Category: Links

Apple’s Precarious and Pivotal 2019

M.G Siegler on Apple’s earnings call:

The results are in. Actually, they’re not in. And that was a major problem yesterday for Apple.

You see, the company had to do something they almost never do. They had to revise their earnings guidance.¹ Downward. The stock was halted. Yikes.
Today, the stock is down nearly 10%. Tens of billions of dollars have been shaved off of Apple’s market cap, literally overnight.

The company is now the 4th most valuable corporation in the world. That sounds like a great thing until you remember that until recently, it was the most valuable company in the world — and for much of the past several years, this was the case by far.

Yesterday was a nightmare scenario for any public company. But it’s almost unfathomable that this happened with Apple. For years and years, this is the company that not only beat their earnings guidance (not to mention Wall Street’s expectations) quarter after quarter, they crushed them.

I mean, this is the company which celebrated becoming the first trillion dollar company just this past August. What a difference a few months makes.

Tim Cook’s letter to shareholders on the matter is fascinating. On one hand, he makes a very simple case: chalk it up to China.

A bad economic situation exacerbated by a trade war has created a perfect storm of sorts, undoubtedly for many companies operating in the country. Yet many U.S. companies don’t operate in China the way that Apple does. It’s their third-largest market. So yeah, this was always going to hurt.

On the other hand, all of that could have been explained in one or two paragraphs. Cook’s letter is nearly 1,500 words long.

But it’s worth diving a bit deeper into what’s going on. Or actually, just zooming out a bit, to summarize. Because to me, the interesting bits are about what’s going on with Apple beyond the China situation.

[…]

While the bad miss on the quarterly revenue and the revised statement surprised me, the underlying issues that Cook hints at do not. They point to something we’ve known for years: it was always inevitable that the law of large numbers would catch up with Apple. More specifically, with the iPhone — perhaps the greatest product from a business perspective in history. And that appears to have happened. Finally.

Two paragraphs in Cook’s statement stand out to me:

In addition, these and other factors resulted in fewer iPhone upgrades than we had anticipated.

This is a big deal. Almost mentioned as an aside; love it. And:

While Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline, in some developed markets, iPhone upgrades also were not as strong as we thought they would be. While macroeconomic challenges in some markets were a key contributor to this trend, we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, US dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements.

Again, there’s the weaker-than-expected iPhone upgrades data point. But with a bit more detail this time.

[…]

The iPhone has simply been too good of a business. And it’s hard to see what tops it. Certainly in the near term. If Services is to carry Apple in the future, it will likely be only after years of relatively stagnant iPhone revenue growth mixed with a rising overall market. In other words, time and the broader world will have to catch up. And then Apple can have their “Microsoft Moment” — a services-based resurrection of growth.

Read the rest of the article, M.G is spot on with every point he makes.

CNBC talks with Tim Cook

After this “Letter From Tim Cook to Apple Investors”, published yesterday on Apple’s Newsroom:

Today we are revising our guidance for Apple’s fiscal 2019 first quarter, which ended on December 29. We now expect the following:

Revenue of approximately $84 billion

Gross margin of approximately 38 percent

Operating expenses of approximately $8.7 billion

Other income/(expense) of approximately $550 million

Tax rate of approximately 16.5 percent before discrete items

The CNBC interview makes for an interesting watch.

Samsung partners with copycat Supreme brand in China

Stefan Etienne, writing for The Verge:

Samsung is getting criticized by hypebeasts everywhere after it claimed to be collaborating with Supreme; in reality, it partnered with a Supreme rip-off. Samsung is actually partnering with a fake legal brand, a rival company based in Barletta, Italy, that beat Supreme NYC in a court case this summer regarding who can use the brand name in Italy.

[…]

The real Supreme — the New York City-based fashion brand made famous by its box logo, collaborations, and limited-run items — said in a comment to Hypebeast that it is not working with Samsung or opening a flagship store in Beijing. “These claims are blatantly false and propagated by a counterfeit organization,” a spokesperson said.

The two CEOs of the fake Supreme were ushered onstage with confidence during a product launch today. “Youth these days want to show their uniqueness in style … to show off style, we have two brands that begin with S,” said Feng En, marketing head for Samsung China, pointing at the logos of Samsung and Supreme on-screen behind him.

After the stream aired, Samsung China’s digital marketing manager, Leo Lau, clarified in a now-deleted Weibo post that Samsung was not collaborating with the authentic Supreme brand. “We are collaborating with Supreme Italia, not Supreme NYC,” Lau said. “Supreme NYC has no sales and marketing authorization in China, but Supreme Italia has obtained product sales and market authorizations in the Asia Pacific region (except Japan).”

So first, Samsung announces a partnership with Supreme, but wait, it’s the fake Supreme. (-‸ლ)

Google Allo to shut down in March, putting focus on Messages and Duo

Ry Crist, writing for CNET:

Several months after “pausing investment” in the service, Google is officially shutting down Allo, its messaging rival to the likes of Apple iMessage, Facebook Chat and WhatsApp.

The search giant said in a blog post Wednesday that the app will work through March. Until then, users will be able to export their existing conversation history.

“We’ve learned a lot from Allo, particularly what’s possible when you incorporate machine learning features, like the Google Assistant, into messaging,” the post says.

Attention will now shift to Messages, Google’s Android-based messaging app. That comes with a focus on RCS, which is set to give Android users advanced messaging features like read receipts and higher-resolution image-sharing capabilities. Additionally, Google will continue to support Hangouts for group chat and Duo for video chat.

“We’re … ready to take what we’ve learned from Allo and put it to work to make Messages even better,” Google’s post reads. “And by refocusing on Messages and Duo for consumers and Hangouts Chat and Hangouts Meet for team collaboration, we’re focused on delivering a simpler and more unified communications experience for all of you.”

Another one bites the dust when it comes to Google messaging services.

Microsoft Is Worth as Much as Apple. How Did That Happen?

New York Times:

Just a few years ago, Microsoft was seen as a lumbering has-been of the technology world.

It was big and still quite profitable, but the company had lost its luster, failing or trailing in the markets of the future like mobile, search, online advertising and cloud computing. Its stock price languished, inching up 3 percent in the decade through the end of 2012.

It’s a very different story today. Microsoft is running neck and neck with Apple for the title of the world’s most valuable company, both worth more than $850 billion, thanks to a stock price that has climbed 30 percent over the last 12 months.

So what happened?

Ever since Satya Nadella came on board in 2014, Microsoft has been following his vision for the company, they’ve re-invented themselves by dumping a lot of stuff that didn’t work and focusing on what did and the end result is a new Microsoft.

Jason Snell on the New Ipad Pros: ‘a Computer, Not a Pc’

Jason Snell, writing for Six Colors:

With the iPad Pro and improvements to iOS and various iOS apps, I reached a point where I could do most or all of my required work on the road without bringing a Mac along. (I’ll get into some of the limitations below, because they still remain — and are frustrating reminders of how young this product still is.) I wasn’t going to leave the iPad behind, but I no longer needed to bring the Mac. My bag got lighter.

So when I review the new iPad Pro, it’s as someone who has chosen this platform as a tool to get work done around the house and on the road, in addition to all the other things the iPad excels at, like letting me read the news in the morning in bed while sipping my tea.

Marco Arment on the 2018 Mac Mini

Marco Arment:

I hardly ever think about my Mac Mini, but it serves a vital role for my family as our home-theater mixerPlex server, ScanSnap server, Apple Photos backup, and Backblaze host for our NAS.1 Almost every port on the back is in use, and it runs 24/7, reliably, in total silence.

Until last week, I thought it would be the last Mac Mini that Apple ever made.
And when rumors started swirling about an imminent Mac Mini update, I assumed the worst: if it came at all, it would be a tiny box with a slow, ultra-low-power processor and almost zero ports, optimizing for small size instead of versatility.

I don’t think this was an unreasonable fear after the 2014 Mac Mini update, which made many key aspects much worse without making anything much better. It seemed clear then, and for the following four years that it went without an update, that Apple held the Mac Mini and its customers in very low regard.

Not anymore.

The 2018 Mac Mini is real, and it’s spectacular.

It makes almost nothing worse and almost everything better, finally bringing the Mac Mini into the modern age.

[…]

A new Mac Mini could’ve been so much worse. At many times in its past, it has seemed unloved, neglected, and downright punitive — a similar pattern to Apple’s other headless desktop, the Mac Pro. It seemed for a while that Apple lacked any interest in making Macs anymore, especially desktops.

Last year, with the introduction of the absolutely stellar iMac Pro, Apple showed us a glimpse of a potential new direction. It was downright perfect — a love letter to the Mac and its pro desktop users, and a clear turnaround in the way the company views the Mac for the better.

We didn’t know until now whether the iMac Pro’s greatness was a fluke. But now we have another data point: the last two desktops out of Apple have been incredible. After this, I have faith that they’re going to do the new Mac Pro justice when it finally ships next year.

The new Mac Mini is a great update, out of nowhere, to a product we thought would never be updated again.

Of course, with Apple’s track record on the Mac Mini, it may never be updated after this. This is either the first in a series of regular updates with which Apple proves that they care about the Mac Mini again, or it’s the last Mac Mini that will ever exist and we’ll all be hoarding them in a few years. We can’t know yet.
But today, this is a great update, a wonderful all-arounder for lots of potential needs, and just a fantastic little computer.

Remembering Stan Lee

From the New York Times Obit:

If Stan Lee revolutionized the comic book world in the 1960s, which he did, he left as big a stamp — maybe bigger — on the even wider pop culture landscape of today.

Think of “Spider-Man,” the blockbuster movie franchise and Broadway spectacle. Think of “Iron Man,” another Hollywood gold-mine series personified by its star, Robert Downey Jr. Think of “Black Panther,” the box-office superhero smash that shattered big screen racial barriers in the process.

And that is to say nothing of the Hulk, the X-Men, Thor and other film and television juggernauts that have stirred the popular imagination and made many people very rich.

If all that entertainment product can be traced to one person, it would be Stan Lee, who died in Los Angeles on Monday at 95. From a cluttered office on Madison Avenue in Manhattan in the 1960s, he helped conjure a lineup of pulp-fiction heroes that has come to define much of popular culture in the early 21st century.