Sep 102014
 

I admit that I’ve been cooly analytical about most of Apple’s recent product announcement. Part of that may stem from the fact that it’s usually pretty clear what Apple will be announcing based on their refresh cycle; part of it may be that every detail of Apple’s upcoming products are called out by intrepid bloggers months ahead of time. The end result is that there are usually few surprises remaining by the time Tim or Phil take the stage for the official announcement. Yesterday, Cook’s “One more thing” brought back a feeling I haven’t felt watching an Apple event in a long time: joy and astonishment.

There are numerous things that make the Apple Watch unique in a sea of prematurely ejaculated shartwatches, but I believe the most impressive thing about it is the way Apple has – again – reinvented the ways we physically interact with technology.

The Digital Crown, the most vital interaction a user will have with the device, is a variation of Apple’s enormously popular iPod clickwheel, which is probably why Cook in his presentation and Apple on its website referenced it as a parallel innovation. The original iPod introduced the concept of rotation for input selection. Something about that interaction is so familiar that it’s ingrained, whether you’re adjusting your thermostat (which I’m sure is why Nest (and iPod) founder Tony Fadell used it), dialing a rotary telephone  – or obviously setting the time on your watch. Apple used this near-universal familiarity and incorporated it into cutting edge technology in a way that’s truly useful. Pressing the Crown serves as the home button; “winding” it serves as a selector, a means of zooming content and doubtless myriad other uses that will make themselves known the closer we get to an actual product launch.

The button below the Digital Crown, for which I haven’t seen a proper name given yet, is analogous to the Menu button on the original iPod; it’s an input that allows an entirely different set of shortcut and contextual options separate from the Crown. It’s a pairing with which users should be familiar – like the right-click a mouse. If you agree with the premise that numerous gestures on the face of a smartwatch would be not only confusing by obstructive to content, it’s a smart way to create selection options away from the watch face.

Apple also introduced a deepening of their touch metaphor  – literally – with the addition of the Force Press. Instead of trying to work with interaction paradigms that wouldn’t make sense on such a small screen, Apple took one of its most successful input methods and expanded it along the same axis of interaction. A tap will select; a tap and push will bring up an entirely different set of functions. Again, this is a way to create thousands of interaction options using just a few familiar, unobtrusive movements.

Taptic feedback is the way users will receive notifications through what Apple is calling it the Taptic Engine. It’s a gentle tap emanating from the backside of the watch to your wrist. For a device as body-personal as the Apple Watch, its a suitably subtle method of notification – miles away from the beeping and flashing that seems to be taking over my iPhone. Upon hearing about the feature, my first reaction was “Of course that’s how notifications should work.”

These interaction technologies are a strong reflection of Apple’s greatest skill as creators of tools. They think deeply about how people use things and design their offerings around this use. Back when the Moto revealed its 270 360, I wasn’t as impressed as a lot of people about the fact that it was round (turns out it isn’t). I wrote:

Instead of letting history dictate or limit the things it can do because it’s worn in a place historically occupied by a watch, maybe Motorola should think about what they want the device to do and let those things dictate what it looks like. I’ve heard of a certain Apple designer who thinks of what he works on that way and he’s regarded as pretty good at what he does.

The Apple Watch is not a hollow harkening – it doesn’t run on references devoid of practical use. It’s Jony Ive’s reimagining of how a watch should work based on how we use technology. I remember listening to Moto’s head designer talk about how they were “reinventing the modern-day timepiece,” and I really hope they have those guys on suicide watch. Apple just announced its smartwatch – amateur hour is over.

 Posted by at 12:42 pm
Aug 132014
 

Because I’m a tech fan with a vested interest in keeping competition alive and well, about a year ago I offered Samsung some advice: start copying Apple again.

Obviously Samsung are big fans of my work.

Obviously Samsung are big fans of my work.

At the time – and until recently – Samsung has been taking a beating by the reviewerati for a lack of…whatever the reviewerati thought Samsung had been contributing to the consumer electronics market before 2013. Disappointments included stifled yawns at the release its flagship Galaxy S shartphones and the Galaxy Gear series of wearable devices that no one knew they wanted, mostly because they didn’t. The company’s books started to feature smaller black numbers: profits for the company are coming off their third consecutive quarter of decline and are sitting at a seven quarter low. Because Samsung have never really done anything in the way of design very well on its own, and because the court system designed to protect intellectual property in this country is a joke, I didn’t see a downside to Samsung going back to its larcenous ways. I guess the company was listening.

It's not an S II level clone, but it ain't far off

It’s not an S II level clone, but it ain’t far off

The Galaxy Alpha is Samsung’s triumphant return to the well. I know, I know: rounded rectangles yadda yadda. A lot of other phones have taken as much of a design cue from the iPhone 5/5S as the Alpha does, but it’s just that Samsung was so set on distinguishing itself from all the good-looking hardware, no doubt muttering “We don’t have to copy the iPhone. We don’t have to copy the iPhone” to themselves repeatedly the whole time. It’s good to see the company putting out a product so comfortably in their wheelhouse.

A couple of things struck me funny about Samsung’s announcement:

Timing: Just far away enough from Apple’s event to not seem like a freeze, but with a careful mention that the phone would be available in “early September” for both the millions of people who were holding out for Samsung’s latest before buying an iPhone 6.

Concessions: Samsung’s Galaxy S series’ most notable feature used to be its pocket-busting display. Not so with the Alpha, which will feature a half-inch smaller 4.7” screen. Unfortunately, those monster screens were the thing that allowed larger batteries, which in turn allowed Samsung to make snarky commercials about the iPhone’s battery life. The Alpha’s battery will be a full 50% smaller, which is also why it will have a lower-resolution 1280 x 720 screen. It’s a shartphone that gets top billing for its primo construction, but then compromises on those Fandroid-boner-inducing specs to achieve that “premium” feel. Oh – and they’re also keeping the dimpled backside aka the Fat Man’s Ass. Kind of a mixed message there, Sammy.

This is where Samsung finds itself: not innovative enough themselves to design something people will want to buy, they’re going back to doing what they’ve always done – that thing that defines them as a company.

 Posted by at 9:32 pm
Jul 232014
 

Apple announced its 3rd quarter earnings last night and despite posting the most aggressive earnings growth since 2012, your troll headlines center around the decline in iPad sales for the second consecutive quarter. I’m not going to say Apple wouldn’t want the 15 million unit sales every quarter, but the plateauing of the iPad is inevitable. The reasons are pretty straightforward.

Smartphone : Necessity :: Tablet : Luxury

For everything that’s great about iPads, they are still “tweener” devices, which is why a certain contingent of clueless tech pundits couldn’t see the need for them – until they started selling by the millions. Keeping in mind that iPhones and iPads are running the same OS, the primary difference between the 2 devices comes down to telephony and real estate. If people can only afford 2 devices, chances are those devices are going to be a desk/laptop and a smartphone. With the almost-certain announcement of a larger screen iPhone, the real estate delta shrinks even more and the iPad’s size becomes even less of a selling point. As the market for tablets continues to saturate, there are still tens of millions of people that need a smartphone, compared to the millions who want – but will never get – an iPad.

The iPad Isn’t Subsidized

Unlike the iPhone, which can be subsidized over the course of a 2 year contract, you pay for the full value of an iPad up front. Even though, according to Apple, only 25% of iPhone sales are subsidized (which is excellent long-term news), that’s still a significant number of people who were able to afford an iPhone they may not have been able to otherwise.

What Would Act 3 Even Look Like?

Looking at the history of the iPad’s evolution, there are 2 major milestones: one pioneered, the other conceded. The Retina Display elevated tablet displays to a new level, making everything else look 8-bit in comparison. With the iPad Mini, Apple took a cue from Android OEMs and admitted to the market that a 7” smaller tablet was worth a product entry. With the Retina Mini, Apple combined both these achievements into a truly remarkable product. Aside from Retina and Mini, everything else about the iPad was about thinner, lighter, and faster. I think the Retina Mini represents “peak iPad”. I really can’t imagine another major innovation within the iPad product line. Then again, Apple is the company that translates surprise and delight into billions of dollars; I’m just a dude raking in literally tens of AdSense pennies a year writing about them. If anyone can revolutionize the tablet – again – it will be Apple.

It may be that the iPad has peaked as a product, but I believe it still has several iterations of relevance left. Even though its market will always be smaller, and it may be shrinking, it will be formidable for at least the next 5 years. With features in iOS 8 and Yosemite like Continuity and Handoff, owners of Apple devices will gain several more compelling reasons to own an iPad. We’re still decidedly in a post-PC world, despite what some crank-yankers may try to tell you.

Oh – and Macs out-shipped PC this quarter. Again.

 Posted by at 10:05 pm
Jul 082014
 

I’m sure my readership is all broken up about Samsung’s latest earnings guidance, which is warning that the company’s operating profit has dropped 24% YoY to a 2 year low. Just in case you thought the anticipated $7.1 billion in operating profit was one of those “YoY anomalies”, that figure is also down 16% from the previous quarter. It appears that pundit-dubbed “innovation” combined with a budget-busting campaign of negative advertising and flagship BOGOs haven’t been enough to keep the bends from continuing to bubble up through the company’s bloodstream. The news was so bad that Samsung actually felt the need to explain its performance in a statement issued with its 2Q guidance. The excuses, which range from the appreciation of Korea’s currency to increased competition in India and China in the “throwaway” shartphone category, belie a deeper concern that Samsung has had its 15 minutes. So what has changed since those glorious salad years of 2012 – 2013? I have a couple of theories.

A Case for Defending Your Patents

This is what the Galaxy S (the S II) looked like in 2011:

samsungapple-300x267

This is what it looked like (the S III) in 2012:

Screeny Shot Jul 8, 2014, 3.41.28 PM

Apple filed its “home field” infringement suit against Samsung on April 18, 2011. I think you could make a case that the S III was the first phone whose design deviated meaningfully from the iPhone. Some of this was to accommodate the larger 4.8″ screen, but some of the design choices, including the body’s exaggerated curvature and the choice of materials, was in response to the threat that Apple’s legal action represented. Since it filed and subsequently prevailed against Samsung, the company never went back to slavishly copying the hardware features of the iPhone.

The trial itself also scarred the Samsung brand. Between borderline illegal tactics, which included destroying evidenceviolating court-ordered prohibitions and Samsung’s obnoxious defense attorney posturing, the size of the jury award gives an indication of how put-off the U.S. jury was by the company’s antics. Even though Judge Lucy Koh continues to make a mockery of Apple’s jury verdict, which was rendered almost 700 days ago, the deterrent effect of a relentless Apple combined with the image of Samsung as an unethical monster has irreparably tarnished the company’s brand – at least in this country.

The Spaghetti Stopped Sticking…If It Ever Did Stick

So what does a company that is strongly discouraged from directly copying a competitor do for its next act? They innovate shit out a bunch of half-baked ideas into the market, of course! In addition to continuing to inflate the size of their shartphones and tablets to include every diagonal measurement imaginable, Samsung also jammed sensors, music streaming services, basically anything it could use as a presentation bullet into their hardware. I’d say that effort reached its peak with the release of the S4, whose bizarre presentation was a microcosm of its feature set. “Features” like Eye Tracking, Air Gestures and Air View were demoed like they’d be useful only to be universally panned as anything but. Because quoting myself gives me a boner:

The Galaxy S4 represents an impasse for Samsung. No longer able to rip off Apple’s features – as much – and not being able to do anything with the hardware beyond what the tech press has ubiquitously referred to as “evolutionary”, Sammy is left to pack shit features and a couple of useless sensors into their kit.

After the S4, things deteriorated. There was the Pebble, a music player/S III accessory that forgot that the market for those devices was already incorporated into smartphones. Then there was the single greatest indication that Samsung was deliriously desperate to be viewed as an “innovator”. In what can be traced back to a single blog post, Samsung and the rest of the technorati got a whiff of a rumor – that Apple was making a smartwatch – and decided to base a product on it (innovation!). The resulting Galaxy Gear, now in its 3rd iteration, is just as useless as it was when version one was released.

The Low End Is Getting Pinched

One of the excuses Samsung laid out as contributing to its shrinking position actually is true: Samsung no longer has command of the low-end shartphone market. Coming most notably from Chinese manufacturer Xiaomi, Samsung is not only face-down in the profit-fetching segment  dominated by Apple, it’s now facing competition in the much less profitable segments it used to dominate. One thing that bad horror movies has taught me is that it sucks being the center segment of the human centipede. Especially on taco night.

In the midst of all this red ink is Apple, a company that just consistently puts out the best consumer electronics experiences on the planet. If the latest WWDC is any indication, they’ve just started hitting the gas on 2014. I’m looking forward to seeing several more pairs of treadmarks across the Samsung logo in the coming months.

 Posted by at 4:38 pm
Jun 262014
 

I realize this post is coming the day after Google’s 2014 I/O keynote, but I just woke up from it. I give Apple a little bit of shit for the way they trot out 26 3rd party developers during their keynotes, but Jesus Christ if Google did not just bore the shit out of people.

So what did they announce? I think the most successful part of the presentation was what they didn’t announce, namely a Google-branded instant paperweight à la the Nexus Q or the Nexus 7. Then again, they did talk a lot about their current crop of shartwatches, but at least there’s a bit of distance between the Google brand and abysmal failure.

Speaking of not talking a lot about something, can we get a shout-out for Google Glass?

/crickets

I guess we can’t. The darling of concept videos about the future of IRL tech interaction and the one-time twinkle in Sergey’s and Larry’s eyes was only mentioned once in passing. To be fair, it may not be the case that Google is trying to distance itself from what every reasonable person on the planet is panning as a dorkified privacy bomb; it’s entirely possible that someone dangled something shiny in front of the presentation team and they collectively forgot it existed. It’s not like they didn’t have the time to plug it.

Come to think of it, Google seems to be forgetting stuff it’s done at previous I/Os, then repeating it at the next one:

  • 2011’s Android Update Alliance, a really, really, really nice way of asking OEMs to abide by Google’s UI guidelines, is now the Android Silver Initiative, which from what I understand added another “really” to the request.
  • Google spoke at length about Google Health. Wait – that got killed during one of Google’s “You Get What You Pay for” beta purges 2 years ago. Now it’s Google Fit, not to be confused with Apple’s Health and HealthKit (you can be sure that developers and service providers won’t).
  • The Open Automotive Alliance, which was basically a sign-in sheet of everyone making cars and everyone in technology not named Apple now has a name (and not much else): Android Auto. It – surprise! – will be phone based, primarily use voice as the input and will have its own APK. No release date for anything because those aren’t required when you’re trying to freeze the development partners of a competitor. The assumption that any self-respecting manufacturer would give a shit about what Google’s doing in a car when they could partner with Apple is still pretty damn funny.
  • And this year’s Rasputin Award goes to Android TV, which is Google’s fourth attempt to break into the living room. I can’t imagine OEMs are too excited about the prospect of getting kicked squarely in the balls five times in a row, but I might’ve learned after the second or third time, so what do I know?

Maybe Google could retain the services of a consultant to help keep their initiatives to 1 or 2 iterations. I happen to know a guy.

memento

But back to somewhat new stuff, chief among the announcements was the new version of Android dubbed L-Word. There was speculation that the candy-based theme that had come to define major Android releases was dead, but I guess they just haven’t signed the licensing agreement with the L-sweet’s manufacturer like they did when Kit Kat whored for Google the last time around. I, of course, have some suggestions for 5.0:

  • Laffy Taffy: A whimsical take that echoes Android’s approach to device compatibility. “Your phone’s only 6 months old and isn’t getting the most recent version of Android? That’s hilarious!”
  • Lemonhead: A double entendre that describes a defective product and the facial expression made by someone biting into the candy, which is similar to that of a person who first discovers the amount of crapware installed on her new Android phone.
  • Life Saver: Because calling Android a platform secure from malware is as accurate as calling a piece of candy shaped like a life ring thrown to you when drowning a life-saving device.

One thing that is new is the Android Runtime, or ART, the virtual machine that replaces the Dalvik runtime Google…errr…”borrowed” from Oracle. I suppose this will limit the scope of the lawsuit Oracle is ultimately going to win against Google to devices running versions of Android from just the first half of the alphabet.

There was also an overarching theme of “one experience for all devices” which may or may not be a Microsoft slogan. Let’s see how quickly Google recoils once it gets a taste of Redmond’s stunning level of failure in trying to achieve that pipe dream.

 Posted by at 4:27 pm
Jun 252014
 

The closest analogy I can come up with to describe the Amazon Fire Phone presentation is that it was like watching someone stroke a guitar perfectly tuned on 5 out of 6 strings. There was the inclusion of the genuinely-useful Mayday feature into the phone – and then there was the bizarre backstory behind the 4 camera head-tracking feature – complete with a video appearance by a creepy mannequin head. There was Firefly, which made 100 million objects identifiable by the phone – and then there was the $300 starting price. I was alternating between nodding for 10 minutes and shaking my head for the next 10. 

I’ve heard it articulated by many pundits that – for high-end product categories like the iPhone and iPad – it would take an absolute home run to compete. Attacking the low end is a strategy, but any Android OEM not named Samsung will tell you it’s not a very profitable one. The Fire Phone cuts an impressive swath of air but absolutely corkscrews itself into the ground.
“But,” I hear people protest “Amazon isn’t competing with Apple; it’s offering a way to more efficiently pipeline its wares to consumers!”
Is it giving the Fire Phone away?
Then no, it’s not.
For the Fire Phone to be an effective way for people to spend more on Amazon’s services require either 1. A phone significantly cheaper than the iPhone or 2. A phone so feature compelling as to justify an iPhone-like price. The Fire Phone has some intriguing features, but blooping singles isn’t going to win Amazon any share against a company that clears the fences every year. People aren’t going to be mainlining Prime if they don’t buy the phone.
You could see this same type of not-compelling-enough competitor to an Apple product 3 months ago when Amazon presented the Fire TV. A snazzy voice command feature and some slick device specs were soiled by a UI that heavily favored its own content at the expense of all content available. There’s already a device serving content from a siloed ecosystem – it’s called the AppleTV, jackasses. Fire TV’s search was a feature perfectly poised to attack a shortcoming of Apple’s product. Instead? A swing and a miss. And then there’s the creepiness factor.
What was the point of the 4 cameras again? To track your head in space even if one or two of the camera was obstructed? Why the hell do you need to track someone’s head to do something that can be accomplished by tilting the phone? Was Bezos asleep during the whole “this is how the NSA surreptitiously takes control of your smartphone” thing when he dreamt up a phone with 4 front-facing cameras that leer at you constantly? By watching him gleefully go on about discerning people heads from inanimate ones, you’d never know it. People don’t want to socialize with people who have cameras strapped to their faces and people don’t want a smartphone that is constantly tracking their faces and recording their voices  so they can buy cheap Lightning cables more efficiently.
So the Fire Phone, much like the Fire TV, is a bizarre conflagration of features that delight, then puzzle, then creep you the fuck out. I’m starting to think of Amazon as Google with higher-end kit and faster delivery.
 Posted by at 5:04 pm
Jun 032014
 

Did you see the WWDC keynote yesterday? Such a disappointment. No new hardware – Apple’s presentation even had a guy onstage coding. The market took notice too, shaving a total of $7 off the share price by the time the yawning stopped.

Above is the impression you’d get about the presentation from much of the mainstream tech press. Those people are idiots. Yesterday’s announcements, in my opinion, mark the most important in WWDC’s history. I’d further argue that this keynote was one of the most important Apple has ever put out. My reasons, in order of increasing importance:

1. Apple totally rewrote their development language.  Objective-C, the language that launched millions of apps in iOS, has been replaced. Apple took the bedrock of its mobile device success and detonated it, replacing it with the faster, simplified Swift. That this announcement is the lowest rung on this list should tell you how paradigm-shifting the sum of them are.

2. Apple announced updates to the Mac OS and iOS that answer the question of how the Mac OS would become iOS: it won’t. Continuity shows us that the experience of each OS, while individually different, will be seamless when used together. Start an email on your iPhone, finish it on your Mac. Answer a call on your iPhone from your iPad. Steve Jobs’s “car” was never intended to replace the “truck” in one step. Yesterday Apple announced how it would transition from the desktop environment to the mobile environment.

3. Apple just took all the significant chains restricting mobile app interplay and broke them – all of them. Third party developers will now have access to iCloud, Notification Center, Documents, Custom Actions, Touch ID, Sharing Options – even the iOS keyboard can be opted-out. Apps will still have the security of their original sandboxed environment, unlike some mobile OS’s.

Screeny Shot Jun 3, 2014, 10.49.37 AM

In the same vein, Apple also announced the ability to consolidate health metrics through HealthKit and the Health app and partnerships to control home automation devices through HomeKit. These 2 footnotes constituted entire presentations for Samsung (multiple times) and Google at I/O in 2011.

With its keynote, Apple extinguished all the reasons neckbeards use to praise Android and laid groundwork for the transition from OS X to iOS – basically the next decade of computing.

That’s nothing short of incredible.

 Posted by at 10:58 am
May 302014
 

So the other night I was pretty bummed about blowing the whole Beats acquisition thing. One of my good friends, @lophan, shot me a text to try and put it in perspective:

IMG_5178Slowly I realized: that was exactly it. Despite my disproportionately-high 4-letter word count, I do some serious legwork before releasing a post (spelling and grammar notwithstanding). Over the 5 years (!) I’ve been pushing this rock now, most of that time has been spent with Steve Jobs leading Apple, so I grew to look at the company the way Steve would. I make no claims about being able to channel the decision-making of the most influential tech CEO of all time, but the point is when you observe the world through a particular lens, sometimes when what you see isn’t what you expect, it might be time to change the lens. There’s a lot of anecdotal data about the kind of CEO Tim Cook is, and most of this data is qualitative and usually juxtaposed against “how Steve would do it.” Cook is accessible and level as a manager and steely and silent when faced with underperformance; Steve was mercurial 24/7. Cook is more responsive to media pressure than Jobs ever was. Cook made public some of Apple’s charitable endeavors, something Jobs would never do.

Now we know another major difference between the two: their attitude toward acquisitions.

Jobs was a legendary grass roots leader – his goal was to develop all the things that Apple did organically. I’m sure a large part of this was due to his history with “less than responsive” business partners like Microsoft and Adobe or companies that were have perceived to have slighted Apple – like Google. This complete control gave Jobs the advantage of having almost all of the user’s experience with Apple’s products succeed or fail because of what he could influence directly. It was also a decided advantage in leak control, lending that much more gravitas once the inevitable “one more thing” was announced.

Cook appears to have an opposite approach, and I’m going to go out on a limb and say I don’t mind it. He cited the 27 acquisitions Apple made in the last year when defending the Beats deal, which according to Wikipedia’s count, is about 50% of all the acquisitions Apple has made in its history. Whereas Jobs had a laser focus that allowed him to do everything within Apple, it appears as though Cook has a slightly wider focus that includes more acquired help. Jobs was (until shortly before his passing) always the one voice of Apple; Cook’s model gives as much if not more stage and press time to Schiller, Ive and Cue – and rising stars like Federighi. This democratization of success in an environment where every tech maker in the Valley is looking to snipe the hot company is much more healthy for Apple. Cook isn’t shy about cycling back and purging either – witness the Browett debacle or the Forstall ouster.

I’ve admitted I don’t understand the Beats deal, but I realize it may be because I was looking at it through a sentimentally clouded lens.

 Posted by at 2:27 pm
May 282014
 

I guess Apple bought a certain company, one which I had insisted it wouldn’t buy. I wrote 2 posts about it; I talked a lot of shit on Twitter. I was poised to take my victory lap once this week passed without an announcement.

Then it happened. I guess that does it for my career as an analyst.

Why would Apple do something for which several analysts had no explanation? The bottom line is that it doesn’t matter. This is obviously Tim Cook’s Apple. As for my poo-pooing the acquisition using the “Apple-has-the-best-designers-and-engineers-in-the-world-they-can-do-anything” logic, Cook spoke directly to that in an interview with the New York Times:

“Could Eddy’s team have built a subscription service? Of course. We could’ve built those 27 other things [Apple's acquisitions in the last year] since ourselves, too. You don’t build everything yourself. It’s not one thing that excites us here. It’s the people. It’s the service.”

So there you have it. Instead of their usual chumming of the pageview waters, the speculators finally turned in a big scoop.

 Posted by at 8:42 pm
May 132014
 

I admit that when I first saw the rumors swirling about Apple buying Beats Electronics, I was behind the news by about 8 hours. I took to my keyboard immediately and banged out some thoughts, and not all of them received the benefit of reflection. In what I’ve come to expect from the tech press, this speculation – sourced by 2 dudes at The Financial Times –  has taken on an air of completion that belies its absolutely unknown status. Since the deal has yet to be announced (although FT says it could both happen as soon as this week and that the talks could still derail – nice out, guys), I thought I’d expand on some of the points made in my post on Friday.

  • About the quality of Beats hardware – I called it shit, and I stand by it. It’s certainly not best-in-class and I’d argue it’s not in the top 20%, but then again Apple’s own kit is mediocre at best. Still, hardware is what Apple does and if Apple wanted to do better audio hardware, it certainly has the chops. Even though Beats kit sells at a decent clip, and one can assume its margins are on the high end, this “deal” certainly isn’t about their headphones.
  • About the quality of the Beats brand – I may have been a bit rash about calling it “shit”, and maybe I was associating the brand a little too synonymously with the merchandise they sell. Beats does have some cache as a brand and they have made a push to get their headphones on many entertainers – especially if they appear in front of a camera. I recently saw a UFC card where every fighter had a pair of their cans on. They’ve certainly gotten their name out there.
  • About Apple acquiring them for Beats Music – Still don’t see it – at all. Apple has the most talented designers and engineers on the planet. Apple has access to the largest collection of music on the planet. Apple has iTunes Match, which I am convinced is bashed by the same people who slag the iPhone 5C. Like I said, it isn’t Spotify, but Beats Music isn’t going to make Apple Spotify either.
  • About Apple wanting Beats Music subscribers – I think I made more of a deal out of this than the tech press did, so you know it’s a non-issue.
  • About the $3.2 billion price tag – The price is the ribbon of retardery that bundles a bunch of disperate, piss-poor reasons not to do something into a tidy package of reasons to definitely not do something. In addition to the fact that it’s likely more than what was spent on every other Apple acquisition in the company’s history combined, how do we even know what Beats Electronics is worth? The conventional method of valuation requires financial reporting data, the kind that isn’t required to be provided by an LLC, which Beats is. Sure we get some tasty sound bytes from the company like “Annual sales revenue is estimated at $1.5 billion,” but those statements mean jack shit. What were expenses? How much debt, if any, is being carried? In short, until Beats decides it wants to open its books like a grown-up company, knowing if $3.2 billion is a fair approximation of its value is impossible, which, like saying a deal is “almost closed but could still fall through” is just the kind of positioning that the rumor-mongors who sell Apple-based copy like to assume.

One thing that hasn’t changed for me is how I feel about the deal’s validity: I don’t think it’s going to happen. In a sea of tech reporters trying to disappear into their own assholes contorting a narrative that justifies the details leaked by The Financial Times, I’m still calling bullshit.

 Posted by at 10:11 am
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