

Apple’s “Windows 95″ Problem - mxpatel29
http://blog.raavel.com/2013/09/11/apple-problem/

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sambeau
The stock pretty much always falls after Apple announce something. I assume
the reasons are complex — anything new is a risk, anything old is a lower-
margin version.

Historically, you cannot make any accurate predictions of Apple's success or
failure based on The Market's reaction to a keynote.

That leaves the other point: "Meh". Yes, I'm sure everyone wants Apple to
announce something groundbreaking and industry defining. I'm sure Apple do
too.

Maybe they will again or maybe they won't. Either way I'm sure Tim Cook has a
better idea of how to do it than the bloggersphere.

~~~
JoelSutherland
Apple stock has been up 4/7 times the day after the announcement of an iPhone.

~~~
vor_
What are the numbers when counting non-iPhone announcements? Apple's stock
dropping after a keynote isn't uncommon.

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grandalf
Keep in mind what Apple has been doing with the proceeds of its amazing cash
cow:

\- smart moves to economize the supply chain

\- attempting to simplify/unify its various OSes.

\- hinting at a lower price point future (inevitable).

\- focusing on patented industrial design (lightning connector, new mac pro,
etc.)

\- taking away carrier margins (iMessage)

\- notably ignoring "enterprise users" and focusing on making consumers happy.

In the next year or two I expect Apple to start gunning for market share. It's
amazing how much Android has lagged, and Apple has decided to err on the side
of profits while Android has blundered along releasing phones with 4 hour
battery life and jittery screens.

Apple envisions a future in which you can seamlessly move between mobile, web
(iCloud), and desktop/laptop experiences and you get the same high quality
experience.

I expect Apple to push boldly into the gaming market as well as (somewhat
ironically) into web or web-enabled app ecosystem.

~~~
JohnTHaller
Yes, it's amazing how much Android has lagged, releasing best-in-class phones
like the HTC Once and Sony Xperia Z1 that have no match in the iOS world (and
that cost the same as Apple's 'low-end' 5C). As well as inexpensive mid-range
products like the Nexus 4 and Nexus 7 making modern well-made smartphones and
tablets accessible to all. Not to mention the open ecosytem and OS that all
kinds of companies are innovating on in all sorts of ways a single company
could never dream of, both hardware and software.

Summarizing the Android market by looking at the low-end devices shows a
complete lack of understanding of the Android market and the smartphone market
as a whole.

~~~
AJ007
I think the previous commentor's thoughts may have been correct a few years
back. The most recent generation of Android phones and tablets are fantastic.
At $230 for the Nexus 7, both the iPad mini and iPad just don't make any sense
to purchase, short of the buyer already having a huge library of iOS apps.

Apple still has great potential. There should be a formidable alternative to
Android even if it is a closed platform.

~~~
grandalf
I haven't used the latest version of the Nexus 7, but the previous version is
not even comparable to the iPad in terms of usability for web browsing.

~~~
bryanlarsen
I'd rather have a Nexus 7 2012 for internet browsing than an iPad 2. The iPad
2 has a better screen and 10" is better than 7" for browsing, but the way tabs
keep getting discarded from memory make it very painful to use when you have a
poor internet connection.

~~~
grandalf
True, but you can download google chrome for IOS to solve that problem.

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noir_lord
> Apple in time will need to move away from the iPhone and iPad, as they will
> become a commodity.

As someone who already owns a Nexus 4 and a 1st gen Nexus 7 they are already a
commodity, I bought my N4 for half what an iPhone 5 costs.

The only thing that keeps Apple even remotely price comparable on the iPhone
is that people mostly buy a smart phone on contract so they see roughly the
same price per month (but the carrier takes a much bigger cut with Android).

For someone old enough to just remember the 80's and the Mac vs PC wars it's
like watching history repeat itself again, the completely backwards commodity
platform vs the well engineered but more costly platform except this time
Google is in IBM's place and they aren't doing it by accident like IBM did
they know exactly what they are doing (look at the nexus line, top of the line
hardware, always the newest version of the software and price that hurts other
companies using Android, they risk hurting their own suppliers to drive the
price of high end hardware down as rapidly as possible) the problem is that
the commodity platform gained ground very very quickly and something like the
Nexus 4 at 200 quid with Android 4.3 is now the equal of the iPhone 5 at 500
quid.

The next 5 years is going to be fun to watch whichever side of the divide you
are on.

~~~
alayne
Google doesn't make any money off their Nexus devices. They sell them close to
cost. Unless Apple is planning to convert itself into an advertising company
(like Google), I don't think holding out the Nexus branded devices as an
example to follow is reasonable. Samsung is really the only player making
significant money in the Android space. I think it makes more sense to look at
what they are doing.

~~~
hazov
It's now written on the wall for everyone to see that devices will fall in
price in the next decade and with it will go profit margins, money will be
made by volume of sales, Samsung is just where like Nokia once was in this
place, Google just want to accelerate that because it makes business sense to
them.

Apple already realized that as their recent announcement demonstrated.

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binxbolling
It's bizarre to lump Win XP in with duds like Me and Vista. Isn't XP, by most
measures, an unmitigated success?

(You might not think it's great personally, but it's certainly not the case
that MS has had no blockbusters since Win 95.)

~~~
probablyfiction
XP was the first decent Windows release since Windows 95, and consumers
adopted it en masse. However, it was riddled with security flaws and that
makes it less attractive when looking at it in hindsight.

~~~
masklinn
> XP was the first decent Windows release since Windows 95

I'm sure you mean "2000" not "XP".

~~~
probablyfiction
What I should have said was that XP was the first decent consumer-focused
release since Windows 95. 2000 had a good codebase, but an abysmal adoption
rate.

~~~
masklinn
> 2000 had a good codebase, but an abysmal adoption rate.

Yes, which kinda-sorta was expected as it was still considered part of the NT-
line and not a consumer OS, and WinME was released _after_ it.

Still, it was a perfectly good consumer OS (IIRC, 2000 was the original merge
point of the NT and 9x lines, then the building base for Project Neptune which
fell through and ultimately lead to Whistler after 2000's release), much
better than WinME could ever be, and I only reluctantly switched to WinXP (to
try AoE III which refused to install on 2000, of all things)

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ambirex
I doubt the market sell off yesterday had anything to do with how well the
products will sell (I'm guessing we will soon hear that it is "The best
selling iPhone ever").

Rather, it is more likely to do with downward pressure on profit margins of
the iPhone. Sure the plastic cover of the 5c will help, but there are still a
bunch of expensive components inside.

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rbanffy
Actually, Apple did catch a lot of these "once in a lifetime" waves. It's true
they don't have a Steve Jobs, but it's also true nobody else has.

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vor_
Apple stock dropping after a keynote is not uncommon. I hear this dismissal of
Apple products from techies nearly every time they announce anything. It's
such a common phenomena that John Gruber calls it "claim chowder". People at
one time thought the iPod mini was too expensive and that nobody would want
it, and they considered the iPad little more than a "big iPod touch" that
sounded like a feminine hygiene product (seriously). Apple is pretty good at
understanding what regular people want, and techies tend not to be so
understanding. The claim that reaction to the presentation was a "collective
meh" is unfounded.

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mattkevan
I don't understand why people expect Apple to release a market-shaking new
product every year and are actively disappointed and say things like 'Apple
are done innovating' when it doesn't happen.

This is not how it works.

Firstly, products that go to new places take a long time to get right. Apple
worked on the iPhone and iPad for years before they were released. In fact
Apple started on the iPad before the iPhone.

Secondly, if there's too many changes too quickly any impact each may have is
lessened. If in 2007 after releasing the iPhone Apple's management said
'Right, we've done this touch screen stuff. Let's come up with a different
interface method', the iPhone (and touchscreen computing in general) would not
be the force it is today.

Implications of each change need time to sink in and be explored properly.

Thirdly, it's not how Apple works. They come up with a new product category
once or twice a decade and iterate on it annually year until it becomes
mature.

Fourthly, who knows what else Apple's been working on over the last few years?
The attitude assumes that there's nothing more going on, that some of the
world's brightest people with practically unlimited resources are just
watching cat videos all day.

Now Apple may well be done innovating, but for the author to say that without
any actual knowledge seems hasty, and more like he's disappointed he didn't
get a pony.

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mkhalil
It used to be I bought Apple products at a premium price to be ahead of the
curve in technology. For instance, Retina Screens on Phones, Thunderbolt
ports, lightweight quad core notebooks. Now I find myself waiting for Apple to
play catch up and release NFC on an iPhone, or HASWELL MACBOOK PROS/Retina
(that I can't believe we don't have yet). The Macbook Pros used to be the
first of popular laptops to use the latest processors. Now what am I paying
the premium price for again?

~~~
derefr
If Apple haven't released NFC by now, they're not gonna. They might throw up a
slide at some point in a year or two pointing out how little Android users
actually use NFC, right before announcing that they've managed to get
extremely-low-power Bluetooth autonegotiation with auth-token-push on
thumbprint-confirmation working, or something.

------
S_A_P
It is very similar to the problem they faced against Windows 95 with the
macintosh. Microsoft was focusing on building a commodity OS and not worried
about the hardware while commodity hardware vendors were able to focus on
their strengths without having to fuss to much about hardware. Apple, being so
vertically integrated will probably lag behind somewhat. Its just way more
complex to design end to end, even if the final product is better integrated
and more "finished".

However, I am not really sure that the Android or Windows Phones are really
all that more innovative. Sure they can throw in a 50 core chip and a 15"
screen, but in the end there is little real differentiation between phones
right now. I think apple should allow for larger screens, as my hands are
larger than the average person so I can still use one hand on a Galaxy, for
example.(but just barely) This is really everyones "windows 95" problem. The
market is pretty mature and at this point there is only room for iterative
improvement. In fact many of the latest mobile innovations seem to have
frightening privacy and security concerns- mobile payments, NFC, location
context are difficult to do well and securely.

~~~
Touche
Making things more affordable is a type of innovation. Lumia 521 and Nexus 4
are two examples of that.

~~~
S_A_P
Definitely true, and this benefits us all. But its not the "once per
generation" type of innovation that he was talking about.

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kybernetyk
> The market is telling Apple that it is not innovative enough

Which market? The smart phone market? Because I think the new iPhones will
sell as well as the prior models.

Or does the author mean the 'stock market' ... which to me is more a casino
than a real market.

If people buy iPhones and Apple makes truckloads of money then ... well ...
fuck the stock market gamblers.

------
brudgers
Apple's challenge is that they have been iterating by adding features to the
iPod for more than a decade. Adding a phone, and touch, and software and a
bigger screen have worked because they have found a way to do so profitably
and at scale. They sold because they provided new kinds of uses.

But in the end, it's the electronics industry and the efficiency of supply and
manufacturing pipelines is increasing faster than Apple's demand - i.e. the
companies which make up the pipeline are growing their businesses beyond
meeting Apple's demands and Apple's competitors are able to utilize that
capacity to make their operations more efficient.

The seed change is that Apple is increasingly marketing their products on
specifications rather than differences of kind. Retina was the first example
of "now with more of what we already have." Adding a quad-core processor is
just a faster horse not an airplane.

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gavinlynch
Since when has "the market" had any clue about innovation?

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JonnieCache
I heard that the sell off was due to the lack of a deal with China Telecom
which the markets were expecting to be announced, and had already priced in.

~~~
gutnor
People fail to realise that traders also use all the Apple rumors to make
their purchase decision. The market value of Apple before the keynote reflect
(to some extend) the value of Apple if all the rumors were true.

There was a lot of positive hype that did not concretize during the keynote:
no deal with China, expensive iPhone5C, no iWatch.

The adjustment we see today has little to do with actual Apple offering. Not
much that can be concluded from it either.

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hacknat
I love how a 4 hour sell-off somehow means "the market" has uttered its final
pronouncement on Apple's latest product lineup.

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TruthSHIFT
Why is iOS 7 being perceived as "not innovative?" If your innovations are only
in software, do they not count?

~~~
noir_lord
I'm sure they do count but what innovations does iOS7 actually have? (not
snarky, I've just not seen anything so far I'd consider innovative).

~~~
pinaceae
iBeacon.

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notatoad
has there ever been an apple product announcement that didn't cause the stock
to dip immediately afterwards?

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superuser2
I have yet to see a "commodity" smartphone or tablet that was nearly as stable
or reliable as an iOS device, didn't have the UX destroyed by manufacturer
customization, and wasn't abandoned by its manufacturer and never updated
again just a few months into the two-year upgrade cycle.

Has the Android ecosystem actually solved these problems yet?

~~~
general_failure
Only one way to find out.

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nsxwolf
"The market is telling Apple that it is not innovative enough and that its
need to do much more"

The _stock_ market might be saying that but the "people who buy phones" market
seems to be pretty happy with what Apple is doing.

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saturdaysaint
This has been the reaction to every iPhone announcement after the inital
iPhone - "Meh, it's like the last iPhone with 2 new features". Remember the
reaction to the first iPad? Yep, "Meh". These reactions are noise.

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Shorel
That's how marketing people think.

I care more about the closed nature of the platform. I want to change many
things without having to root the device.

A more open platform in technical terms would be awesome. More peripherals,
more software, more freedom.

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Roboprog
Windows 95 problem? Did Apple make an overhyped system that was a steaming,
crashing, pile? You remember: "Start me up! ... You'd make a grown man cry----
y!"

I guess 95 sold, but man it was awful. I switched to Linux about 6 months
earlier. The real innovation for MS was earlier in NT, but MS wasn't pushing
that to consumers. Comparing iOS to Win95 just seems like a totally off
comparison.

Maybe comparing iOS to XBox would be a better comparison from a tech
standpoint, but I'm not sure MS made so much money from XBox. XBox grew quite
a bit at first, but now seems stalled on dubious increments. That seems a
better parallel for iOS to me.

~~~
samspenc
But it was a smash hit and a better product, compared to Windows 3.11. ;)

