). In practical terms, they fire first and reflect afterwards. And sometimes retract. In the search box incident, the right attitude would have been to put up a communiqué saying basically, “Our genuine priority was to improve the user experience [the mandatory BS], but we found out that many e-retailers strongly disliked this new feature. As a result, we took the following steps, blablabla.” Instead, Google did nothing of the sort, only getting its engineering staff to quietly remove the offending search box.

There is a pattern to Google’s inability to properly communicate. You almost discover by accident that these people are doing stunning things in many fields. When the company is questioned, it almost never responds by providing solid data to make its point — that’s simply unbelievable from a company that is so obsessed with its reliance to hard facts. Recall Google’s internal adoption of W. Edwards Deming’s motto: In god we trust, all others bring data.

In parallel, the company practices access journalism, picking up the writer of its choosing, giving him/er a heads-up for a specific subject hoping for a good story. Here are two examples from Wired and The Atlantic.



These long-read “exclusive” and timely features were reported respectively on location from New Zealand and Australia. They are actually great and balanced pieces since both Wired’s Steven Levy and Atlantic’s Alex Madrigal are fine journalists.

While it never miss a opportunity to mention its vulnerability, Google is better than anyone else at nurturing it. Like Mikhail Gorbachev used to say about the crumbling USSR: “The steering is not connected to the wheels”. We all know what happened.


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.


Legacy Media: The Lost Decade In Six Charts

newspapers, online publishing, Uncategorized By August 31, 2014 Tags: , 19 Comments


Ten years. That’s how far away in the past the Google IPO lies. Ten years of explosive growth for the digital world, ten gruesome years for legacy media. Here is the lost decade, revisited in charts and numbers. 

The asymmetry is staggering. By every measure, the digital sphere grew explosively thanks to a combination of known factors: a massive influx of capital; the radical culture shift fostered by a “blank slate” approach; obsessive agility in search of new preys; flattened hierarchies; shrugged-off acceptance of failure; refocusing on the customer;  a keen sense of competition; heavy reliance to technology…

By showing neither appetite nor will to check theses boxes, the newspaper and magazine industry missed almost every possible train. In due fairness, some were impossible to catch. But legacy media stubbornly refused to overhaul their culture, they remained stuck in feudal hierarchies, invested way too late in  tech. And, perhaps their cardinal sin, they kept treating failure as an abomination instead of an essential component of the innovation process.

Consequences have been terrible. Today, an entire industry stands on the verge of extinction.

Le’s start with stock performance:


At last Friday’s closing, Google was worth $390bn, the New York Times Company $1.85bn, Gannett $7.62bn (82 dailies and 480 non-dailies, TV stations, digital media properties, etc.) and McClatchy $392m (multiples dailies, digital services…)

In 2003, Google was minuscule compared to the newspaper industry:




Between 2003 and 2013, Google revenue grew by 60x. In the meantime, according to Newspapers Association of America data, the total revenue of the US newspaper industry shrank by 34%. While sales (newsstand and subscriptions) remain steady at $11bn in current dollars, print advertising revenue plunged by 61%.

For the newspaper industry, the share digital advertising, despite growing by 180%,  remained way too small: it only grew from 2.6% to 14.5% and was therefore unable to offset the loss in print ads.


The split in valuation and revenue, inevitably reflected on investors perception in terms of funding :


In the chart above, Flipboard’s huge funding (and an undisclosed but tiny ad revenue), was used mostly to grab market share and eliminate competition. Flipboard did both, swallowing Zite (a far better product, in my view) for a reported $60m, i.e. $9 per user (the seller, CNN, achieved a good upside, while, regrettably, it had been unable to build upon Zite). The Huffington Post was acquired by AOL for $315m in 2011, an amount seen as ridiculous at the time, but consistent with today’s valuation of similar properties. In the newspaper segment, The Washington Post was acquired last year by Jeff Bezos for $250m; Le Monde was acquired by a triumvirate of investors led by telecom magnate Xavier Niel for $110m on 2010; and the Boston Globe was sold by The NYT for $70m when the Times purchased it for… $1.1bn in 1993.

For the newspaper industry, the only consolation is the reader’s residual value when compared to high audience but low yield digital pure players:


In the chart above, Vox Media’s reader value differs widely: Google Analytics grants it 80 million unique visitors per month; Quantcast says 65 million; and ComScore sees 30 million – such discrepancies are frequent, a part of the internet’s charm. As for Le Monde, thanks to the restoration of its P&L (even if its finances seem a little too good to be true), it’s fair to say its reader’s value could be much more than €7, a number based on the 2010 price tag and a combined audience of 14.9m viewers. These numbers include duplicated audiences of 8.8m in print, 7.9m for the fixed web and 3.2m on mobile (source Audipresse One Global, July 2014).


The reader value gap between between digital players and legacy platforms also raises the question of investment attractiveness. Why does VC money only flocks to new, but low yield digital media?

This is a matter of discussion for next week.


Three Years Later: Tim Cook’s Apple

Uncategorized By August 31, 2014 Tags: , , , 14 Comments


On September 9th, Apple will announce products likely to be seen as a new milestone in Tim Cook’s tenure as Apple’s CEO.

You Break It You Own It. This Labor Day weekend sits about midway between two  anniversaries: Tim Cook assumed the CEO mantel a little over three years ago – and Steve Jobs left this world – too soon – early October 2011. And, in a few days, Apple will announce new products, part of a portfolio that caused one of Cook’s lieutenants, Eddy Cue, to gush Apple had the “best product lineup in 25 Years”. Uttered at last Spring’s Code Conference, Cue’s saeta was so unusual it briefly disoriented Walt Mossberg, a seasoned interviewer if there ever was one. After a brief pause, Walt slowly asked Apple’s exec to repeat. Cue obliged with a big I Ate The Canary smile – and raised expectations that will soon meet reality.

After three years at the helm, we’ll soon know in what sense Tim Cook “owns” Apple. For having broken Steve’s creation, for having created a field of debris littered with occasionally recognizable remains of a glorious, more innovative, more elegant past. Or for having followed the spirit of Steve’s dictum – not to think of what he would have done – and led Apple to new heights.

For the past three years, detractors have relentlessly criticized Cook for not being Steve Jobs, for failing to bring out the Next Big Thing, for lacking innovation.
Too often, clickbaiters and other media mountebanks veered into angry absurdity. One recommended Cook buy a blazer to save his job; another told us he a direct line to Apple’s Board and knew directors were demanding more innovation from their CEO; and, last Spring, a Valley bloviator commanded Apple to bring out a smartwatch within 60 days – or else! (No links for these clowns.)

More measurably, critics pointed to slower revenue growth: + 9% in 2013 vs + 65% in 2011 and + 52% in 2010, the last two “Jobs Years”. Or the recent decrease in iPad sales: – 9% in the June 2014 quarter – a never-seen-before phenomenon for Apple products (I exclude the iPod, now turning into an ingredient of iPhones and iPads).

Through all this, Apple’s CEO never took the bait and, unlike Jobs, either ignored jibes, calmly exposed his counterpoint, or even apologized when warranted by the Maps fiasco. One known – and encouraging – exception to his extremely controlled public manner took place when he told a representative of a self-described conservative think-tank what to do with his demand “to commit right then and there to doing only those things that were profitable” [emphasis mine]:

“When we work on making our devices accessible by the blind, […] I don’t consider the bloody ROI.”
“If you want me to do things only for ROI reasons, you should get out of this stock.”

Not everything that counts can be counted and… you know the rest of the proverb. Apple shareholders (not to be confused with pump-and-dump traders) at large seem to agree.

The not-taken road to perdition hasn’t been a road to perfection either. Skipping over normal, unavoidable irritants and bugs – the smell of sausage factories is still with me –

a look at Apple’s Mail client makes one wish for stronger actions than bug fixes leading to new crashes. This is a product, or people, that need stronger decision as they do not represent Apple at its best. Another long-time offender is the iTunes client. One unnamed Apple friend calls it “our Vista” and explains it might suffer from its laudable origin as a cross-platform Mac/Windows application, a feature vital to iPod’s success – we’ll recall its 2006 revenue ($7.7B, + 69% year-to-year growth!) was higher than the Mac’s ($7.4B, + 18%).

Now looking forward, we see this:

Apple Flint Center Barge

A large, cocooned structure being built by an “anonymous” company, next to Cupertino’s aptly named Flint Center for the Performing Arts, where Apple will unveil its next products this coming September 9th. Someone joked this was yet another instance of Apple’s shameless imitation of Google’s innovations. This time Apple copied Google’s barges, but could even get its own clone to float.

Seriously, this is good news. This is likely to be a demo house, one in which to give HomeKit, HealthKit or, who knows, payment systems demonstrations, features of the coming iOS 8 release for “communicating with and controlling connected accessories”. The size of the structure speaks for Apple’s ambitions.

On other good news, we hear Apple’s entry into “wearables”, or into the “smartwatch” field won’t see any shipments until 2015. The surprise here is that Apple would show or tease the product on 9/9. There have been exactly zero leaks of body parts, circuit boards, packages and other accessories, leading more compos mentis observers (not to be confused with compost mentis on Fox News) to think a near term announcement wasn’t in the cards. But John Paczkowski, a prudent ans well-informed re/code writer assures us Apple will indeed announce a “wearable” — only to tell us, two days later, it won’t ship until next year. The positive interpretation is this: Apple’s new wearable category isn’t just a thing, an gizmo, you can throw into the channel and get the money pump running – at nice but immaterial accessory rates. Rather, Apple’s newer creation is a function-rich device that needs commitment, software and partnerships, to make a material difference. For this it needs time. Hence the painful but healthy period of frustration. (Electronic Blue Balls, in the immortal words of Regis McKenna, the Grand Master of Silicon Valley Marketing, who was usually critical of firms making an exciting product announcement, only to delay customer gratification for months.)

The topic of payments is likely to be a little less frustrating – but could mead to another gusher of media commentary. Whether Apple partners with Visa, American Express or others is still a matter of speculation. But one thing is clear: this idea isn’t for Apple to displace or disintermediate any of the existing players. Visa, for example, will still police transactions. And Apple isn’t out to make any significant amount of money from payments.

The goal, as always, is to make Apple devices more helpful, pleasurable – and to sell more of these at higher margins as a result. Like HomeKit or HealthKit, it’s an ecosystem play.

There’s also the less surprising matter of new iPhones. I don’t know if there will be a 4.7” model, or a 5.5” model or both. To form the beginning of an opinion, I went to the Palo Alto Verizon store on University Avenue and asked to buy the 5” Lumia Icon Windows Phone on display. The sales person only expressed polite doubt and excused himself “to the back” to get one. It took eight minutes. The rest of the transaction was quick and I walked out of the store $143.74 lighter. I wanted to know how a larger phone would feel on a daily, jeans and jacket breast-pocket experience. It’s a little heavy (167 grams, about 50 grams more than an iPhone 5S), with a very nice, luminous screen and great Segoe WP system font:

Icon Lumia

I won’t review the phone or Windows Phone here. Others have said everything that needs to be said on the matter. It’s going to be a tough road for Microsoft to actually become a weighty number three in the smartphone race.

But mission accomplished: It feels like a larger iPhone, perhaps a tad lighter than the Lumia will deliver a pleasant experience. True, the one-handed use will probably be restricted to a subset of the (mostly male) population. And today’s 4” screen size will continue to be available.

There remains the question of what size exactly: 4.7”, or 5.5” (truly big), or both. For this I’ll leave readers in John Gruber’s capable hands. In a blog post titled Conjecture Regarding Larger iPhone Displays, John carefully computes possible pixel densities for both sizes and offers an clarifying discussion of “points”, an important iOS User Interface definition.

We’ll know soon.

As usual, the small matter of implementation remains. There are sure to be the usual hiccups to be corrected in .1 or .2 update in iOS 8. And there won’t be any dearth of bilious comments about prices and other entries on the well-worn list of Apple sins.

But I’ll be surprised if the public perception of Tim Cook’s Apple doesn’t take yet another turn for the better.