Attention budding fiction authors! Technology is a great way to exercise your
imagination! Turns out. Yes, with Apple you can write authoratively about
products that don’t exist yet, as well as project the company’s stock price
based on your personal feelings. For bonus points, dream up wild scenarios in
which Microsoft emerges triumphant!
Writing for the Forbes clown car (DBA “Contributor Network”), Evan
Spence has got this “iWatch” thing all figured out.
“Just Like Apple TV, The Apple iWatch Will Be Another Hobby For Tim Cook”
(tip o’ the antlers to the Jony Ive parody account on Twitter).
And how does Spence know this?
Dude, this is Forbes! You don’t have to “know” things to write for
Forbes. Psh. Come on.
I think we’re looking at the iWatch product as being closer to Apple TV than
the Apple iPad.
Well, that’s an opinion. The problem is that it’s an opinion on a device we
know nothing about. If you’re going to write a piece about an unknown Apple
product, you want to avoid two pitfalls:
Assuming it’ll be like other
products currently available.Not knowing anything about what Apple might bring
to the table.
Back to Spence:
The form factor and expectations of a watch mean there is very little
physical room to try out new ideas.
Just because you can’t imagine how to innovate in a particular space does not
mean that Apple can’t.
I also doubt that Apple has come up with a fundamental change in battery
technology …
Sure! Heck, it’s not like the company’s ever come up with any innovations in
battery technology before. And it’s not like Apple’s constantly working on new
ideas. Give it up already, Apple. You’re just embarrassing yourself with tablets
and laptops that run all day.
Now watch this logical kung foolery. Spence thinks an Apple iWatch will be
evolutionary rather than revolutionary because Apple’s only shipped evolutionary
devices in the recent past.
These are conditions where Apple has been strong in the last few years –
working within an industry expectation and looking to do something different
that appeals to the public – but that’s not every Apple product. The MacBook
Pro’s addition of a retina screen is a push to do higher resolution, not a
fundamental change to the laptop; the iMac is thinner with a focus on
minimalism; and the iPhone is a steady as she goes product with incremental
improvements in the hardware.
And the new Mac Pro is just like the old one, except in an entirely new form
factor with a unified thermal core and, OK, look, coming up with opinions that
make sense is really hard.
Here’s the thing. There’s a reason that Apple generally makes incremental
improvements to existing product lines: When it enters a market it ships the
best product it knows how to make. The iPod, iPhone, and iPad all completely
reinvented their respective markets. It’s possible that Apple will just ship an
incremental improvement on existing smartwatches, but it would be completely out
of character for the company to do so.
Which leads me to Apple TV. I think any iWatch product is going to take a
similar approach and allow Tim Cook and the team at Apple to explore the
wearable technology space.
The Macalope would argue that the Apple TV was more than an incremental
improvement on existing TV boxes, but, more to the point, it’s a terrible
example to use when speculating on what an Apple smartwatch might be like. The
key thing that’s hamstrung the Apple TV from being transformative has been
licensing rights with content owners. How is this likely to be an issue with a
smartwatch?
As long as they can sell that story to the press and everyone goes along with
it (as opposed to the fun they had around the launch of their own mapping
product) …
MUST! JAM! IN! MAPS! REFERENCE!
… the iWatch is going to be a successful second tier product for Apple.
It’s fine to have your own belief system. But it’s important to recognize
when it’s a belief system rather than something based on empirical evidence.
How well would an iWatch do? Well, it’s a little hard to tell when we know
absolutely nothing about it. But, as Apple’s track record has shown, basing
it off of existing products in the same market is a logical fallacy.
Good news, everyone! CNBC thinks that Apple’s position is now sound enough to
ask the question “Apple on Comeback Trail?”
Wait, comeback from … what? Comeback from being the largest, most successful
technology company in history? Boy, that is tough to come back from, isn’t it?
The Macalope doesn’t even know how a company could do that. Having to wade
through all that cash alone must be almost impossible.
CNBC brings on a “pro-Apple” guy and an “anti-Apple” guy because the gods of
balance must be appeased. Who’s the “anti-Apple” guy? New Constructs CEO and
Forbes contributor [slide whistle] David Trainer, a guy whose target for
AAPL is $240/share. Even the host seems to be saying “Are you for real?”,
although he too gets his facts wrong.
Host: “Even the sell side is saying this week, to move the shares down
meaningfully, you’d really have to see a much bigger erosion in their installed
base.”
What erosion has there been to date?! More people buy iPhones every year and
while Mac sales were down slightly year-over-year in the last quarter it’s
because so many people bought iPads instead. But such is the state of perception
about Apple on Wall Street.
Host: “Do you think that’s going to happen?”
Trainer: “I think that’s coming, I think we already see that coming. … Unless
they can come up with some new great revolutionary product, which I don’t see
coming …
“Coming up, a man who should be using safety scissors doesn’t see Apple
shipping new products. We’ll give him 15 minutes of air time.”
… I think the returns on capital for the company are going to revert back to
a more normal level, which implies a price in the range of 240 bucks or so.
The “pro-Apple” guest, Capital Advisors’s Channing Smith, should be given a
Daytime Emmy for not falling out of his chair laughing.
Smith: Um, yeah, but to get to that price you’d have to see Apple lose
tremendous market share and margins collapse. We just don’t see that. …
everyone’s starting to look toward the fall, to the new releases of the products
… there are opportunities out there.
Well, you see that because you actually listened to the words coming out
of Tim Cook’s mouth instead of stuffing hamsters in your ears and consulting a
Ouija board.
Trainer: I think it’s sometimes hard to get people to focus on the future
than the past and if you look at the future I think it’s clear that Apple’s
going to have a return on capital that returns to a more normal level.
So, the disagreement here succinctly defines the difference between Apple
bulls and bears. The bulls think Apple will release new products in the future,
you know, like Tim Cook said the company would. The bears think that’s it,
Apple’s only ever going to make iPods, iPads, iPhones, and Macs for the rest of
its existence. Which, OK, you can have that opinion, it’s a free country, but
it’s a little weird when the whole point of the segment was to talk about Apple
in light of its hiring of Paul Deneve specifically to work on special projects.
This isn’t Trainer’s first time in the limelight, which unfortunately does
not include actual lime. In the comments on this short piece about Trainer by
Philip Elmer-Dewitt back in June there are some amusing footnotes to Trainer’s
expertise. First there’s an uncomfortable exchange between Trainer and someone
who apparently used to work with him. “He’s a dunce. He’s one of the least
intelligent people I’ve ever had the misfortune to work with. He was a joke who
everyone just laughed at.”
Second, however, and more damning, Trainer ignores the specific points made
by people questioning the assumptions he uses in his model and instead leaves
this self-serving comment:
Of course, people will try to poke holes in my financial analysis, but that
appears to be an attempt to divert this dialogue away from the real issue stated
above: Apple’s future.
Uh, no, TV boy. When someone points out that your input for return on
invested capital is five times less than Apple’s current return on invested
capital and you decline to address that, instead making vague statements,
that’s diversion.
Here’s an interesting insight into the application of Trainer’s inviolable
model, about which questions will not be taken. In May of 2012, when AAPL was at
558, Trainer was yelling “Buy!” A year later the stock is at 420 and he’s
yelling “Sell!” What’s the bit that was flipped? Trainer’s personal view on
Apple’s future. He changed the inputs and got different results.
There seems to be only one reason he’s on TV. It’s because he has a fringe
view on AAPL’s valuation.
Another week, another master plan for how Microsoft is going to become
relevant again.
“How Microsoft could rule consumer electronics” (tip o’ the antlers to Tay
Bass).
That’s our old pal our Internet acquaintance lump of congealed meat product
Mike Elgan writing for Computerworld and telling us how you dummies don’t
appreciate the gifts that Redmond has spent so much time spinning, like gold
from flax.
Let’s face it. In the consumer electronics space, Microsoft is floundering.
But their lack of success isn’t the result of their products, and it’s
definitely not the result of their technology.
You people don’t deserve a nice Surface! Philistines!
So what does Microsoft need to get back into the hearts and minds and wallets
of consumers?
The Microsoft moonshot
Wait, another Microsoft moonshot? Windows 8 and the Surface were
Microsoft’s moonshot. Microsoft’s moonshots are like the Soviets’, full of
explosions and smash landings into their destination.
Consumers don’t know it yet, but every major company in the industry knows
that the desktop, TV and boardroom computer of the future is a big-screen
touch-, voice- and in-air gesture-based computer.
Uh … suuuure. [Backs slowly toward the door.]
What if Microsoft shipped that future years ahead of everyone else?
Which it could totally do because Microsoft!
So, Computerworld is now publishing Microsoft fan fiction. Good to know.
Mike thinks the ticket is Microsoft’s latest version of the device formerly
known as the Surface and now called the PixelSense, which features:
… a brand-new, high-performance 3M screen, also unveiled this week, that can
handle not just 10 simultaneous fingers on the screen, but 60!
You know how you go to a board meeting and everyone wants to put their hands
on a screen at the same time. To, uh … er …
Microsoft!
Microsoft could make all its hardware, and the mobile hardware made by its
Windows and Windows Phone partners, to automatically and instantly interact with
the table. … the table would be a giant-screen station for Microsoft-powered
mobile devices.
This is the same Mike Elgan who waxes poetic about how awesome the cloud is
and laments how the haters don’t seem to get that. Mike, if you have your data
in the cloud, you don’t need to dock the device.
Who wouldn’t want this?
It’s the perfect accompaniment for all those Microsoft devices you don’t own!
Microsoft could probably ship such a table for $5,000 or $6,000 each—well
beyond the reach of the average consumer.
So it’s a sure-fire winner!
But even at a price many times higher than a low-cost PC, the existence of
the product would enhance the Microsoft brand.
Ah, so it’ll be just like the Soviet moonshot program: expensive, late, and
of little value to the general public.
How many teenagers buy an iPod touch because when they go wide-eyed into the
Apple Store and gape at those iMacs and Retina iPads and MacBooks they know
that’s the direction they want to go in, and they know Apple is the company they
want to be associated with?
A Retina iPad starts at $499. Apple doesn’t waste its time on products that
people aren’t going to buy.
Everybody would be talking about Microsoft’s table instead of Google’s
Glasses or Apple’s non-existent wristwatch.
No, they would not. Microsoft has been shipping the PixelSense for five years
and no one other than technology nerds know it even exists. Making it a dock for
devices few people own isn’t going to change that.
Sorry, Mike, your plot just isn’t believable. Just like most fan fiction.
Follow me on Twitter @sajilpl
