Can we dispense with the 'Apple is dead' meme -- other CEOs would lose a limb to have a bad quarter like this
Listening to Apple's fiscal second quarter 2016 earnings conference call yesterday was like attending a funeral—where the eulogy is for someone whom you know has gone to Hell. There's no way to sugarcoat that the good days are over and an eternity of burning flesh awaits. I kid you not. Haul over to iTunes and download the replay. You'll feel the grim reaper looking over your shoulder while CEO Tim Cook talks as joyfully about Apple's performance as a man granted last words before the gallows.
And I wonder why? So what that Apple reported its first revenue decline in 13 years, or that iPhone sales fell for the first time ever, or that Q3 guidance is a few billion short of Wall Street consensus? This friggin' company still mints money, and that ain't changing anytime soon. Revenue reached $50.6 billion—more than Alphabet and Microsoft combined, with $9.8 billion to spare. Apple's $10.5 billion net income exceeds that of both companies. Oh, and iPhone generated more revenue ($32.86 billion) than either competitor's total sales. Apple ended the quarter with a $232 billion cash horde. And we get a wake, not a celebration?
The spotlight shines on the world's most-valuable company this fine Tuesday, as Apple revealed results for fiscal second quarter 2016. Wall Street expected the first revenue growth decline in more than a decade and iPhone's first-ever sales retraction . Is the sky finally falling? Eh, not yet. But the sun slowly sets over the vast smartphone empire.
Ahead of today's earnings announcement, Wall Street consensus put revenue down 10.4 percent year over year to $51.97 billion, with earnings per share down 14.2 percent to $2. Apple actual: $50.557 billion sales, $10.5 billion net income, and $1.90 EPS. Three months ago, the company told the Street to expect between $50 billion and $53 billion in sales. You read the numbers correctly: Apple uncharacteristically missed the Street's targets and came in on the low end of its own guidance.
Earlier this week, Apple finally updated its svelte laptop that launched 13-months ago. I am awe-struck by the company's design-audacity—not for brash innovation but bumbling compromises that make me wonder who needs this thing. The 12-inch MacBook offers much, wth respect to thinness, lightness, and typing experience (the keyboard is clever tech). But baffling is the decision to keep the crappy 480p webcam. These days, not late-1990s state-of-art, 720p is the least a pricey computer should come with, and is it too much to ask for 1080p or 4K when modern smartphones can shoot just that?
This shortcoming, and two others, glares because the little laptop otherwise offers so much, for its size. Thickness is 13.1mm, while weight is 2.03 pounds (.92 kilograms). The 12-inch IPS display delvers 2304 x 1440 resolution at 226 pixels per inch. This thing is tiny: 28.05 by 19.65 centimeters (11.04 by 7.74 inches). Apple's redesigned keyboard provides surprising travel, given the keys' shallowness. By these measures, MacBook is a great carry-along.
Once again, as it has done in the past, Google makes the classic monopolist defense for its competitive—or anticompetitive, depending on perspective—behavior with respect to Android. Today, the European Union's Competition Commission formerly charged Alphabet and its major subsidiary, which has 12 weeks to provide satisfactory legal response before the Commission issues corrective sanctions.
Simply stated, the EC finds that the company abused its dominant position, in part by contracts compelling Android licensees to preload Google apps and related services, including search. Microsoft ran into similar bundling headaches starting in the late 1990s with respect to Windows. Responding today, Kent Walker, Google general counsel, claims that licensees and consumers can choose to install third-party apps. Microsoft made like-claims during its antitrust defense here and in Europe; they fell flat.
Dog years is too slow a measurement when it comes to the Internet, which pace maturing makes Moore's Law look like a skeleton sitting at a feast (it's too feeble a metric). Case in point: Google Chrome 50 officially releases this fine Wednesday, which is a long way from its late-2007 alpha. Whew, where did the years go?
Now before you quibble about who's how old when, let's clarify. By my math, and an official blog post, Chrome turned 50 one week ago. Maybe none of us noticed. I write this the afternoon before Big G rolls out the birthday cake, and Chrome was v49 when I checked but updated to 50. Perhaps this is a push comes to shove thing: Pushing the official day a week later when automatic update shoves the new version out to most users.
The more I use Apple's smaller Pro tablet, the less likely I am to reach for the larger one. I have tested the 9.7-inch and 12.9-inch tabs side-by-side since March 31st—and the bigger one is my primary PC (most days). Unquestionably, the behemoth is capable of replacing a laptop, as Apple CEO Tim Cook asserts. The smaller-size model is a fine notebook companion, and certainly can substitute sometimes. But more than two weeks using this surprisingly satisfying kit, I can't yet (and may never) recommend it as your next PC.
The 9.7-inch iPad Pro, which screen measures like all its forebears, falls into a category I griped about in September 2015: Apple products without purpose—or none that's easily obvious to majority of shoppers. Don't misunderstand. The technology under the hood is quite innovative, and I really, really, really enjoy using this tablet. But I'm not most people, and looking at the broader consumer marketplace, I see the device as being more for the few than appealing to the many; that is until the next release cycle, when current prices decrease. Now, putting aside these caveats, 9.7-inch iPad Pro is the device I most often grab first. Many of the benefits have purpose that is subtle. The question: Are they good enough for you?
If you're headed to London, or live there, the Rolling Stones have a new exhibit (opened last week) at the Saatchi Gallery. Exhibitionism will be there until early September. After which, the gala moves on to 11 other cities, including New York and Paris. Adults can expect to pay £22 (more than US $30, depending on exchange rate that day). VIP tix are £60.
The memorabilia-filled exhibit is meant to be a nostalgic look at the iconic, aging rock band, which youngest member is (cough, cough) 66. But Exhibitionism is as much about selling collectibles, one of which I can't resist calling attention to: "special edition" MH40 headphones. I reviewed the standard set, which sound exactly the same, on March 29th.
April 3, 2016 marks the first day that I truly could use Apple's over-sized tablet to replace my laptop. But I had to spend another $84, before California tax, to do it. Gadget reviewers who say that iPad Pro cannot be your computer are wrong. The apps, performance, and utility are there. Anyone creating content should consider this device as compliment to, or replacement for, an existing PC. The problem with 12.9-inch iPad Pro isn't what it can do but how much it costs to assemble what you need. This kit is far from budget-friendly, which also can be said of Microsoft's competing Surface Pro 4.
I started my iPad Pro sojourn on Groundhog Day, planning to use the device as my primary PC for 30 days. The objective: Apple CEO Tim Cook says the big-ass tablet can replace a personal computer, I want to see if he is right. The experiment isn't my first journey like this. I tried something similar during summer 2011 with one of the first Chromebooks. The path was a dead end. But Spring 2012, when new commercial models released, I started down the path again and never looked back. Google's Chromebook Pixel LS was my main computer before adopting the iPad lifestyle.
April 1st marks my first-year anniversary subscribing to Tidal, which relaunched the same day last year, under new ownership of Jay Z. I love and loathe the music streaming service, which I cancelled at least five times and always renewed—typically before the billing cycle ticked over. But checking archived emails, I see that my sub completely expired thrice but not since July.
Gotta ask: What fool starts a business on April Fools, and what does the day foreshadow; if anything? Apple did it, 40 years ago today. Many commentators have called Jay Z the fool for buying Tidal, which competes against established players like Spotify and newcomer Apple Music. The service claimed to have 540,000 subscribers when acquired last year. This week, Tidal revealed globally there are now 3 million subscribers. Someone correct my math—456 percent increase, right? If Jay Z's the fool, gimme some of that foolishness.
Summer 1984, Chapel Hill, N.C., I learned something about prejudice and discrimination in America and saw my first Macintosh. Strangely, looking back at Apple, which celebrates its 40th birthday today, the two things connect.
As I reflected in Jan. 18, 2004, personal post: "Racism and Naiveté", I never thought much about skin color growing up in a region of America where most everyone is Caucasian. Northern Maine is a white wonderland for more than abundant snowfall. Strangely, though, my best friends had last names like Chung and Zivic. The local Air Force base, Loring, added color to the populace, and when it came to people I was decidedly colorblind.
Newcomer is the only way to describe Master & Dynamic, which on Dec. 31, 2015 completed its first full year of revenue. Young or not, its audio gear is vintage and refined. Wanna see? You can find the MH40 headphones, which look like something World War II bomber pilots would wear, inside any Apple Store. Distribution partnership of that caliber from a near start-up says much about M&D earphones and headphones—design, price, and sound.
The signature sound is full, which is atypical in a market where booming bass ranks among headphone buyers’ top priorities. But for those listeners who delight in the faintest tap of the symbol, warmest treble, and deep lows that reveal details rather than thump, thump, Master & Dynamic delivers. For Christmas I bought the company’s MW60 wireless headphones, which I will review soon. Today's topic is the MH40, which are wired.
Something surely seems missing from this week's Apple Event. A year ago this month, Apple introduced the svelte, 12-inch MacBook. That makes the little laptop ripe for refresh, but it is MIA. Following a media hoopla where the figurative fireworks failed to light, everyone should ask: What is Apple doing? The new 4-inch iPhone is little more than the 5 model introduced in 2012 with fresh internals. The 9.7-inch iPad Pro fits into a crowded category where Apple is mob in the room. Where's the innovation?
After watching the live stream, carefully reviewing what Apple executives said, and looking over device sales trends, I must say this: Either Tim Cook is stupidest tech CEO on the planet, or one of the smartest. The event's big takeaway is this: Apple is trying to corner a faltering computing category on the presumption it's the next big thing. Cook takes great risk in search of greater rewards. If he's right, Apple may come to dominate the next personal computing platform—even as Android armies spread across the planet. Everything hinges on these: Will tablets replace PCs and can Apple become the overwhelming market share leader, regaining dominance held six years ago?
If you're thinking about buying Pixel C, Google gives two good reasons to do so now: Android N beta program and developer discount on the hardware. The tablet normally sells for $499 (32GB) or $599 (64GB) but you could instead pay $375 or $449, respectively. Keyboard is another $149. The discount and beta OS are meant for developers, but anyone can get them.
Pixel C is the best Android tablet I have ever tested, but that's acknowledging prejudice against Samsung tabs, which are worthy contenders, but I dislike TouchWiz UI. Sammy's hardware hums, particularly the stunning screens. But only Google serves up a Marshmallow feast in Android 6.0, and the hardware design and construction are preemo to the max. For less than $400, Pixel C might as well be free, there is so much value here.
Microsoft will join Apple against the FBI and U.S. Justice Department, filing a friend-of-court—or amicus—brief in a case going to court tomorrow. The government wants Apple to create a special version of iOS, referred to by critics as FBIOS, to break into an iPhone 5c security feature. The device manufacturer argues that compliance would set a precedent that would give law enforcement carte blanche with other mobile devices.
Brad Smith, Microsoft's chief legal counsel, says the company "wholeheartedly supports Apple"—a statement that eradicates any potential confusion caused by cofounder Bill Gates. In an interview with Financial Times two days ago, Gates supported the government's demands. I responded, calling his position a "catastrophic occurrence that demands current chief executive Satya Nadella's official response. There needs to be clear policy about government backdoors and the position with respect to the San Bernardino shooting iPhone". The company's position is now unequivocally clear—presuming the legal filing fits with "wholeheartedly".
My previous post in this series begins: "I cannot presently recommend Apple's big-ass tablet as a laptop replacement—using the official-issue Smart Keyboard". The statement is retracted.
Apple PR contacted me after the story published, asserting that the short battery life I experienced was abnormal behavior. Seeing as it was the last day to return iPad Pro under T-Mobile's buyer's remorse policy, I took the assertion at face value and returned the rig. The exchange interrupted my plans to use the tablet as my primary PC for a month. From today, the clock resets to zero, and I start over.