Category: Business

Horace Dediu thinking about the Apple’s M7 chip:

Perhaps this is why Apple chose to describe the iPhone 5s as “forward-thinking”. The M7 and the Touch ID are like research projects whose actual value will be realized at some future time, in probably different contexts. The M series of chips may become Apple’s “low end” microprocessor as the A series climbs the trajectory into core computing tasks (read: phone, tablets, TV, laptops).

M might be the chip for the wearable segment, woven into a whole new fabric of uses and jobs to be done.

Writing on, where else, Daring Fireball:

The 5C is, effectively, an iPhone 5. Same A6, same camera, same just about everything — except for the most obvious difference, its array of colorful plastic shells.

In marketing, what looks new is new.

This is the first year when last year’s specs remain good enough to serve as the mass market new iPhone. Take a look at today and note which new iPhone appears first: the 5C, not the 5S. Which phone did they show a commercial for during the event? The 5C.

Writing on Asymco:

In summary I’d say that the C signals the beginning of the “good enough” phase which was also evidenced by the increasing mix of the older models during the last year. Financially it shows up as lower ASP, which, as the graph above implies, I expect to drop to $600 and lower during the next year. Margins may not be affected much as the C is still very highly priced relative to its cost of production.

Finally, if the good enough alternative is being “pinned” by Apple as the mid-range it also begs the question of why there isn’t a specific “low end” version. It took six years for Apple to fork the product into two variants. Maybe it will take another year for it to stretch to a third.

Writing on his stratechery blog:

As I wrote last week, strategy is about making choices, and Apple has decided to not even pretend to pursue market share, but instead embrace their up-market status. As long as they retain their app advantage, this will obviously be a profitable choice.

More importantly, it’s Apple doubling-down on what they are best at. I have railed against Blackberry and Nokia for trying to compete in areas they weren’t great at (OSs), instead of focusing on their strengths. Apple is doing just the opposite. They are avoiding a market share fight, which is ultimately about price and compromise, and are instead focusing on the experience of using their products and the advantages accrued by being fully integrated from the chipset to iTunes.

Ben Thompson writing about Microsoft acquiring Nokia nails it, I think:

I theorize that Nokia was either going to switch to Android or on the verge of going bankrupt. (I suspect the latter: part of the deal included €1.5 billion in financing available to Nokia immediately). And, had Nokia abandoned Windows Phone, then Windows Phone would be dead.

Thought-provoking post:

Limiting design choices to things that can scale infinitely at near-zero cost is a recipe for making mediocre products.

He has a bunch of good points there. Your situation will probably be different but it makes sense to try to look at the points he makes from your perspective.

Kathy Sierra writing for gapingvoid:

“The key to understanding (and ultimately benefitting from) true “customer loyalty” is to recognize and respect that customers–as people – are deeply loyal to themselves and those they love, but not to products and brands. They are loyal to their own values and the (relatively few) people and causes they truly believe in. What looks and feels like loyalty to a product, brand, company, etc. is driven by what that product, service, brand says about who we are and what we value.”

Ryan Singer sums it up nicely. Some points I particularly liked:

The reason I am making a product is to give people capability they lack. That’s why they pay for it. The gap between the person’s current situation and the situation they want to be in defines value for them. They hire your product to do a job. The job is their definition of progress from here to there.

Some people think patterns are formal things written in a book or collection, but they aren’t like that. They are natural and spontaneous just like spoken language. We learn a language by hearing it and speaking it. Words, phrases, and constructions come to mind as if by magic.

This works against you when your work isn’t goal-directed. R&D projects and exploratory design don’t benefit from narrow problem definition. Platform and infrastructure projects are different in kind from product projects because the platform is meant to enable products on top of it, which are themselves targeted at specific situations.

Ben Thompson excells again:

But in reality – and this touches on many of the themes of this blog – an overt focus on product similarities misses many crucial factors that, in my opinion, make iPhones and iPads very different. In fact, I believe the business we should be looking at to understand where Apple might take the iPad is the iPod, not the iPhone.

If you are interested in business thinking at all, read it.

I would love for Horace and Ben to do a business podcast together.

Another great post by Ben Thompson over at stratēchery:

Steve Ballmer restructured Microsoft yesterday as a functional organization. The immensity of this change can not be understated, nor can the risks. Ultimately, I believe the reorganization will paralyze the company and hasten its decline.

Read it.

Ben Thompson over at stratēchery:

It’s games like Candy Crush Saga – free, with in-app purchase – that are fueling much of that $10 billion. According to App Annie, for the iPhone:

– 95 out of the top 100 grossing apps feature in-app purchase
– 79 out of the top 100 grossing apps are free to download

The numbers are broadly similar on Android, with an even sharper skewing towards free: 96 out of 100 of the top 100 grossing apps are free to download.

Tomáš Baťa

For my czech readers Tomáš Baťa needs no introduction, for the foreigners here: He is czech version of Henry Ford, for shoe industry, and more morally grounded one.

Nice people in Tomas Bata University Library, and Tomas Bata Foundation with the financial support of Tomas Bata University in Zlin has produced free audiobook. Profesionally read by Alfred Strejček in czech version and by Josef Guruncz in the english.

Download the czech or english version of the audiobook (MP3, 770 MB).

Ben Thompson over at stratēchery:

The truth about the greatest commercial of all time – Think Different – is that the intended audience was Apple itself. Jobs took over a demoralized company on the precipice of bankruptcy, and reminded them them that they were special, and, that Jobs was special. It was the beginning of a new chapter.

“Designed in California” should absolutely be seen in the same light. This is a commercial for Apple on the occasion of a new chapter; we just get to see it.

See also, the beautiful web page for this mission statement by Apple.

Des Traynor writes for Intercom blog:

As Jared Spool notes, when teams are designing and building for themselves, they consistently improve the tasks that they do frequently but ignore the critical-but-not-frequent tasks.

He then proceeds to give specific examples. Good reminder.

Via @daeltar

Intuitive statistical calculators, ideal for planning and analyzing A/B tests.

Michael Mace dissecting PC industry:

The PC companies married themselves to the Microsoft-Intel growth engine years ago. In exchange for riding the Wintel wave, they long ago gave up on independent innovation and market-building. In many ways, they outsourced their product development brains to Microsoft so they could focus on operations and cost control. They trusted Microsoft to grow the market. Microsoft is now failing to deliver on its side of the bargain. Unless there’s a stunning turnaround in Windows 8 demand, I think it’s now looking increasingly likely that we’ll see a sustained year over year drop in PC sales for at least several more quarters.

This is an existential shock for the PC companies. It’s like discovering that your house was built over a vast, crumbling sinkhole.

Via @Asymco

Asymco says 45% and adds:

The real problem for the PC vendors is not that they have such low margins–they’ve had low margins for decades. It’s that the volumes which “made up for” low margins are disappearing.

I think CSSmatic is the best gradient and noise generation tool right now.

See also Common Sense: Information Overload Edition

Brent Simmons writing for Macworld:

One of the guys who works on Windows Azure Mobile Services gave me a demo of its support for iOS.

What? Microsoft supporting iOS? What? That isn’t the Microsoft (I thought) I knew.

Once I got over the shock, I expected that I’d have to write code in C# (a Microsoft language), that services would run behind IIS (a Microsoft webserver), and that I’d have to use Visual Studio (a Microsoft developer tool) on Windows, which I don’t have. That would be typical Microsoft, right?

Instead: The code is JavaScript, the webserver is Node.js, and I can write code in any text editor. No Microsoft things. The company even released some related code as open source and put it on GitHub.

(Microsoft? Hello, are you feeling okay?)

In other words, Microsoft noticed the world outside Redmond, and it likes it.

And I like them for liking it. And it doesn’t even hurt.

What I see is Microsoft being scared shitless that they are losing developer minds, that there are now thriving ecosystems that Microsoft does not control and their own attempts of building new fortresses is going nowhere slow. So now they are willing to bend over backwards to look good again. See also all the marketing around IE10 targeted to developers.

I like to see Microsoft doing this, but I don’t view it as “look we are the good ones now”, but as a “look how scared we are”. They have to prove they are actually also good at the new services they offer. We’ll see.

Via Daring Fireball