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Apple’s Social Network (stratechery.com)
233 points by ingve 6 months ago | hide | past | web | favorite | 201 comments

I don’t think he mentioned it, but the easy way for Apple to grow to a $2T company is to get my household, a typical locked-in Apple household with an iPad or iPhone for every person and a computer for each adult and an AppleTV at every TV, to start paying for ever more services through those Apple devices. TV service. Ubiquitous internet service. Financial services like payments but grow into banking. manage all my regularly scheduled bills like utilities, rent or mortgages. I would love for a trusted intermediary to handle these things.

I was recently taken aback by the amount of money I was paying for high-quality subscriptions “oh my god, I’ve paid $20/month for the last 12 months to subscribe to high quality streaming to Phish concerts via their app?!?” I signed up for it thinking I would only do it for a month. I forgot. I spent $240 on Phish audio, more than I spent on my Apple Watch. Apple’s real social network could be just getting started. Imagine if those “luxury” expenses were intermixed with a dozen other large, more legitimate bills? Apple could be processing $1000s a month per household, taking a hefty fee from some of them. And then launch a loyalty program :).

If I had to guess, I’d say this comment resembles Buffet’s view of Apple’s opportunity.

>Imagine if those “luxury” expenses were intermixed with a dozen other large, more legitimate bills? Apple could be processing $1000s a month per household, taking a hefty fee from some of them.

That's what we need-- another middle man taking a even more off the top of every transaction.

Ha, I'm speaking from Apple's perspective thinking through how they could double in value. I don't think the current method of bills coming from everywhere with different payment requirements is all that great. If this new "middleman" provides value and protects me, then what's the problem? I wouldn't see direct integration with my apple device as a middleman but an endpoint. Furthermore, there are loads of whitelabelled middlemen in the current process, you just see it in one big bottom line number for each bill and may appear as service charges, admin fees, billing services, compliance, etc. Apple moving into this space kinda removes middlemen, reducing the number of touches between the biller and your wallet.

I think the single biggest thing they could do to get to $2T is build their own search engine, and ditch google completely. I think it's funny how some people (and Apple themselves) always say how Apple is so privacy conscious, while at the same time they made 9 Billion Dollars from Google by using Google as the default search engine in Safari (which most people don't change). So it seems they're willing to sell some of their users privacy for profit, and a very nice one at that.

If they just built their own search engine and used it as default, and it provided high quality un-manipulated results, I think even more would flock to Apple. Yes they'd take a (big) hit up front by losing out on all of that free Google money (estimated to be ~$12B in 2019), but then they could actually say with a straight face they were truly privacy advocates and won't sell their users data to Google via the Google Search Engine.

Saying how privacy conscious a company is, while literally making billions of dollars by indirectly selling a lot of their customers data, really rings hollow with me. Build a search engine. It's not as hard as building Apple Maps, and will do more good in many ways. Hell, even non-Apple people might use Apple search and fall in love with the results, bringing them into the Apple fold.

I think the single biggest thing they could do to get to $2T is build their own search engine, and ditch google completely.

Based on the series of frustrating searches I did in iTunes last night, Apple either isn't working on this at all, or isn't using iTunes as a testbed.

The search engine isn’t the only issue. I mean, the App Store allows Facebook and a bonanza of other privacy violating apps.

Apple to some extent launders responsibility for extremely useful services that require or use personal data by outsourcing it to others.

Why not actually turn iMessage into a privacy preserving social network?

For the same reason, as with search, I think the difficulty is underestimated.

To me, the difference is Apple enables Google as the default search engine by default, for everyone, while the app store is stuff the user manually opts-in for by selecting what to install.

This is unlikely to happen but I'd certainly like to see it happen, as Duck Duck Go simply does not work as a substitute for me, and I don't know that Bing is any better than Google privacy-wise. If Microsoft can make Bing, Apple can certainly make Apple Search - they have plenty of cash to throw at the problem.

I like DDG, although I still need to use Google every now and then. Apple could acquire and improve DDG instead of building an engine from scratch

Building a search engine to replace Google is too hard for even Apple to pull off. Maybe in the future there will be a different approach to solve the search problem and Apple could so sth about it. For now it is not possible.

Apple is not a small startup anymore, it can not even replicate DDG

It may be easier than maps - which I am not sure about. But the attempt at maps will most likely have dampened their lust for a similar endeavor.

I think we’re seeing Apple asymmetrically addressing this issue, by aggressively seeking to reduce Google’s (or really anyone’s) ability to track individuals via web technologies. At least for users of Safari.

> I'm speaking from Apple's perspective

But why? It greatly puzzles me how many "consumers" now think in terms of "brands" and dream up and discuss strategies on behalf of them. Companies should concentrate on fleecing customers, and customers should concentrate on not getting fleeced.

Companies and customers are just people wearing different hats, not distinct groups.

Most of us spend our day fleecing and then go home to be on the receiving end. If thats the terminology you want to use for the production/consumption cycle.

There's nothing that says one has to be wearing their consumer hat when using hacker news. In fact given the context of both the forum and article, it makes far more sense to me that people would be commenting as fellow fleecers not the fleeced.

Hacker news in general has more content relevant to fleecing rather than being fleeced. This article being a prime example.

As a consumer its of zero interest to me. What do I care of iPhones growth or lack of it? Reading about Apples market position and growth options only appeals to me as a producer.

> Most of us spend our day fleecing

Yet another poster berated me for considering it anything but rare... what gives?

At any rate, fleecing, exploitation and deception of all kinds are externalizations of costs that will always bite the groups and individuals who do it in some form, and the ecosystems that choke on it.

> here's nothing that says one has to be wearing their consumer hat when using hacker news.

Is there something that says you aren't allowed to wear it? I mean, the comment I was responded too sure is be written from that perspective. And as you say, everybody is also a customer. So why not always be in mind of that, why not refrain from fleecing people simply because you don't want to be fleeced? These hats aren't actual hats, they don't actually make you different persons.

>Yet another poster berated me for consdiering it anything but rare... what gives?

A matter of perspective on how you see the modern economy I guess. Fleecing generally means some kind of fraud or poor trade. When you used it to describe Apple just hypothetically moving in to a new market (without any fraud being mentioned) and then backed it up with a statement about how that's just the natural way of things, I took it as a criticism of the market as a whole. That the provision of new products and services is an overall fleece as it doesn't really improve the human condition. Just a general comment on consumerism.

So because I see just economic activity as a whole as one big fleecing, I consider fleecing to just be what we all do for our 9-5. I call people up and tell them about software they don't have. You make software it is you do and then people find it some other way or whatever else it is you do. Apple is charging more for phones than they did last year making them less attainable or whatever it is they do. It's all part of the same game. Making people feel bad about their current situation by either showing or creating a better one.

Other guy almost certainly doesn't agree with that. I don't know where you stand. I mean, as far as things go Apple moving in to billing/banking doesn't seem particularly evil. It's a "problem" a great many people face that could do with some "it just works" design. At least in the US by the sounds of it. So if you're against that it makes me think you align somewhat with me. However if you think it's possible to exist in society and not fleece then probably not!

>will always bite the groups and individuals who do it in some form, and the ecosystems that choke on it

Absolutely! My opinion of society as it is now or its future are not high! We're creating new needs and standards for others to live up to in order to meet the new needs and standards created by others. A circular flow of hustle where the steps we take power the very machine we're on! That's a huge negative externality.

>Is there something that says you aren't allowed to wear it?

No, I just took your question as a challenge to that way of action as much as a genuine question, just because of the context of it. The comments section of an article discussing business strategy, on a forum filled with business owners and aspiring business owners, ran by an investment firm. It's fleecer central.

>So why not be in mind of that why not refrain from fleecing people simply because you don't want to be fleeced?

Because there are core things I want, that if not biological which I suspect they are, are so deeply ingrained from whatever other source that they might as well be biological anyway. I can't attain those thing by not playing the game. I can't be a forest hermit and also be a well respected big deal with plenty of access to pretty women. I need to produce great economic gains and capture tons for myself, because that's what everyone else is doing. That's the standard to meet. Awareness that you're playing a prisoner's dilemma game doesn't do anything to change the outcome if you can't organise with and trust the other players to agree to outcomes. It can be hard to pull off with only two people,. It's certainly not going to happen with 7.53 billion.

Me abstaining wont change the world to any noticeable degree while condemning myself to a less content life than I already am.

> When you used it to describe Apple just hypothetically moving in to a new market (without any fraud being mentioned) and then backed it up with a statement about how that's just the natural way of things


> So because I see just economic activity as a whole as one big fleecing, I consider fleecing to just be what we all do for our 9-5

Wait, clearly moving into a new market is economic activity, all economic activity is fleecing in your outlook, yet there is a problem with me being "critical" because there is no fraud being mentioned? Yet you say it's all fraud, so according to you it's clearly implied.

I mostly took it as implied greed, the inability to "leave money on the table". That's not what most people do, that's not what all economic activity is, if that were true, we wouldn't even have built the civilizations capitalism now gobbles up.

> I can't attain those thing by not playing the game.

Start with not referring to abstractions like "the game". People say "hate the game, not the players", but that's like saying "hate the group, not the individuals that form the group". It's your game, not "the" game.

I know for a fact, from my life and the people I read, that you're wrong. If what you said was universal there wouldn't be so many exceptions. It's just that the people who somehow started to chase external validation only hang out with people who do the same.

As for being a "big deal with access to pretty women" -- be attractive, or let pretty women be, period. The second they fuck anyone for any reason other than finding them genuinely hot, they cease to be pretty, and only the ghouls collecting them as trophy don't see that. There is no "problem" here that isn't better solved with a cold shower and people growing up.

> Awareness that you're playing a prisoner's dilemma game doesn't do anything to change the outcome if you can't organise with and trust the other players to agree to outcomes.

Maybe you personally can't. Maybe you should learn from those who are doing it, instead of making excuses and pretend "everybody can't do what I think I can't do".

> Me abstaining wont change the world

Look at the wall of text you just wrote to keep it as it is. Even not writing it would have been doing more.

> Of course it's extremely easy to say, the heck with it. I'm just going to adapt myself to the structures of power and authority and do the best I can within them. Sure, you can do that. But that's not acting like a decent person. You can walk down the street and be hungry. You see a kid eating an ice cream cone and you notice there's no cop around and you can take the ice cream cone from him because you're bigger and walk away. You can do that. Probably there are people who do. We call them "pathological". On the other hand, if they do it within existing social structures we call them "normal". But it's just as pathological. It's just the pathology of the general society.

-- Noam Chomsky

You can't have your rationalizations and also be a still in the company of people, intelligent or not, who never ever gave in, never gave up, never became accomplices. Can't serve two masters, made a bad choice, and if you can say "tough shit" in the context of exploitation and deception, I'll say "tough shit" in the context of that.

as a counterpoint, you need to anticipate the actions of corporations to make rational decisions about how to interact with them.

but in most cases, these musings are forms of armchair quarterbacking, not some brainwashed adoration of a brand.

> Companies should concentrate on fleecing customers

This mentality is a problem. Companies have many valid motivations, and certainly profit is one, but long-term success is rarely predicated on gouging customers.

> This mentality is a problem.

How is that a "mentality"? How is it a problem?

> but long-term success is rarely predicated on gouging customers

It being predicated by gouging is not a claim of mine, success being accompanied by gouging it is enough. Would you say fleecing customers is "rare"?

>long-term success is rarely predicated on gouging customers

Razor blades, Inkjet cartridges, sunglasses, broadband internet/telecom, most luxury goods, payday loans, the entire diamond industry

I don't fully understand your problem, or how Apple could provide a solution.

Are you saying that the current system of having a checking/saving account, and setting up autopay/direct payments for your various bills (mortgage, utilities, gym, etc.) is cumbersome?

And proposing that instead, Apple should add up all your bills and provide you with a $amount to pay each month, and you just pay that amount into your Apple checking account?

The example you gave above, overpaying for a music subscription because it didn't auto cancel, wouldn't be solved by this system, Apple would just add it into the bill and if anything, reduce your visibility into what you're paying for and why. I'm not sure how they would know to "protect" you from a music streaming service you signed up for.

The method that works best for me is to use an app like Personal Capital/Mint to centralize financial info and get notifications on what I'm paying for, and when. It also summarizes what buckets you are spending into, so if any look odd you can dig down and investigate further.

> Apple should add up all your bills and provide you with a $amount to pay each month ...

This is my nightmare of where the subscription-culture is headed.

I happen to like “middle-men” — when it improves my experience and saves time. I don’t want to go to the refinery to buy gas any more than I want to spend a day driving to a dozen farms to pick up my weekly groceries. Middle-men are bad when they add no value. For example, subscriptions in the App Store — I love that because I can go to one place and cancel anything instantly without having to go through The NY Times or Angie’s List style phone “retention” representatives. For the business, it’s a win as well, I am more likely to subscribe to something when there is less onboarding and offboarding friction. With the App Store, I can, for example, change my credit card seamlessly for all of my subscriptions rather than trying to both remember and track down individual vendors. I also don’t trust some <random vendor> with my payment, or even contact information. That’s worth value to me. I would love it if I could use Apple Pay for everything, such as utility payments or insurance payments. Dealing with MetLife for example, is a nightmare. To set up automatic credit card payments, you have to fill out a 2-page paper form and mail or fax it to them.

A long time ago I hoped Apple might set up some sort of micropayment system for online journalism. I don't want to get subscriptions to all of the news sources I appreciate, but I'd love to throw some money their way.

I think this would fit rather nicely into Apple News. Get all your news in one place and optionally set up a monthly subscription that gets split proportionally between the publications you read.

> And manage all my regularly scheduled bills like utilities, rent or mortgages. I would love for a trusted intermediary to handle these things.

Isn't that far easier to set up scheduled payments with your bank or allow the company to use direct withdrawal?

For the payment itself, yes, if you want it all automated. Automated payments are to the biller’s enormous benefit (ahem cable company...) To manage or keep un-automated or see reports or change features, it currently requires a separate app, login, UI, or other legacy portals. It’s annoying. Apple could streamline it, and remove a layer of complexity while taking over the transaction (and gain data gold mines)

> Apple could streamline it, and remove a layer of complexity while taking over the transaction (and gain data gold mines)

While I strongly agree with your top-level comment, and I think Apple's brand is very valuable, a lot of that is from a trustworthy, privacy standpoint. Small nitpick, but I think on the "data gold mines" point, any area where collecting data is paramount is an area that Apple should not enter to maintain that brand value (i.e. their Maps not collecting data as much as Google's is a real pitfall).

The areas you listed above are largely possible without collecting that much data, which may be the exact reason Apple should pursue them. :)

I agree completely. Isn't it how apple chooses to use that data that matters most? Choosing to help me with this information vs. choosing to sell to advertisers. Or maybe even more to your point, apple could NOT use the information!! Apple keeping the data encrypted to my device means its no longer available to the market. I friggin HATE receiving notifications from lending institutions about "what we share" and its a long list of advertisers, and there's not a thing I can do about it. (Edited this comment quite a bit to be more clear)

I rarely make changes so I don’t see the value here. I have every recurring bill setup to auto pay. If I had to manually pay bills I would go insane.

Interesting. I choose to manually pay all my bills, and avoid monthly subscriptions for things. This allows me to see billing shenanigans as soon as companies attempt them, rather than months later. Comcast just recently raised my bill by 15% or so because that's what they do, and I was able to avoid it before paying it. With auto-pay I would have just kept paying the higher rate. I also try to manually pay everything to avoid forgetting subscriptions, like OP mentioned.

I dont know how it works where you live, but I can just log onto my bank web page, and reverse the payment if i dont agree with it. Then I can block all charges from that company until i activate it again (or never). All it requires from me is to log on every 2 to 3 days and check the account. That is something you should do anyway to quickly catch any fraud.

Same here. I recently saw that my cable internet bill was going up, and successfully argued my way to a higher tier of service for a lower monthly price. That extra $10 a month was about to drive me right into the arms of their main competitor. If I had been on auto-pay, I might not have even noticed.

I bought a new cable modem to take advantage of the higher tier data rate, so I'm not actually ahead of things yet, cost-wise, but another couple of months will do it.

I think we need that monthly payment friction to pressure companies to keep up their value proposition to customers. If I have to continually re-choose to be a customer, the company has to do more to keep me satisfied.

> Comcast just recently raised my bill by 15% or so because that's what they do, and I was able to avoid it before paying it. With auto-pay I would have just kept paying the higher rate.

I also disabled autopay for similar reasons. This helped me notice that Comcast had started charging me for a TV tuner that I didn’t have (I don’t have their television service, only internet). It took three months and multiple calls to get that resolved and credited. I might not have remembered to follow-up if I didn’t have to look at the bill each time.

Frontier is the same. They keep on increasing prices when their speeds keep on getting worse.

That’s what we have in America. Internet run by a couple of mafia like companies who have the government wrapped under their fingers.

Yes I would very much love if Apple threw a couple of billions and shook the internet pipes.

Is auto-pay really unrestricted? In my bank I can define a limit for any direct debits, so if they overcharge, it'll be automatically denied, and I'll be informed.

I review my expenses quarterly and adjust my budget as needed. I catch those types of shenanigans there - most of the time.

Enabling recurring bill pay across the board is inviting overbilling, especially from services you no longer use. There's a reason companies incentivize you with a $5/mo 'green savings' to go autopay e-billing. That is fine if you don't care, some people's time is more valuable than others, but the potential savings gained from reviewing bills before paying is substantial.

This is true if one doesn’t practice basic accounting. Most people don’t, but without it, recurring bills are likely the least of one’s financial issues.

This costs me about an hour a month, which I spend noticing the bills I pay rather than paying them by hand.

I completely agree. Apple needs to move into full banking.

Mint, 401k Management, Bill Pay, TAXES, Yahoo Finance, Student Loans, the old Manilla (collecting ALL aggregate statements in one place forever.)

They should buy Schwab, Envestnet, Personal Capital, YNAB, and Motif and slap a Robinhood/Monzo coat of paint on a new frontend. They could go from Apple Pay to Best Banking Experience in the World, in no time. As far as "Services" go apple competes in Music, Health, Maps, Messaging. They dont compete in Backups, Photos, or Banking. I would love for Apple/Google/Facebook to move aggressively against Intuit/TurboTax, if for no other reason to create a more competitive environment.

Imagine Apple getting into LENDING. They have cash up the wazoo. They should be able to determine who is most likely to pay back a loan, and come up with pretty accurate interest rates. And at that point, why is apple just a personal bank, and not a corporate bank as well, fully taking on QuickBooks. And if they dont want to get into business logic programming, become a Financial version of AWS and offer finanance, accounting, and banking APIs as a service, for App Developers to build on top of, like a AWS/Firebase/Pulse meets Chase/WF/Intuit.

I find it VERY odd that none of the big players (Microsoft, Amazon, Google, Samsung, Sony, Facebook, Apple) have done anything more than a Wallet and Money Transfer. Why is Mint/Personal Capital/YNAB not on everyones radar. Why are TurboTax and 401K management not being looked into by ANY of the major tech companys? So many people have a bunch of accounts that need individual management. Make my life easier Apple/Microsoft/Google/Facebook.

Ive outlined this idea before. https://news.ycombinator.com/item?id=12868316

I ALSO think SOMEONE should come up with a "financial ID." Instead of signing into banking sites with "Facebook" or "Google" each one has its own unique login, password, security questions, validation. One Financial ID, isolated from Social IDs could drastically cut down on phishing, hacking etc. Smaller institutions would not be running their own Identity/Trust silos in isolation. Resources to build trust over who is who could be shared. Intuit has something like that for their services, but it really needs to be a Chase/WF/BoA effort like Zelle. "Sign in with your Pony ID"

I think becoming a bank was a big hassle and being a bank is less profitable than core Microsoft or Google activity. Having said that, PSD2 regulation in EU might change all of this - any institution will be able to do banking operations on behalf of the customer. There are some requirement too, but the bar is significantly lowered.

Apple doesn't need to be the bank, just control what the banks have access to. Apple could parse out what it means to actually be a bank. Working Capital (or day to day bill paying) is different than long term savings, lending, investment accounts, and all the other retail products they are trying to invent. Each is a commodity service, but billing has a significant streamlining/comptroller opportunity that could be helpful to Apple's profitability.

The banking and payments infrastructure is such that most of it is handled by intermediaries and other companies anyway. Most banks, for instance, do not issue their own cards or process their own payments - this is done by an intermediary. It's probably easier for Apple to break into banking by making the right partnerships than you think.

They already have the partnerships in place with ApplePay, I don't think they would every want to open themselves up to the type of scrutiny/regulation chartered banks face

> I ALSO think SOMEONE should come up with a "financial ID." Instead of signing into banking sites with "Facebook" or "Google" each one has its own unique login, password, security questions, validation. One Financial ID, isolated from Social IDs could drastically cut down on phishing, hacking etc. Smaller institutions would not be running their own Identity/Trust silos in isolation. Resources to build trust over who is who could be shared. Intuit has something like that for their services, but it really needs to be a Chase/WF/BoA effort like Zelle. "Sign in with your Pony ID"

We do have those in (some parts of) Europe. BankID in Sweden comes to mind.

I have never had a bank that allowed you to log in with social media accounts. Which one(s) have you seen with this?

I don't think you can say that bank ID is "isolated from Social IDs".

By social ID I mean facebook/twitter/google. I dont use any of those IDs to sign into banking websites. I can use facebook or google to sign into a bunch of other sites, as my authentication.

this... makes no sense strategically (though i understand your apple fandom). apple is a consumer electronics company. banking is a completely different industry, and a heavily regulated one at that.

apple's move here is to use applepay as a platform to allow other companies to do those things. they're executing that strategy quite competently. they won't (i.e., can't) ever become a bank (consumer, lending, commercial, or any other kind).

(and your overuse of capitalization is making me twitch uncontrollably =)

Its not really apple fandom, id be fine with Google or Microsoft or Facebook getting it right too. I do think Apple's stance on privacy makes them the most desirable company to handle taxes and investments? It makes strategic sense in that Apple is positioning itself as the tech giant to be trusted with your: communication, finance, passwords, photos etc.

Apple is not just an electronics company, and their latest earnings report makes that exact point. Its about subscriptions and service, not devices. They want to hook you on Apple Music.

Fintech isnt just banking. Intuit, Personal Capital, and Envestnet are services that layer on top of banking.

What I described is not an all or nothing approach, its a bunch of ideas. Apple could very much add money management services without offering lending.

Making someone like Schwab their "first party" bank would mostly be a commitment to customer service and "it just works" more like Apple Stores, than anything else.

I sincerely hope this is simply missing a `/s` at the end.

GE is/was into Finace. Seems it didn’t go well

I think an Apple (read integrated, user friendly) solution to internet of things could be more imminent, and interesting.

One of the draw back of the current solution for IoT is connecting different eco systems, such as GE light bulb to Amazon Echo. If apple have a solution that is elegant and 'just works', i'd be interested in that

Apple already has a smart home initiative; what am I missing?

There were early complaints that Apple was making too many demands on manufacturers with regards to security, but given the utter shitshow that is IoT these days, it sure seems like it was a good idea.

You're missing a range of Apple smart home products - and so is everyone else, because they don't exist.

Apple could have killed it in this space. The development costs would have been relatively low, and there was a wide-open goal with the possibility of much-improved security and privacy, high quality industrial design, AI, and yet more links to Apple devices, as well as providing a home network foundation for future products such as health monitoring devices.

Instead Apple handed the market over to 3rd parties and... not much of interest happened with HomeKit.

No missing anything :) Didn't know they already have one.

I'm sure there's another level they could take it to. Here's HomeKit.


Do you have sufficient disposable income that you don't notice a $20 bill coming either out of your bank or credit card for an entire year?

I would wager that you need to pay more attention to your finances. As the old addage says, "look after the pennies, and the pounds will look after themselves"!

While that sounds crazy on the surface, it really isn't. For one thing, your necessary household expenses (rent, food, utilities, etc.) don't generally scale linearly with your individual income; your expenses don't double when your income does. For another, absolute value, not just percentage, matters. Spending an extra $240 a year matters a lot if you're making $25K; if you're making $150K, it matters, well, less.

I always heard adages and advice about "watching pennies." In practice, though, I've found that I'm far better off looking after the pounds and not worrying about the pennies: that is to say, set up savings targets that get treated like necessary expenses, and to not worry too much whether lunch is $7 or $12.

I totally agree, and usually do. My wife was not happy about spending $240 on Phish :) My point is that it is very complicated to track everything. My household of 5, my businesses, my recreation. I guess the way to wrap up my gp comment is that Apple could move into this space becoming a major value driver to consumers.

I can imagine it is very hard tracking that!

Is there a way you could split each area to a separate account/card so that you can spot odd spendings? eg. recreation on one, business on another, food on another, fuel on another, general household/mortgage/insurance on another, and then another for miscellaneous ?

Sounds like an opportunity for an app of sorts....

I used to have this exact same problem. I'm currently using privacy.com to manage all of those little one off subscriptions. It's basically unlimited virtual credit cards. You can pause them, you can add limits to spending, you can delete them if youre done with the service and the service won't be able to charge your bank account. I just discovered it and have been using it for a few months and it's awesome. I highly recommended for internet purchases.

I had that with Simple but they went out of business early this year. :(

Yeah I didn't realize Simple did that. That's awesome.

I'm enjoying the hell out of it currently with these guys.

As far as I understand Apple's current business model is heavily geared towards dominating a segment and charging handsomely for it. If Apple were to go for 'quantity' their margin, at least per sale, would suffer and they would probably run into antitrust issues. I think this is a missed opportunity for Google, Yahoo, Microsoft, Mozilla and maybe even Netflix and Facebook. Not necessarily for Apple.

This is why I have been calling for them to buy SNE. It has everything AAPL needs...all the movie content, music content, Playstation, High Scale TV's, best mobile camera components, etc, etc.

Mr BuyBack Cook could have bought Sony 3 times over already.

This, I don't understand why Apple hasn't brought SNE as well. In the pre Apple TV original production era it makes less sense, now literally everything SNE has could argument AAPL. I wonder if Steve Jobs were alive would he have bought it, he loves SNE!

This would only work in an unregulated market. Thankfully, most of the countries around the world do not take kindly to one company owning entire households and will take steps to prevent this from happening.

As a parent, I would like to see a better offering of cloud backup for photos and videos. The space on newer IPhones keeps growing with each release. I use something like backblaze on a central computer at $5 a month for unlimited backup. I would like to see Apple compete a little more on this end.

(disclosure: I am a Google SWE, but I don't work on photos)

Google Photos does full res backup - easy to get working with android - not sure about other devices or non-phones.

I wonder how many apple households locked in are actually locked in.

We have 2 apple computers, and apple tv, 4 android tablets and three windows computers, 1 iphone, 2 android phones.

I dont think any of my friends are apple-only, even those who love apple.

Is an apple-only household really that common?

No idea, but my comment is focused on how Apple could deepen the moat and find evermore cashflow.

You point out two distinct aspects, how locked in is a locked in household, and how many households are actually Apple only. I bet it’s rare to be all-Apple households, but Apple should be finding ever more reasons for a household’s next purchase to be an Apple related one. Since my locked-in household still only buys so many devices per person per 2-3 years, Growing services is another way to do it.

As far as degree of lock in, I’d say not much, I think it could all collapse with a few major missteps. There’s an enormous amount of pressure on the board of directors and C suite to maintain the expected quality.

Great idea. This way when this powerful gigantic entity will screw up, or worse, misbehave, all your life will be destroyed at once. It's very efficient !

Sarcastic comments are unsubstantive and generally not appreciated on hacker news.

I do concede your point that greater centralization isn’t really in the consumer’s best interest. I stand by my point that it could be on apple’s radar for ways to continue growth, in its best interest. My parent comment is not a consumer wishlist but that of a (rookie) investor.

I appreciate that Ben took the time to read between the lines of what Apple has been saying, to tease out how Apple is thinking about Apple. It's clear that's why he has a successful business.

This article made me stop and think about Apple's future, and to be honest, the future of computing. I think it is clear that in 10 years mobile computing has reached maturity (which is astounding). There is no broad use-case advantage that iOS has over Android (ie, I can communicate on both of them, I can get directions on both, etc).

It seems as if we have reached a valley of sorts, in which the use-cases and potential businesses that can be built on top of a computing platform that is always connected, always with us are mostly tilled ground. Discovering and inventing new ones takes an enormous amount of effort and ingenuity. It would be easy to think that most of the disruption has already happened.

However, what surprises me is that Apple is doubling down on performance. The processing capability of iPhones continues to rise, even when we see that the software that uses that capability has diminishing returns.

My best guess is that Apple is playing the long game, and that they see the investments that they are making in performance will pay off greatly in the coming years, because suddenly our phone will be more powerful than our desktop. And, while it is easy to scoff at that as being unnecessary, I think it actually will begin to unlock new use-cases that will lead us out of the current "valley of diminishing returns."

The obvious candidate here is AR, but I think it actually is broader than that. It is clear that Apple is moving towards a system in which the iPhone is a computational Sun, around which multiple accessories "orbit". I think such a system, taken into consideration along with cloud computing is actually incredibly exciting, and I think (as much as this audience might dislike it) that desktops and laptops truly are the current past.

An interesting aside from an iPad Pro review noted that Apple's silicon designers are focused on the best design for the purpose of that particular piece of hardware.

I think that's an important insight on how and why Apple is lapping the field on the processor side.

They've hired the best team they could and freed them from all constraints other than physics based ones.

Take the best available node process, sprinkle in any custom algorithm acceleration necessary for voice/ai/camera/ssd throughput, and wattage consumption vs battery, figure out heat dissipation constraints, then max out performance.

No need to create a variety of silicon at slightly different price points- iPhone XR gets the same chip as XS, despite being a cheaper phone. New iPad does get one, since it has to push more pixels and has thermal headroom.

Meanwhile Intel or Qualcomm are creating very artificially specialized hardware at a multitude of price points- while also having to keep off features on their SoC's that don't have broad applicability.

The genius of this move into hardware is paying off more each generation.

> and that they see the investments that they are making in performance will pay off greatly in the coming years, because suddenly our phone will be more powerful than our desktop.

The only way I can see that happening is if people stop upgrading their desktops for years and years AND phones are able to make steady performance improvements AND people don't stop upgrading their phones regularly.

Larger form factors (both desktop and laptop) have physical advantages when it comes to performance (e.g. cooling, more power), and I don't think they can be beaten by a smaller form factor in a fair competition (e.g. chips at similar process nodes).

If mobile computing has reached maturity like desktop computing has, I can see people holding off their mobile upgrades the same as they hold off their desktop upgrades, which would mute the main way mobile can get a performance edge over desktop. The burn-the-ships software update cycle that's more common on mobile may mitigate that, but it's coming to the desktop so it may not be much of a difference in the future.

I agree with all of this. I'm not arguing that laptops and desktops will disappear. But, when people are deciding what to spend money on, I think laptops and desktops will become increasingly marginalized and niche. Also, I think that it very well might be the case that Apple can deliver performance parity compared to larger form factors. The latest iPad Pro is an indication of where iPhones will be in a year. The new iPad rivals the MacBook Pro 2018 in CPU benchmarks [0]. Now that they are designing their own GPUs, I expect the gap to continue to close.

Why would a consumer spend $1500 on a laptop that they use 1-2 hours a day, compared to a phone they use 8 hours a day and is always with them? I'd argue that we are already at the point where most consumers aren't even at the point of considering traditional "computers" in their decisions.

You touch on a good point about software. I think it is the biggest current stumbling block. It is currently the case that desktops and laptops offer significant workflow advantages over mobile devices, even for consumers.

[0] - https://browser.geekbench.com/v4/cpu/10567048

>Why would a consumer spend $1500 on a laptop that they use 1-2 hours a day, compared to a phone they use 8 hours a day and is always with them? I'd argue that we are already at the point where most consumers aren't even at the point of considering traditional "computers" in their decisions.

I think as long as you act primarily as a _consumer_ of other people's content, this is accurate. As soon as you want to _create_ media of your own in any significant way, you then need a keyboard, a larger screen, a decent pointing device, etc. (maybe not all of the above for a particular creative endeavor, but these sorts of things).

The question then is, what percentage of people create enough to need creative devices, and what percentage are happy just being consumers? I think Apple is focusing on the creatives.

> There is no broad use-case advantage that iOS has over Android (ie, I can communicate on both of them, I can get directions on both, etc).

Compliance and security is the magic of iOS. It's pretty trivial to deploy them securely, whereas with Android is a mess that requires lots of third party stuff. Hopefully Chrome will come to the phone someday to address that.

If you really care about device security, it's pretty difficult to not use an iPhone. The only exception that is a clear winner is for field service and other folks who operate in extreme weather conditions, due to iPhone's narrow operating ranges.

> However, what surprises me is that Apple is doubling down on performance. The processing capability of iPhones continues to rise, even when we see that the software that uses that capability has diminishing returns.

Moving the goal posts on performance, beyond what is reasonably necessary, simply incentivizes and challenges developers to start making bigger and better app experiences. This is a passive form of ecosystem insulation that further separates Apple customers from Android customers.

There was a meme a couple years ago, maybe, that on Snapchat you could tell which one of your friends used and iPhone and which ones used Android purely based on the image quality of their photos/videos (I don’t think this is still true). If Apple can silently get devs to start developing apps for the A12, the gap between an Apple experience and an Android experience gets wider and wider IMO.

Apple is a bit strange when it comes to creativity tools. They have Final Cut and Logic, both basically major professional production frameworks for film and music, yet they don't have such thing for 3D content, something like a more intuitive Blender, Modo or Cinema 4D, full 3D production suites. Getting into 3D art & design and operating those tools is still quite hard, harder than it should be.

For historical context, the iOS/Android Snapchat quality thing was because on Android they would take a screenshot of the preview screen of the camera. As of earlier this year, they're actually using the proper API on Android and so things should look better there.

It doesn't particularly speak to the power of the devices, it was more a way to cope with the spectacular fragmentation of Android hardware.

Ben always does a good job in his weekly articles.

I was thinking AR/VR when I read your paragraph 4, and then you said it at the end. So, I completely agree with you. I think most disruption is behind us, but the new wave of Deep Learning enabled computer vision/speech recognition will probably trigger a new wave of use cases and thus new business/services.

I agree. Imagine AR Kit being manyfold powerful and useful not just with games and gimmicks but useful stuff. But only a small percent of hardware, the latest hardware can run those features. That would considerably hinder the adoption rate and the market won't have enough incentive to double down on it. Instead a good proportion of older hardware able to run those new features will suddenly create a whole new market with just a software release. And I do think iPhone is doing lot more computation than people appreciate. A very easy example is that of the Photos app. Face recognition, scene detection, and object detection among many other things happen on device. Comparing that to Google Photos, none of that happens device; all computing is done on cloud. So it gives Apple an opportunity to decentralise all that computation and optimise ,related costs while also upholding its privacy edge over the competing platforms.

Even before we get to ubiquitous AR (capability), I think the on-device AI tools is a big differentiator. Right now, not so much, but I think public opinion on privacy is shifting a bit with what we're seeing about Facebook, etc.

It's a little like a solution looking for a problem, but it seems like a good bet that we will have some of those problems in the future. I guess more like a solution waiting for a problem?

This is what I'm thinking too. It's pretty clear (at least to me) that Apple is trying to make the future of computing look more like iOS, albeit very slowly, instead of making today's tablets look more like OS X, despite everyone saying that this is what they want. This would explain iPads that are faster than today's MacBooks that don't have a proper filesystem yet. It's like they are redoing computing from the ground up, hence the "What's a computer" commercial.

I’m starting to think that iPhone SoC performance gains are just a side effect of them investing heavily into their controlled hardware ecosystem. But the real payoff is in their wearable SoC. The watch is seeing huge performance gains. And the W1 chip in their headphones is similar. Low power, high performance wearable chips are something their competitors are far behind in. This is where Apple are headed.

It’s like building a high performance supercar to learn and grow in order to understand how to bring that technology to a lower powered and more effecient vehicle.

> There is no broad use-case advantage that iOS has over Android

This isn’t really true. At least, once you start using iMessage it’s no longer true.

If you try to switch to Android you will be silently dropped from any iMessage group chats you are in. You will also no longer be able to send high quality media to iPhone users.

If you are a developer with a SaaS business, be very afraid. Apple is going to do everything possible to collect a 30% tax on your business to fix their growth problem. It’s ironic, really. The company that mastered tax evasion is about to become the world’s most determined tax collector.

Or you can just distribute the apps without using the platform's payment processor.

No one says you have to use Apple's payment processor. Direct users to sign up on your website and then have them download the apps free of charge.

Btw; So does Google and Microsoft. They all take a cut of every app sale. The difference is the rate they take out.

Oh, for Apple, it's 30% the first year of the sub only, it goes down to 15% after that.

> No one says you have to use Apple's payment processor. Direct users to sign up on your website and then have them download the apps free of charge.

Apple has removed apps from the App Store for doing this [1]. You have to provide an in-app subscription option that gives Apple the 30%/15% cut.

[1] https://changemap.co/hellocode/exist/task/1855-apple-blockin...

Interesting, I haven't heard of any other apps having this issue.

Did Exist offer a way to sign up new accounts in their app? If yes, that may be it.

Slack doesn't have IAPs and yet, I can sign in with paid accounts just fine. There are other apps that were like this but they didn't have a way to sign up in-app IIRC.

Yes, you can do this, but you can’t have ANY connection between your app and your web site. Your app can’t mention a subscription, can’t link to your site, etc.

So it only works if users first go to your web site, sign up, and then get the app on the App Store. If they get your app on the App Store, there’s no way to convert them without Apple’s blessing.

Essentially Apple contractually mandates friction between you and iOS users and then charges you to alleviate it.

It's a pretty good business model tho. Amazon, both retail and cloud, costco, are both doing pretty well.

Huh? Are you implying that if I create a web app, Apple is going to somehow take 30% of my revenues? How?

Presumably if there's an iOS app for it and users are able to subscribe to your service via the app.

If it means I don’t have to handle payments in my own system and it improves distribution, that’s an awesome deal. That gives me more cycles to improve my actual product and not spend so much time with billing and payments.

Ib4 apple downvote storm.

Dev here, I actively campaign against Apple (and FAAG) products.

They seem like a danger to our capitalistic system as they have enough power to sway politics.

Apple has always been anti-dev from my point of view, forcing users to use their hardware and pay to produce apps.

While there doesnt seem to be many 'good guys', Apple has used their weight to constantly do unpopular things for their customers and developers.

My only hope is that Apple will fail to innovate, and users will begin to go toward more consumer and dev friendly high end products.

What about the fact that Apple is the only big guy not profiting off the mass harvesting of personal data? I think the market is significantly worse off without their influence (although this article does raise alarm bells).

They have hostile business tactics, does that wash that they use your data internally at Apple only?

For someone that doesnt mind getting tailored ads, the privacy argument is a non-issue. I am curious how long this will last at Apple as well, they don't strike me as a company that wouldnt sell your data.

EDIT: HN is very weak when it comes to critical thinking on Apple products...

>toward more consumer and dev friendly high end products.

Such as?

> They seem like a danger to our capitalistic system as they have enough power to sway politics.

Business owners using their power to sway government is the foundation and backbone of capitalism, historically (sure, it may violate post hoc rationalizations of capitalism, but those have little to do with capitalism as it has existed in the real world anyway.)

- They seem like a danger to our capitalistic system

Good! Capitalism has failed a great many people.

Well, I'm not trying to goad a downvote storm. But, having dealt with Apple, getting my China factory approved in the Apple MFi program. In about three months, their terrible and unethical business practices in dealing with their Apple MFI program factories in China, literally made me completely switch my business strategy, and end up telling them to shove it. Blessing in disguise. I'll prefer to build popcorn stands, literally anything, is better than spending our time and resources to be abused by them.

Given that Apple just reported a .4% unit sales increase I find the sheer volume of gloom and doom interesting.


IDC just reported that during the same period the overall smartphone market shrank by 6%.


Samsung just reported a 33% year on year smartphone sales drop.


Growing unit sales while the market is contracting doesn't really scream "doom" to me.

Relative success can still mean absolute stagnation.

I think Apple has some serious issues with growth; they have expanded a huge amount based on a few key and impressive products and ideas at the right time and in the right way, but I think they've ridden that pony almost as far as it can go [but they've done a better job than most at it]. They have done very well with it, but like most corporations who do that, they usually miss the next big thing, because it is some scrappy underdog, or just another competitor with a little bit more insight, who sees the next big thing. I think they will do just fine with their current market and design ethic for their current audience, but I don't think they are going to see any more rapid expansion unless they get some major revitalization. They've lost some of the key risk-takers and creatives and I think they've entered the management mode once more.

> I think Apple has some serious issues with growth

Apple has just announced a 20% year over year growth.

> but I think they've ridden that pony almost as far as it can go

17% growth in the services division that is now bigger than the Mac or iPad, and bigger than Facebook and Netflix (combined)

31% growth over year for the small accessories. Apple Watch, HomePods and AirPods cathegory.

The cathegories that poundits were betting hard on Apple losing and the "press" making downright negative reviews?

> They've lost some of the key risk-takers and creatives

Who are those?

That Tony Fadell that has been aquihired by Google and then fired because his company outright failed?

> > They've lost some of the key risk-takers and creatives

> Who are those?

Well, there was this guy Steve, for one...

I think you're right, and that's what makes Apple such a historically powerful company. They're the most valuable public company on the planet and there are still things where I'm like "if they just did this they could be so much bigger."

That's insanely impressive; to be honest, would you rather the situation be "they're the largest company on the planet and they're extracting all the growth opportunities in the market that I can see?"

What is the next big thing that they have missed?

I think it's pretty clear that online video slipped right through their fingers. They were early with Apple TV and Steve Jobs' assertion that he had "cracked" TV back in 2011. And what happened? They did almost nothing and let Netflix run away with it. Apple wasn't even a contender. Same thing goes for mapping, which was highlighted in that recent blog post. They came out with Apple Maps years ago but almost did nothing with it...it feels like they half-assed the whole project and are now flailing in catch-up mode. It seems their status as also-ran is now permanent. They shut down their router business while Ubiquiti (run by a former Apple engineer) has run wild in the networking world and looks primed to completely disrupt Cisco over time. They clung onto Apple Music, pot-committed to a model that looked outdated the moment Spotify launched in the US.

They've had some successes like Apple Watch, so I wouldn't write Apple off just yet. But yeah, the things they've missed which they should've known better about is a bit concerning.

> They shut down their router business while Ubiquiti (run by a former Apple engineer) has run wild in the networking world and looks primed to completely disrupt Cisco over time.

Out of everything you listed this is the one that I don't think Apple is really missing out on, as they were never positioned to be a major player outside the prosumer space which often has needs beyond what Apple was providing. The average consumer is an idiot when it comes to networking, most of them run ISP-provided equipment, and those that don't are often informed enough to get hardware to run DD-WRT/etc. or buy a proper prosumer solution like Ubiquiti's.

Back when wireless routers weren't provided by default with your internet service, a half-decent one wasn't cheap, and people just wanted a simple solution that "worked" then the Airport had value in ensuring Apple's other products had connectivity. There's no benefit to them doing this now, and Apple is not positioned to get into the prosumer/business SDN market that Ubiquiti is in.

You're right, one of these things is not like the other. However, I think in the next ten years, Apple will regret having neglected this product category, and Ubiquiti is making inroads into consumer-grade products as well as service providers and enterprise-level networking. I just think it's interesting that Ubiquiti was born out of Apple and was able to turn this into a super interesting and profitable business even though there is a perfectly logical reason as you note. I suppose I just think Ubiquiti is so fascinating that it will be evident one day what a mistake Apple made.

Two brief points:

1) Just because the Ubiquiti founder came from Apple, doesn't mean that Apple should be in the quasi-enterprise networking space that Ubiquiti is. Apple's networking gear was always aiming to be simple, plug-and-play hardware for people who don't want to think about networking. That's pretty much the opposite of Ubiquiti's products.

2) When Apple was still doing things like networking, we had a lot of people complaining that their focus was spread too widely, and their core products were suffering.

> Apple's networking gear was always aiming to be simple, plug-and-play hardware for people who don't want to think about networking.

This is the real kicker in today's landscape and why it doesn't make sense for Apple to even be in this market, there's no such thing as "plug-and-play" for the majority of consumers these days when for proper functionality you must go into your ISP-provided equipment and disable the WLAN radio, put it into passthrough mode (if that's even possible, some ISP's like AT&T don't even provide equipment with proper passthrough mode), god help you if you use DSL and need to get PPPoE credentials which are automagically configured for you these days by some captive portal when you first plug your equipment in.

It's literally harder to use your own equipment these days than it used to be before every ISP started providing integrated gateways, so the current market for standalone equipment is people who need something other than "plug-and-play" - because they already get that from their ISP (even if the hardware usually sucks, it's good enough for the average consumer who thinks they get "their WiFi from Comcast").

Apple doesn't need to be in networking anymore, there's not a large enough market for products like the Airport AP's anymore and if they actually want to compete they have to battle with the likes of Ubiquiti, Cisco, Ruckus, HP (Aruba), etc. - not ASUS, TP-Link, Buffalo, Netgear, etc. Seeing as they have no plans to revive the Xserve, I doubt they care about having a foothold in wiring closets and datacenters.

That, and access points/routers aren't things you buy every year or two. Our AirPort Extreme worked for five years before I replaced it with a Google Wifi mesh (and it was still working when I did so). If it were $1500 or so, then keeping it would make sense (and nobody would buy it), but it was $250. I think Apple got into the AirPort game because they were one of the first companies to push Wi-Fi on everything (a great strategy too, as it's a big reason behind why iPhones are so successful now), and because most ISPs provided crappy access points/routers, they could step in and fill the void.

I don't believe these are "missed opportunities". A true missed opportunity would be, say, Microsoft and the phone market. The train came and went on that because of the network effects of a phone platform putting momentum behind incumbents.

Look at Apple Music. Spotify was released in 2008. Google Play Music All Access in 2013. Apple Music was released in 2015. For being technically 8 years late, APM has 50M subscribers, compared to Spotify's 75M [1] (GPM is probably harder to measure because the subscription is combined with YTP/YTM, I pay for it but literally never use it). If that wasn't impressive, realize that APM is marketed just to Apple users, whereas all those other platforms do everything they can to get users on every platform (APM is available on Windows and Android, though I'd love to see the user counts for those platforms over the competition, likely very low).

Apple Maps and the routers are really weird things to pick on. They're not core at all to Apple's business model. They're fungible products; you can use any mapping software or any router and get 98% of the same experience. Apple simply doesn't invest a lot in fungible products; they invest in products where they can make a true 10x difference for their customers. iCloud Drive is the same way; customers want it so they'll make it, but they're not going to drop $5B developing it.

An Apple TV subscription service is more similar to APM than anything else, with the exception that music streaming services are expected to have "everything" on the platform whereas streaming services just need to host those handful of shows you watch to justify the subscription price. And they might have a great lineup coming up the pipeline here; they've ordered shows from Ronald Moore, a TV adaptation of Foundation, a comedy from the co-creators of Its Always Sunny, a show produced by J.J. Abrams, etc; I think they're in a good place to drop a big announcement and secure a LOT of subscribers. [2]

[1] https://www.forbes.com/sites/careypurcell/2018/05/15/with-50...

[2] https://appleinsider.com/articles/18/07/11/here-are-all-of-t...

Online video and Maps.

Markets that started before the iPhone and when Apple was collaborating very closely with Google.

Apple let Google win in those markets without opposition and then Google stabbed Apple in the back with Android.

Reminder that the original iOS versions had YouTube built in, and Google Maps.

Not only were they built into the OS, pre-dating any third-party app capabilities, but the native apps literally were designed by Apple engineers. Like, Apple created the entire blueprint for what the end user experience on mobile was supposed to be, and was happy for Google to supply the backend service and collect all the analytics and advertising revenue.

Maps is hardly the next big thing. What you do with Maps is potentially the next big thing. Online video? They pretty much invented that with the iTunes Store on software and Apple TV on hardware. That the subscription business model isn’t a thing at Apple isn’t “missing” anything. The difference between the iTunes Store and Netflix isn’t one of technology but of business model. As we have learned time and time again, being first is no virtue. Through iTunes, I have access to almost every movie: through Netflix, I have a curated selection with a high proportion of low-quality filler. If Apple can take the next step with subscriptions, it could be curtains for Netflix.

Smart speakers and possibly smart home in general. They won't/haven't missed entirely, but they are quite behind Alphabet and Amazon.

I think that depends how you define "behind". HomeKit has some functionality gaps at the moment, and less hardware supports it, but what it does do, it does tremendously well and with higher security bars than some of the competing technologies.

I have a full Homekit setup and I have to agree. I didn't try Google, but Amazon was a confusing experience. At the end of it turns out requests to turn off my lights had to go over the internet, vs Homekit where all device signaling is handled locally.

But what I think the parent was referring to is that Apple has no hardware offerings for the home aside from Homepod and Apple TV. Meanwhile Google has Nest and Amazon has Ring.

Yes, this is correct. Apple doesn’t make money from HomeKit directly. That’s just a feature of their ecosystem: not a product within it. Currently, Apple only has the HomePod which is frankly quite weak relative to a Google Home or Echo. Then of course there is no Nest or Ring competitor product line.

Good one, forgot that.


Openness is a pretty old big thing at this point. Apple haven't been open since the Apple II and it's worked out fine for them. Arguably the 'open' camp has missed the current big thing - privacy and security.

Yes they are one thing, just with two sides to it.

Given the way Google has walked back the Android platform's "openness" by moving more and more APIs that modern apps require access to into Google Play Services, they are now missing out on security, privacy, and openness.

Right, because being open says nothing about quality, reliability, security, or really anything much at all. What matters is accountability.

If you give your stuff away and third parties hack, abuse, crapify and sell on your stuff with a name associated with you on it, that’s a problem.

It is more open, but it’s more open to abuse much as to anything else.

What makes you think that the 'open' camp has missed the current big thing - privacy and security? It can only be that you drank the Kool Aid Apple provided. Security-wise the 'open' camp - which includes things like Linux, *BSD and AOSP (which can be called 'Android' as long as you keep in mind not to include the Google-proprietary bits) has a better track record than Apple, privacy-wise there is no comparison. I put way more trust in those than I do in Apple as that is, after all, a commercial enterprise with a single goal.

The cognitive dissonance in this post is giving me a headache.

You don’t get to be the gatekeeper of what constitutes an open AOSP phone or anything else. If you say AOSP has a better track record than Apple in terms of privacy and security, on what basis do you get to say “except all the AOSP phones with Google services and misc crapware and insecure hacks slapped on by their no name Chinese OEMs?” Those are open too. How does that exception serve the hundreds of millions of people walking around with old unpatched ‘open’ phones full of insecure junk-ware and manufacturer hacks?

The 'open camp' has a better track record than Apple, not 'AOSP'. No cognitive dissonance here, just facts.

By the way, if you really want to experience cognitive dissonance contemplate the fact that those same 'Chinese OEMs' produce Apple hardware. Just look at the back of nearly anything branded with that apple, it'll say 'designed in California, made in China' or something similar. Do you still trust that iPhone in your pocket knowing that it was made on the other side of the Great Firewall?

Wow. I rest my case.

What they can do is simply buy up companies that have already built leading positions in emerging tech markets. When you have such fat stacks of cash sitting around, it's an easy growth strategy.

If Netflix wasn't already such a over-inflated company (P/E of 110), they would outright buy the company.

I only skimmed the article until I realized they weren't talking about Apple starting a privacy focused actual social network. That's what I thought the article would be about.

So this is off topic but what I'm imagining is letting people connect with other iCloud users (aka friends and family) to share pics, videos and comment on them. Maybe they can link iTunes/App store content (apps, music, movies, etc.) with each other and comment on them too.

This might take a huge amount of more people off Facebook and bring them into Apple eco-system of services than meet-up like events at their brick and mortar stores. There are probably millions of FB users that just use it to connect with distant close friends & family to share pics, etc.

Edit: just to build on this idea a little, pulling people's actual social network (not acquaintances or long lost people they never see) could boost sales of their content. Let people share, like and comment on their favorite music, tv shows, movies, and apps with no ads.

They've had that for years -- iMessage.

IMO Facebook is for aspirational connectivity... you stalk your high school friends from afar. iMessage is for the people whom you actually talk to, and the green vs. blue bubble is a subtle peer pressure factor to get people to flip.

As more applications expose functionality via iMessage, that will get more powerful.

Shared Albums in the Photos app lets you do just that.

Agree, alot of the pieces are there, but Apple has done a not so great job at discovery. That's slowly getting better imo.

I use my kid's school as a proxy for the average joe. About 60% of the moms have no idea that Shared Albums exist, and most of them don't really understand how they work. The UI is a little weird.

Apple has done a not so great job at discovery.

Except... maybe they shouldn't? Maybe real life can be the discovery part.

Apple tried that with music [0] - it was disastrous. I do agree it has a lot of the infrastructure and 'network' bit in place though with iCloud, it's just missing the 'social'.

(At least, so it seems from outside the walled garden looking in.)

[0]: https://en.wikipedia.org/wiki/ITunes_Ping

Ping was designed to integrate into Facebook, however Jobs pulled that integration at the last second citing "onerous terms that we could not agree to."

One would assume this came down to the two companies views on customer privacy.


In the essay, the "social network" stands for the new initiative of customer gatherings & sessions at Apple Stores. What Apple dubs "Today at Apple".

I'm having a hard time thinking of historical business examples where in-store "educational" events really moved the needle on sales.

Maybe one example is Home Depot stores with their free demonstrations of various home improvement tasks. Do they actually change store visits or total sales? Or are they a loss leader? I have no idea. (Home Depot isn't an exact comparison to Apple because it doesn't require buying HomeDepot-branded tools to benefit from the demos.)

Remember 20 years ago when some industry observers thought Amazon online bookstore couldn't compete with Barnes & Noble because the brick&mortar store had the sofas and lounge chairs to browse books, the cafe area, the children's area where people read aloud, etc. It turns out those in-store social experiences weren't as advantageous as people thought.

Yes, there are other customer gathering experiences that happen such as video game e-sports leagues (or LAN parties) or Harley Davidson motorcycle meetups. But those social events seem organically created bottom-up by the customers rather than top-down by a hardware company. E.g. As far as I know, the e-sports league membership isn't tied to a hardware manufacturer like NVIDIA or ATI. (A particular hardware vendor may provide sponsorship but that's not the same as membership which is what Apple's "Today at Apple" is doing.)

>, this explains CFO Luca Maestri reasoning on the earnings call for no longer reporting unit sales: [...] I just wish Apple would show it with its reporting.

I think it's interesting that even if Apple wants to keep industry analysts in the dark, other entities like Amazon and Facebook can estimate iPhone unit sales by proxy statistics.

E.g. Amazon can run data analytics on sales of iPhone accessories (how many the new iPhone Xs cases sold and how does it compare to previous iPhone 8 case sales at launch?)

E.g. Facebook's popular iOS apps used by billions can send telemetry data on the particular iPhone models hitting their servers. (https://stackoverflow.com/questions/26028918/how-to-determin...)

> As far as I know, the e-sports league isn't tied to a hardware manufacturer like NVIDIA or ATI.

Yes, but most of the largest ones are put on/heavily funded by the manufacturer of the game:

- CS:GO Majors

- Overwatch League is put on by Blizzard

- Riot Hiring for esports operations - https://www.riotgames.com/en/work-with-us/disciplines/esport...


Apple is moving "down market" and the biggest win for them right now is for those to understand "what apple means." I've shifted 90% of my family to mac from whatever PC they were using before because of the reality of the physical store. Go there and get help. They know more than I do, and they will be helpful. For the most part, that's true, and I no longer do tech support for my family.

Grandma wants to learn how to photo edit? Now apple gives her a class and a community of other learners. It may turn out to be a loss leader, but it's "more of the same" of what separates apple from any of the other Manufacturers. Google/Samsung/Dell can't do anything close. Microsoft _might_ be able to, but lets see.

I've been shocked that Apple hasn't stepped more in to the home automation market. Homekit is one thing, but an entire product line that is highly integrated with the Apple ecosystem and has the Apple design, feel, and ease of use seems like a smart strategic move in a market that is so highly fragmented.

This is because another company has not done it well enough yet for Apple to borrow their idea and improve upon it. That is largely how Apple works (Look at HomePod, iPhone, etc...), let someone invent an idea/process/service, then take that idea and make it better. Home automation is still trying to take root, give it a few years and Apple will have a strong product here I believe.

This strategy seems at least orthogonal, if not contradictory, to their positioning themselves as a privacy-focused company that can be trusted because their business-model is based on hard products rather than on engagement.

A real world social network preserves privacy, no?

I was more referring to the article's extrapolation from Apple's intended focus on "Services" and move away from reporting device sales.

It seems like apple can continue to grow ‘unit sales’ by introducing new products like the watch at a regular pace.

Came here to make this exact point.

Of course, the iPhone was a unique product in terms of how it changed the trajectory of Apple's fortunes, and likely can't be replicated. It's dominated 24% of the company's history. (10 years between 2007 and 2017; Apple was founded in 1976)

If iPhone sales are flat, goosing the price makes sense, but it isn't the future of the company.

To be honest, as a technologist, I'm sort of relieved. I'm interested in what's next, and now that the iPhone (and smartphones in general) is a refined product, I'm really interested in what's next in tech.

Look for the next in flat computers. Seriously. AR/VR glasses might count.

Or like the Earpods. I expect they will continue making discrete, targeted bets on wearables and other augmenters, while they keep poking at big ideas like the car.

I really don't see them going the "social" way. Cook does cloud software as well as Steve did (i.e. not very), he'd rather sell physical widgets and be a landlord on the resulting platforms.

I think this post reads too much into "Today at Apple", Apple are just reacting to Google building a similar network of physical locations for outreach and training last year, IMHO.

> Apple are just reacting to Google building a similar network of physical locations for outreach and training last year

You know Apple has been offering free classes at their retail stores for years, right?

Yeah but they’ve mostly been basic tutorials. The idea of “Today”, if i remember correctly, is to go beyond that, both in terms of volume and audience.

Are you suggesting “today” is just a coat of paint over the existing stuff?

I'm suggesting that I doubt Apple is reacting to Google.

I think so, they were definitely doing this first before anything Google did. Seems like they're just expanding it further logically.

One way Apple could continue to grow their revenue would be iPhone as a Services, or basically the Apple upgrade programme but available world wide. For a basic monthly price, you get iPhone, AppleCare+ Theft, Your iPhone Storage Size iCloud Backup. You can choose whether you want to spread this as 24 months or 36 months, interest free. This makes good uses of Apple's constant overflowing of cash, and no other players on the market could easily copy such programme because of their cash flow and cost of money. Apple are also earning extra on iCloud and AppleCare+ which is also high margin services.

Apple could then offer options on top of the basic services, AirPod, Apple Music, Apple TV Subscription, and may be even your monthly iTunes Store Credit ( Apple save more on less per-transition cost ), all in one monthly bill.

This way Apple could transition into a Services company, and services tends to be very sticky and can be valued as such, while the current Apple Stock, despite all the brand loyalty it is still valued as a hardware company based on unit sales. Apple would have been 2T company if it were valued anything like Microsoft , Google, or Amazon.

I also believe iPad Pro being able to have an external monitor, and hopefully someday keyboard and mouse will take over the current PC market with little to no competition right now. That is assuming Apple wants the iPad to do that, a replacement as Desktop. iPad Pro, being portable for field sales and mobile, iOS security and double as Desktop could be the perfect fit for All businesses. The TCO in managing these must be dramatically lower than Laptop or PCs.

As far as Apple’s ‘real world social network’, any time I hang out in upscale or hip coffee shops or bars, the laptops are >80% Macs. Observed this in RiNo in Denver the past few days, for instance, after buying a Chromebook (actually so far it’s 100% Macs) Apple’s conspicuous branding definitely serves a socioeconomic signal, like driving a luxury car. It’s as if everyone has a BMW, though and other luxury cars don’t exist.

Next, “Apple’s culture and approach to products is antithetical to the culture and approach necessary to create and grow a traditional social network. Apple wants total control and to release as perfect a product it can; a social network requires an iterative approach that is designed to deal with constant variability and edge cases.”

I disagree with the last sentence. Does the author believe that simply because that’s how Facebook chooses to operate - eternal bleeding edge? Constant mission shift, like Instagram?

Twitter seems fairly stable to me. I also recall when we used software like VBulletin for years without updates for very successful social networking. I don’t see why this software has a special need to cope with variability and edge cases, just to share photos and messages with people.

> Apple said it would stop providing unit sales for iPhones, iPads, and Macs in fiscal 2019, a step toward becoming more of a services business. While some pundits praised the move as a way to highlight a potent new business model, many analysts complained it was an attempt to hide the pain of a stagnant smartphone market.

Can companies just pull this sort of "yeah those numbers look bad, so we're not publishing them anymore" moves with impunity? I'd have thought this was something the SEC could step in to stop.

Is the only tool shareholders have to oppose this to vote in an entirely new board? Which of course won't happen for such a "minor" issue?

Providing both unit sales figures and revenue always made Apple something of an outlier.

Microsoft has never provided unit sales or revenue figures for the Surface line.

>Microsoft just closed the books on its 2018 fiscal year. As usual, it didn't break out unit sales or revenue for the Surface division


Google has never provided unit sales or revenue for their Pixel line.

>unlike most hardware manufacturers, Google refuses to share official sales numbers for their phone. Instead, during earning reports they simply bundle the product under Alphabet's "Other Revenues", leaving us in the dark about how successful the product is.


what regulation forces a company to report how much it sells of X? Most regulation requires reporting around revenue, not units.

As the article notes, Apple was unique in reporting unit sales at all.

> what regulation forces a company to report how much it sells of X?

That's not what was asked. What was asked is if they can just change what they usually report because it looks bad.

Semantics, and the answer is the same. The parent was asking if the SEC could step in, and the only way they could do that is if government regulation has granted them purview and authority to. There is no such regulation.

I read it as asking whether the SEC could step in on misleading information disclosure change, not the information itself.

AFAIK, the SEC does not require publishing unit volume figures.

I was wondering the same thing. What are the reporting requirements? How much flexibility do companies have?

I am bad at the economy thing so I have a question:

Is Apple increasing the price of iPhones to keep up with revenue growth ?

Yes. Units sold is down across the market and Apple is no exception, but Apple’s revenue is at record highs.

Okay, thanks.

So in the end, when a consumer wants to replace his iphone 6s that is finally too much out of date he'll have to pay more than if everyone (him included) had bought the iphone that came after the iphone 6s, right ?

So basically selling a product that last too long is a problem for Apple (who has to report to shareholders why revenue is growing less than before) and the consumers (who pays basically more for the same since standard usage between an iphone6s and an iphone7/8 stays the same overall) ?

Apple can't take a drop in revenue growth to the benefit of consumers by selling the next crop of iphone at the same price. So they are condemned to get a more expensive (than the last one) premium iphone out or raise the prices across the line-up. And if I understand correctly they did both, correct ?

That would explain why it seems to me that apple products are getting more expensive and less of a commodity (which high volume would suggest).

The one thing I would add is that everyone on the planet has a smart phone now, more or less.

So it's very difficult for Apple to find more customers (just Android switchers, mostly), so they raise prices for their existing customers instead.

That all sounds about right.

The day Apple begins serious flirtation with ad revenue is the day I bail on them.

> Apple Inc. shares had their worst day since 2014 amid concerns that growth in its powerhouse product, the iPhone, is slowing. In the fiscal fourth quarter, Apple said iPhone unit sales barely grew from a year earlier

Why do sales always need to grow, why sustaining is not enough?

Also wouldn't it be a good idea to change the focus product periodically? I.e. we've sold so much iPhones that everybody who ever wanted one has one already, let's focus on making MacBooks great again so more people would consider getting one or upgrading their old one, then once some time has passed and everybody has a new Mac let's start selling new iPhones we were developing during this time that is so much better thst everybody is willing to upgrade again... IMHO inflating sales growth by releasing a new not-much-better model of the same product every year or two is hardly a healthy sustainable practice.

Our financial system is entirely predicated on the assumption of perpetual growth. It’s likely to bite us in the end if we can’t get ahold of the externalities and find a way to build sustainable systems, but unfortunately we don’t have the scaffolding in place for that and Apple is just another cog in the existing system.

If you're an investor, or an employee who's compensation is largely allocated to stock shares, then you depend on perpetual share price appreciation, either through sales growth or other means.

I agree that growth is often overemphasized.

But one point to consider is the population expands by approximately 2% per year. (Highly variable depending on region, of course.)

If growth in sales isn’t at least 2% per year, that implies a smaller percentage of the population is buying their products than have previously.

In other words, sales remaining flat can be interpreted as a relative decrease in sales.

> Why do sales always need to grow, why sustaining is not enough?

I wonder this often myself too. It's unorthodox, but I wish more companies focused on staying sustainable rather than trying to grow continuously (or making growth the only goal of the company). A good book on the topic: https://www.amazon.com/Small-Giants-Companies-Instead-10th-A...

People hold stock because they think it will be worth more in the future. Sustaining would be enough if everyone else is shrinking, but not if there is anywhere else that is growing.

They don't "have to" always grow, but stock prices are effectively predictions on future growth. When the prediction changes you see that reflected immediately in the stock price. Of course predictions change all the time and so do stock prices. If your prediction turns out to be more accurate than other predictions you win (assuming you invested some money based on your prediction).

"Why do sales always need to grow, why sustaining is not enough?"

They don't, but then the stock price goes down.

I always enjoy Ben Thompson's insights, and I think he may have something here. But does anyone really feel comfortable that this strategy is going to keep them at the top?

Isn’t it the only strategy to keep them at the top? Unit sales in the smartphone market have clearly plateaued for everyone, not just Apple. Future revenue growth is going to depend either on winning over somebody else’s customers or deepening your engagement with your own so they’ll find more reasons to spend more money on your products.

It isn’t really in Apple’s DNA to try to win over the low end of the market, so there’s limits to how far they could take the first strategy. The second is effectively limitless: Does anyone think personal devices can’t keep getting better / more useful / more desirable?

I don't think it will keep them at the top, but I think they're exploring different avenues to diversify their revenue. They're nowhere near it, but they also don't want to get anywhere close to Alphabets' revenue distribution.

They are not on top in phones or computers. Android devices outsell iPhones by a significant margin and for computers, apple basically owns an insignificant portion of the market.

You're being downvoted because you're not quite right. When we talk about the android ecosystem for application developers, it's right to talk about total activated units.

When you talk about "sales" you can only compare handset manufacturers because total sales going to one _android_ manufacturer isn't happening, therefore it becomes apples (heh) to oranges.

Apple has only recently been overtaken in handset production (not sales) https://www.theguardian.com/technology/2018/aug/01/huawei-be...

Apple's sales are slowing down faster than others. Speaking only for myself the "bravery" in removing the headphone jack (which everyone seems to have copied) and lack of a small option are what prevents me upgrading. I imagine others have similar qualms and it's really not worth upgrading for many.

So insignificant that it's one of the most valuable companies in the world on the back of those two product categories. By the way they are on top where it matters – profit and customer satisfaction.

I am not exactly sure what the market share is for iPhones, but Android is much larger. For computers, they are a tiny portion. If they cracked 10 percent I would be shocked. That is awesome they are profitable. But yes they do have an insignificant user base for computers. A reasonable but nowhere near dominating position for phones. Apple is always going to be a relatively small player regardless of market cap in the tech world. The last couple decades have proven that

Apple’s genius is focusing on profit share over market share. They make a minority of phones but capture the majority of the industry’s profits. That lets them expend more in R&D, more on top people, et cetera.

Apple is absolutely dominating phones. When the competition is copying your design choices unnecessarily, you are essentially dominating the market.

That Android has dominated the $50-150 smartphone market is pretty meaningless. Those customers don't have much business value.

Having 19 percent of the smartphone market isn't dominating. The Samsung s8 and pixel 2 xl pretty much beat the iPhone x on most features at a lower price point. Higher ppi, battery size. And I think it doesn't even have USB c.

It doesn't matter what the market share is. As long as their margins are hefty and iOS remains the OS where consumers are willing to pay for apps etc. You don't need market share, if your margins are sky high.

They do need a significant market share (which they clearly have at >1 billion active devices) to make it worthwhile for content creators to target their platforms and users.

True but they don't have to be the majority as the op suggested.

one of the few companies who consistently keeps bumming it's users with higher prices for the same shit and no one is complaining :')... look at most tech giants out there, and you will see only Apple and Nvidia keep cranking up prices for same product range. only companies where you need to pay MORE to get the same tomorrow. buying a relationship with apple? first treat your users like they have value, thank you.! no one wants to be in a toxic abusive relationship!

Google Pixel 2: $649 Google Pixel 3: $799

hmmm ;)

When you can buy Chinese phones like Oneplus 6 that are just as good as the XS but half the price, the writing is on the wall. Jack up prices, exploit naive customers, and max out those stock options while you still can. Then let the company die by mediocrity again, no Jobs to save you this time.

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