The world of technology often seems all-encompassing, occupying all of one’s time and attention. But not this week. A bombing at a marathon. An industrial explosion that devastated a town. Poison in the mail. A city deserted. Another devastating earthquake in China.
At the risk of being crass, the real world news was useful perspective for a tech industry that didn’t have the best week either. AAPL plummeted on discouraging supplier earnings, and multiple earnings reports missed. As the industry becomes increasingly consumer-driven, it also becomes increasingly seasonal. No one expects retailers to have good first quarters; should we expect anything different from tech companies?
It was a good week on stratechery, and I appreciate the support shown by for several of the articles written this week. As always, I greatly appreciate your spreading the word about stratechery and following @stratechery.
I visited my local AT&T store to check out the Facebook First. While the phone itself had pluses and minuses, the larger challenge facing Facebook is that the personalized nature of Home does not translate to a retail experience.
There is a lot more Facebook would be doing to sell the phone though. It’s a reminder of how big a leap it is to go from a free website to actually selling things, and reinforces what a competitive advantage Apple has with its stores.
Apple does everything wrong. They don’t do market research. They don’t segment the market with multiple models. They don’t have promotions. They don’t diversify. They don’t have divisions. They don’t have multiple P&Ls. They don’t pursue market share above all else. They don’t take on debt.1 They don’t pay dividends (or big enough ones, now). They don’t buy back their stock.
They don’t make sense, especially to Wall Street (where today AAPL was pummeled yet again).
I believe the market thinks of Apple as a Black Swan: their success is so inexplicable, wrong even, that they simply have no idea how to value the company – in fact, they don’t even try.
App Annie posted their quarterly app report this week, and there were three big-picture trends that jumped out at me:
- Google Play is getting over the monetization hump, and it’s likely due to in-app purchase
- Google Play is not very sticky
- Some observations on markets
- Facebook Thinks You Might Like Up to Three Video Ads in Your News Feed Each Day link — Here’s the million dollar question: if Facebook had started as an app, what would their business model be?
- A Common Thread link — Apple’s share of profits in the mobile industry is mirrored in the PC business. Software differentiates hardware.
- Amazon Reportedly Acquires Siri-like Evi App link — “Evi, buy me a toaster”
News & Analysis:
- Surging India sales of Apple iPhone may propel company’s topline to over $1 bn link — This may be due to Apple finally abandoning the carrier subsidy model in India. In many ways, India is the poster child for the low-cost iPhone.
- Samsung admits to posting fake user reviews on the web link — Samsung paid Taiwanese students to defame the HTC One X on the web and praise the S3. I’m rather certain this was happening with the One as well; in the run up to launch it was widely rumored that there were serious build quality problems, which turned out to not be true.
- Amazon Expands Global App Distribution to Nearly 200 Countries link — In case there was any question Amazon is taking their tablet/phone ambitions seriously.
- IBM Takes a Beating link — Classic tale of disruption. IBM has pushed the on-premise solution as far as it will go; cloud-based solutions don’t offer nearly the same revenues, even as they meet needs.
- IBM in Talks to Sell Part of Its Server Unit to Lenovo link — Obvious shades of IBM’s previous sale of their consumer PC business to Lenovo. A sell, it should be noted, that has turned out fantastically well for both parties.
- Twitter Launches Twitter Music link — Twitter continues its transition from protocol to full-fledged platform.
- 5 Mobile Apps Chinese Smartphone Users Can’t Live Without link — Useful overview of the top apps in China
- Google Fiber: Just One More Search Per Session link
- The Dell Buyout: Storm Warning for the Tech Industry link — Must-read.
- IBM’s potential x86 server sale to Lenovo highlights oncoming train link — Great article highlighting the threat facing name-brand server makers.
- Where’s Twitter Music For Android? Why Today’s Tech Companies Are Still Going iOS First link — iOS = engaged users.
- Windows 8 and OS X Mountain Lion – separated at birth? link — Thought-provoking piece on the high-level similarities between the two dominant PC OSs.
- Microsoft’s Surface Strategy is Doing What it was Supposed to Do link — Namely, propping up Windows revenue. The margins aren’t nearly as good though.
- The PC Industry of the Past is not the PC Industry of the Future link — A key point: Apple has always been a consumer company. It’s why they failed in the 80’s, and why they’re successful today.
- One Man’s Journey From Los Angeles to Real Madrid Good-luck Charm link — Probably my favorite article of the week.
- Sriracha hot sauce purveyor turns up the heat link — Great story about the purveyor of the rooster branded chili sauce.
- The Rise of the New Groupthink link — Is collaboration always better?
- The Business of Phish link — Very interesting overview of how Phish made it big
- Baseball Player Steals First, Confounding All Scorekeeping Software link — Fun. Read the linked ESPN article and watch the video.
- “Moore’s Law doesn’t apply to milling aluminium” @BenedictEvans
- “Facebook: Death by a thousand selfies RT @LDrogen: SnapChat is 3X bigger than Instagram on pics sent per day” @ericjackson
- “WhatsApp CEO Not as strong in U.S. as in other countries. We’d like a bigger presence globally. Don’t think of just one country. #AllthingsD” @maggie_reardon
- “Facebook is collecting almost as many design/developer rockstars as Yahoo did a decade ago.” @BenedictEvans
- “MLB’s Bowman: There’s no third platform. It’s iOS and Android. #dmobile” @JohnPaczkowski
- “If you added up all of the revenue from every single mobile social service, you’d get to less than one third-tier mobile operator” @BenedictEvans
- “Typical Amazon – throw out a few datapoints, encouraging people to generalise whilst the specific data cannot be generalised.” @KeithJamesMc
- “Market’s needs are being met with iPhone 4 and 4S. Important to take note.” @SammyWalrusIV
- “Even Apple bears are running out of reasons to justify Apple’s stock price.” @SammyWalrusIV
- “Apple purposely doesn’t do certain things. There are many humans who can’t seem to comprehend that fact.” @SammyWalrusIV
- “I think the fundamental message of US smartphone share is that Android does poorly when it’s at effective price parity with iPhone” @BenedictEvans
- “I bet most android twitter users are completely unaware of how different their iOS brethren have it. Amazing.” @nerdtalker
- “For context on Apple, it’s current market cap is only twice that of its cash value. Excluding all good will. Excluding all future earnings.” @GlennF
- “USA market really is as big as outlier as China and Korea, but gets all the press. High noise/signal ratio.” @KeithJamesMc
- “Changing the recency/peak traffic patterns that have dominated the web for the past 5 years could be transformative.” @shanley
- “[Microsoft] really has their shit together on cloud services. It’s their best ‘in’ to reach mobile developers.” @gruber
- “Million dollar idea: An app that sends you a text when the light turns green.” @chrisrockoz