The iPad Equilibrium
(First published on 8/3/17 on 5ish Links, my newsletter)
One of the bigger “surprises” out of Apple’s earnings a couple days ago was the rebound of iPad growth. It was the first time in three years that the product grew year-over-year sales-wise.
The bigger-picture here is quite clear with the benefit of hindsight: the iPad was one of the biggest product launches of all time, in terms of how many units Apple was able to ship in those early years. This was because many people understood it conceptually from day one — while in practice, it may have been a different product, to the eyes, it was an “iPhone, but bigger”. As such, this led many Apple watchers to believe the iPad sales could be like the iPhone, but bigger.
This was not to be, of course. The combination of many people immediately getting it (both conceptually and literally) and the fact that it turned out to be a product you don’t need to upgrade every year — or even every other year — tricked many Apple watchers.
And we’re just now reaching a point of equilibrium. Some years, the iPad sales will grow. Some years they will not. It sort of depends on a number of factors, like how enticing the new models are, but also how ready people are to try the iPad as their main computing device versus upgrading their PCs. Regardless, Apple will continue to sell millions — if not tens of millions — each quarter. And it will continue to be an amazing business for Apple.
It really is that simple.
Note: this will be the last of my newsletters I syndicate here — at least for a bit. I’ve been experimenting with various content types for different mediums (lowercase “m”), and I just don’t love this newsletter format, heavily built on links, for Medium. So, feel free to sign up for the newsletter here, to keep seeing such content. And don’t worry, 500ish Words will continue unabated :)
Apple’s Billion Dollar Businesses
On Tuesday, Apple said services — the App Store, iTunes, Apple Pay, iCloud and more — generated more than $27.8 billion in revenue for the 12 months ended July 1, making it the equivalent of a Fortune 100 company and larger than Facebook Inc.’s total revenue in 2016.
The company hit the Fortune 100 milestone a full quarter before predicted by Chief Executive Tim Cook, as rising subscriptions to Apple Music, Netflix Inc. and other services lifted services revenue 22% in the June quarter to $7.27 billion. The iPhone is still Apple’s chief moneymaker, but services combined with better-than-expected iPad and Mac sales reduced Apple’s total revenue from the iPhone to 55% in the quarter from 57% a year ago.
How many product lines does Apple have that is bigger than most other entire companies? iPhone. iPad. Mac. (One day, Apple Watch?) And now their first, as far as I know, non-hardware one: Services. Yeah, it’s a bunch of stuff bundled together. But it’s no less impressive. Especially how fast it continues to grow.
Not only is the much-rumored “iPhone 8/iPhone X/iPhone Pro” right there for us all to see (in icon-form, at least), several un-announced features of the iPhone are leaking out due to this. What a blunder by Apple. It’s not quite leaving an iPhone prototype in a bar — but in some ways it’s worse, it’s leaving such information ON THE INTERNET for all to see.
In other words, the iPhone 8 could be as much of a visual leap forward from current-generation iPhones as the iPhone 4’s Retina display was from the original iPhone.
It’s not often I’ll link to National Review, but this post by Kevin D. Williamson is fantastic. I mean, how can you compare Trump to characters in Glengarry Glen Ross (the film version) and it not be?
A few young men waiting to see the show had been quoting Blake’s speech to one another. For them, and for a number of men who imagine themselves to be hard-hitting competitors (I’ve never met a woman of whom this is true), Blake’s speech is practically a creed. It’s one of those things that some guys memorize. But Blake does not appear in the play, the scene having been written specifically for the film and specifically for Alec Baldwin, a sop to investors who feared that the film would not be profitable and wanted an additional jolt of star power to enliven it.
That’s some fine irony: Blake’s paean to salesmanship was written to satisfy salesmen who did not quite buy David Mamet’s original pitch. The play is if anything darker and more terrifying without Blake, leaving the poor feckless salesmen at the mercy of a faceless malevolence offstage rather than some regular jerk in a BMW. But a few finance bros went home disappointed that they did not get the chance to sing along, as it were, with their favorite hymn.
These guys don’t want to see Alec Baldwin in Glengarry Glen Ross. What they want is to be Blake.
Trump is the political version of a pickup artist, and Republicans — and America — went to bed with him convinced that he was something other than what he is. Trump inherited his fortune but describes himself as though he were a self-made man.
He has had a middling career in real estate and a poor one as a hotelier and casino operator but convinced people he is a titan of industry. He has never managed a large, complex corporate enterprise, but he did play an executive on a reality show. He presents himself as a confident ladies’ man but is so insecure that he invented an imaginary friend to lie to the New York press about his love life and is now married to a woman who is open and blasé about the fact that she married him for his money. He fixates on certain words (“negotiator”) and certain classes of words (mainly adjectives and adverbs, “bigly,” “major,” “world-class,” “top,” and superlatives), but he isn’t much of a negotiator, manager, or leader. He cannot negotiate a health-care deal among members of a party desperate for one, can’t manage his own factionalized and leak-ridden White House, and cannot lead a political movement that aspires to anything greater than the service of his own pathetic vanity.
Trump is a mirror in a house of mirrors. He’s the American so many people want to be — or think they do, because he’s told them they do. Even though he’s not even that person. Doesn’t matter. His perception of himself is our reality.
And now it’s actually our reality.
Eating It Up
The cooktop and book sketch an emerging road map for the social-fueled media company: Tasty — and, in a larger sense, BuzzFeed — is trying to become something like the Disney of the digital age, an all-encompassing lifestyle brand that creates content, experiences and products for an audience hooked on phones.
“After the cookbook, I realized that Tasty was neither an experiment nor just a really popular Facebook page with lots of ad revenue,” said Ashley McCollum, Tasty’s general manager. “Really what we’re seeing is how to make a business out of massive intellectual property that was built digital-first. It’s the same model as old-media networks — you make a movie that people love, and then you build a theme park and extend that to products and everything else.”
Having come from the media world, I’m skeptical of trying to replicate the older models (ad-based), just at larger scale. But this is interesting. Content that builds up a brand to the point where you can start other, potentially more lucrative businesses on top of it. Disney makes its real money from theme parks and merchandise (well, and above all, ESPN), not the movies themselves. But those movies are what set the foundation…
Brad Stone, Sam Kim, and Ian King:
The figure most closely associated with Samsung’s global rise is Lee Kun-hee, the son of founder Byung-chull and Jay Y.’s father. Kun-hee, who became chairman in 1987, was known as reclusive but charismatic. Under his guidance, Samsung invested in massive semiconductor and display-panel factories, prodding engineers to overcome the company’s early reputation for creating subpar knockoffs. In 1993, with sales of consumer appliances flat, he admonished executives to “change everything but your wife and children.” A few years later he commanded underlings to collect 150,000 defective cell phones into a pile and set them ablaze. Although not great for the environment, it sent a clear message about quality control.
Despite his eccentricities, Kun-hee is widely lionized. In 1997, after the value of Samsung Electronics fell to $1.7 billion amid a wider Asian financial meltdown, he jettisoned peripheral businesses and doubled down on chips, screens, and phones. Within a decade, Samsung Electronics’ market value had grown sixtyfold. Song Jae-yong, a professor of strategy and international management at Seoul National University Business School, calls Kun-hee “one of the great business leaders of the 20th century.”
The consumer-facing smartphones and phablets get much of the attention — and the cell phone bonfire was a brilliant maneuver — but it was the early bet on semiconductors and displays that is really paying off, quite literally, today. Though, occasional battery fire aside, there are clearly still some other issues:
Koh, who has been at Samsung for 33 years and has the top-floor office to prove it, says he knows that becoming a leading software developer will require Samsung to attract creative, entrepreneurial employees. His pitch for Bixby, though, demonstrates some of the company’s familiar culture issues.
Koh asks a reporter, “Do you touch your assistant? Your secretary?”
Reporter: “I don’t have an assistant. Also, it would be a personnel violation.”
“Exactly! Touch is not allowed. Just say something. So if we change our interaction of touching [the phone] and [use our] voice, that would be perfect.”
Cut that content up. Repackage it. Keep it short.