One of the Faultline rules of business is that when things appear from the outside to be going wrong, once the details finally come out, it will always turn out they were a lot worse than outsiders thought at the time. We think that this most certainly applies to Apple right now.
Apple can show the world a new version of iOS, and of its Mac OSX later this year, and that will invite us all to speculate that some changes were made in the software for the introduction of some great new product or other, but Tim Cook appears to be unable to convince the analysts of this world when he speaks publicly, that the company is paddling furiously enough to continue to innovate at the fantastic pace the company set when Steve Jobs was at the helm.
This week at the All Things Digital technology conference every word Cook uttered was put through the ringer to find hidden significance and the lost Apple cause of innovation. The main directions brought up were the Apple TV, which has sold 6.5 million this year, and a total of 13 million ever; that Apple will out-Glass Google with some wearable item of computing. Cook gave very few other hints except that on previous occasions he has pushed back near term expectation ‘ except to the software platforms ‘ iOS, which will have a version 7 and OS X will get a new version. The media are also expecting the iPhone 5S and new Macs, especially a Macbook Air update, but that may not materialize as soon as the upcoming developer conference.
Other devices that are expected soon are not new breakthroughs, more price adjustments, with an iRadio service expected as a Spotify Killer, and a cheaper small iPad. Comments about better Flickr integration are not the fare that Apple fanboys are used to making do with.
Talk about wearable computing devices, which according to the comments Cook made, can’t be watches (because no-one under 25 wears one) and can’t be Glasses, because he so savagely criticized Google’s efforts here, leave him chatting about general trends and leads everyone to conclude there’s nothing much in Apple’s locker. The analysts that are grasping at straws noted the comments about Apple TV, it was a hobby, we’ve learned a lot, and we have a ‘very grand vision for this.’
Last week at the Google IO conference many new developer tricks which Apple does not have, were on show, which suggests that the Android developer market needs to try harder than Apple in order to catch up, but it appears to be managing it.
Under Steve Jobs this kind of announcement would have been annexed as if it was Apple’s invention, as touch screens were. Under Cook’s charge Apple appears unable to rush anything to market, and as we say this inability almost certainly masks internal disquiet, a lack of managerial direction and a complete lack of a viable vision.
Forlorn hopes for Apple lovers include a combination MacBook Air which is also an 11 inch iPad, when detached? And what everyone is calling the iTV, a TV device which comes with a service attached. We know that negotiations have been ongoing between Apple and content businesses since before Steve Jobs was ill. They have never been conclusive because, as usual, Apple needs a set of terms offered to no-one else, as it received in its initial pricing for iTunes music from the record labels and the ability to sell isolated tracks instead of albums. Because Apple rarely innovates in a device, it has to innovate in the business model or customer terms.
Apple will have to enter original content negotiations in order to get exclusive content, but that would be out in the open the moment anyone started filming, and its only real ‘move’ that could give it content and an element of surprise would be to buy a major studio ‘ none are for sale, and even a rumor that Apple was sniffing would send their share prices into the stratosphere.
Apple has never gone to market in a fair way, with the same terms and conditions as everyone else, something that is only now being realized with the Anti-trust machinations that are going on in Europe over its iPhone contracts (see separate story). Apple was entitled to sign such one sided contracts before it became a dominant force in smartphones, but now that it is, it has no such right, and must changes its terms ‘ something that will be occupying Cook’s mind, taking him away from invention, but which will never have entered that of Jobs.
Cook says that the TV experience is not one that many people love and adds that it’s an experience much like 10 years ago or 20 years ago. Well no, it’s not. DVRs, OTT, tablets viewing, second screen data services, recommendation systems, integrated linear and VoD EPGs, apps on TVs ‘ all testify that it has been changing radically. But for Apple to nail down sufficient content, ahead of rivals, in a manner that would favor it long term, which is not anti-trust, and which does not leverage illegally from its devices, or its iTunes service, is almost impossible. And for Apple to use all those techniques and claim that it invented them all is perhaps a move that even Jobs at his best could not pull off, and for Cook it is too late.
Yes we expect a new Apple TV, and yes it will have more to offer, but this is a device which has sold 13 million when attached to a massive brand and available globally. Roku has managed 5 million device shipments, while only available in a tiny footprint, and with just a few million dollars of working capital, with almost no exclusive arrangements. (It has added more cash this week, see separate story).
And breathing down Apple’s neck this week in the US is news that Samsung will even meet it here. Samsung has asked for an FCC analog tuner waiver on a new as yet un-launched device, a box equipped with CableCARD which can also support OTT subscription video services such as Netflix and Vudu. It is being dubbed the Smart Media Player and it looks like it makes any TV smart, and while it is likely to be more expensive than the $100 Apple TV for now, Samsung will be placed so that with a minimal effort it will be able to add any Apple inspired features, such as iCloud storage, and go head to head with Apple immediately. The first Samsung version is due out later this Summer.
When a company has lost its Mojo, its PR, brand and financial clout can keep the wolves at bay for quite a while, but if behind the scenes there is argument, a lack of leadership and rivalry, it doesn’t take long for it to come out into the open, and as we said at the start, usually what opens is a can of worms.