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Apple's Long Awaited Cloud Services and What They Mean In It's Battle With Google's Android
I have told subscribers that I would have to revisit the Apple valuation numbers after finding out more about their cloud services offerings. After all, embracing the cloud could potentially enable Apple to win the Mobile Computing Wars. As I have stated in my many rants regarding the Mobile Computing Wars, Apple is (strategically) placed behind Google. Apple's phenomenal growth appears to be blinding those with tree bark, disabling their ability to see forests. Google is a pure play internet company - plain and simple. Apple is a lifestyle computing. It's basically as simple as that breakdown. If the mobile computing wars ends up in the cloud, Google will probably dominate. If it ends up as a lifestyle phenomena dominated by brand and marketing, Apple has the edge. Apple is playing catch-up in cloud services and iOS 5 (just announced today, to launch in the fall) is its latest salvo. Here's out take:
On Apple's unveiling of iOS5, Bloomberg gets it: Apple’s Jobs Set to Unveil ICloud to Deflect Google Android
Apple is using iCloud to retain its dominance in the smartphone and tablet markets amid fresh competition from devices powered by Google Inc. (GOOG)’s Android software.
Apple's dominance is in the tablet arena. It is not dominant in the smartphone arena, although it is a leading contender and the most profitable hardware vendor.
The new service may improve how users can access content across different Apple devices, keeping customers from defecting to rivals, said Frank Gillett, with Forrester Research Inc.
“The world we’re headed to is where you don’t have to think about which gadget has your stuff,” Gillett said. “As people get their content organized around one of these personal ecosystems, then it will be incredibly sticky because migrating won’t be convenient.”
If one were to cut through all of the marketing hoopla, and PR, one would discover that this is basically Apple's attempt to bring iOS on par with Google's ridiculously rapidly developing Android platform. This is a very difficult task for Android is growing AND EVOLVING at a truly unprecedented rate. I have anticipated most of these moves last year, as illustrated by the Mobile War posts of June and July, 2010, which have proven be quite prescient:
Android Now Outselling iOS? Explaining the Game of Chess That Google Plays in the Smart Phone Space
You will probably see Nokia adopt Android or Windows Mobile on some of its devices, or you will see continued market share decline. Nokia makes some kick-ass hardware, and will challenge HTC if they had the OS to go along with it.
Almost a year later, guess what happened to Nokia...
You can bet your left ass cheek that the iPhone 5 will have an Evo-sized screen with resolution to match today’s LCD flat screens, accompanied by the opening up of the iPhone to standards-based peripherals, ex. HDMI plugs and USB. The screen size increase is a definite, but peripherals is a maybe. Die hard Apple fans won’t mind that they have to jump through hoops to connect their device, but the rest of the world will lean towards an Android device if they can’t easily use their phone/tablet with existing hardware. Apple sees this as well as I do. I’m sure they’ll find a way to gimp the standard somewhat, but more open is better than less open.
And now we have Apple moving to the cloud to counter Google's Android's innate ability to move content and data between devices wirelessly.
- Microsoft is guaranteed to extend their hegemony on the desktop and enterprise server space to the handset, as well as their reach into the consumer living room via the Xbox. The result? More functionality, more usability, and better overall products.
And almost as if on cue, the move of the entire Windows platform to the ultra mobile device in the form of Windows 8 has begun.
- The Android clan (which is nearly everybody who is not RIM, Apple and MSFT, and maybe Nokia) will try their best to pump their R&D departments to their limits, and you will be getting bleeding edge products pushed to your door step on a quarterly basis until a clear winner is selected – which will probably be sometime from now.
Was this statement accurate? Do you want to see innovation? Well, Android vendors have imbibed the innovation elixir with R&D departments cranking full tilt: Google’s Excellent Execution On The Android Platform Goads S.E. Asian Manufacturers Into Low Margin Innovation War!
Thus far, I have been nearly 100% accurate in my prognostications, and the latest iOS5 announcements have solidified them even more. Here are some key takeaways...
Android seems to appeal most to three types of consumers:
- Vendors and retailers who are able to get a slice of the revenue pie without putting much into OS R&D
- Low end consumers who simply want a smart phone
- Very high end consumers are very technologically inclined and thus are more adroit at discerning the tech value proposition and identifying the marginal utility vs profit margin tradeoff. These are the consumers who are less susceptible to corporate marketing and often the one's who lead the technological trends, even when they aren't aware of it. The caveat is that they are the minority (headcount-wise) of consumers.
Apple's iOS products appeal primarily to:
- The lower end consumer who values ease of use over capability
- The lifestyle consumer who also tends to be the trend seeker and is quite status conscious. This consumer is much more susceptible to marketing than bullet number 3 above.
- Those who are generally more influenced by marketing.
With these platform buyer characteristics in mind, let's review the new Apple tech annonucement.
The most significant aspect of the iOS5 and desktop OS announcement was the purported arrival if iCloud, the Apple server farm service. This is a very expensive undertaking, yet a very necessary one for Apple needs to move iOS from its dated roots as a desktop tethered OS to a truly mobile OS - something that Android was designed to do from the start. This was/is not an inexpensive endeavor. From hardware, to systems design, to redundancy and network implementation, to software development and ongoing administration and maintenance... This ain't going to be cheap! As I have been warning, this will cut into Apple's margins, for while these offerings broaden the scope of services Apple can offer, Google has set the price/value bar so high that Apple could not possibly get away with the premium pricing that its shareholders have grown use to. What does this mean? Margin compression! I said it once (actually, twice, thrice and a multitude of times), and I'll say it again:
- Look & Listen Closely As The Solitary Margin Compression Theory Slowly Bears Fruit: Apple to Drop Flagship iPad Prices?
- How Google is Looking to Cut Apple’s Margin and How the Sell Side of Wall Street Will Enable This Without Sheeple Investor’s Having a Clue.
- Steve Jobs Calls End Of the PC, We Call The End Of The Fat Margin Tablet – Including The Pretty iPad, With Proof!
- Is The Evidence For An Apple Margin Collapse Now Incontrovertible?
- I Absolutely Dare Anyone To Read This And Still Not Consider The Probability (Not Possibility) Of Apple Suffering From Margin Compression
Apple doesn't just spend its money on hardware. Endgadget editorial puts it plainly:
Today, Steve Jobs revealed a great many things, but the biggest bombshell was this -- Apple's iCloud, which promises to sync all your content, automatically, even wirelessly, to Apple's new server farms... for free. All that processing power in the picture above can't have been cheap, and multiplied by the entirety of those data centers... well, let's just say it's a heck of a promise and we've got somewhat mixed feelings about how it'll play out. Hit the break to see what we thought of Apple's play for cloud storage.
...
... So much of the service is functionality already available on other platforms, particularly on Android -- if you consider Google Docs and Picasa a part of Android, at least.
Exactly! Apple is playing catch up here, and it is game that they are probably slated to lose due to a lack of resources in comparison to Google's 10,000 some programmers on staff, 500,000 open source programmers and testers (think XDA developers) and the R&D departments of Googles 1,000 some odd hardware and service vendors (PC vendors, smartphone vendors, carriers, 3rd party services and peripheral suppliers, etc.- all of whom are throwing back into the Android pool of intellectual property and and capabilities). Where we have Apple now is the taking of mostly all the new features of other OSs and making it seem like it is something new. This is far and wide an unmatched strength in Apple's management and implementation. Often, they consumerize the product which aids in consumer adoption, ex.:
- iPod and iPod touch vs. Sony Walkman
- iPhone vs the smartphones pre-2008
- the iPad vs various Windows tablets
This has worked strongly in the favor of Apple for the last decade, but never (in that same ten year period, at least) have they been outclassed to the point where the competition has brought consumerization to the market first and Apple has had to play catch up. Android has done this and has done this in a very big way. Examples?
The notification bar system has been in use in Android since the original (Droid) circa 2009. It is one of the reasons Android became so popular (Android is now the number one OS in terms of growth and users both stateside and world wide). Apple's implementation looks to be almost a direct replica several years later.
| Apple's iOS 5 Pull Down Notifications | look to be a direct copy from Android, even down to the Weather widget |
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| Android is leading the curve with mobile OS design | spurring Apple to play catch up. |
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There's also active functionality from the lock screen, ex taking a picture without unlocking the phone (currently in Windows Phone 7 and Android Sense 3.0), integrated ebooks (Google "Galaxy S2", Honeycomb & Windows Phone 7), iMessenger (Blackberry Messenger and a superior implementation that integrates real time video conference in Google Talk, Android Gingerbread 2.3.4 and Honeycomb), Twitter Integration very similar to Facebook integration in WP7. It should be noted that the primary argument for justifying Apple's valuation is that they will be constantly innovating and coming up with new ideas that the competition will be playing catch up on. It truly appears that the reality of the situation is that Apple is the one playing catch up, and it is not running fast enough. Google just released two minor but very significant upgrades last quarter Gingerbread 2.3.4 and Honeycomb 3.1 (with no compromise playing of streaming Flash content in 720p) and is slated to release a major update in September with Ice Cream Sandwich which will meld phone and tablet OS into a unified, dynamic interface. Again, leapfrogging Apple's iOS which is just reaching parity with last years rendition of Android. Again, the resources that Android brings to bear with its highly unique, innovative and destructively disruptive business model will be literally impossible for Applet to compete with using a closed system and a fleet employees as programmers, engineers and designers. This will become more and more apparent to the masses as time goes on, at which point Apple will have to rely much more heavily on lifestyle marketing and much less on ecosystem and platform advantage.
Even the 200 new features touted in the iOS updated appear to be inspired by the 500 new features that is coming in the Windows Phone Mango update. The competition is truly fierce.
What iOS 5 does have going for it is its music in the cloud implementation - more Endgadget editorial:
Sean Hollister:...And then there's iTunes in the Cloud, $25 annually and basically a free ticket to turn all your ripped music into legit iTunes files in high-quality and with no DRM. In other words: iCloud as a whole may not make too may Android users jealous, but Google Music is already looking a bit dated, and it's not even out of beta yet.
I agree with this statement. It will be very difficult to compete with the Apple setup, but then again, this didn't come cheap. Amazon and Google apparently had the tech set up first, but both washed out of negotiations with the record labels. Now we know why. Apple had to pay up to $250 million up front plus accept the minority of the revenue split while managing the enormous data center operations - all while competing with the streaming services and MSFTs Zune service in pricing. What was that term again? Oh yeah, Margin Compression!
Sean Hollister: All told, today's announcements weren't so much eye-popping as they were expected, but as with the introduction of copy-and-paste into the iOS universe, these "expected" additions bring iOS up to par with Android in terms of notifications, contacts, etc.
Zachary Lutz:... Ultimately, users will demand their content being effortlessly accessible, and I expect massive local storage to become an arcane concept (that only serves to inflate handset prices). Apple is known for changing paradigms and driving industries forward, but I fear it's got some catching up to do in the cloud. Nonetheless, today was quite a leap.
Dana Wollman:... For me, the biggest news here boils down to one word: "free."
As Apple Does Free, Expect Margins to Compress. Google Does Free Through the Largest Ad Subsidation Network In The World. Apple Will Have To Pull From Device/App Store/iTunes Revenue.
This is a very important concept. Google has offered practically all of these services for free for some time. People have gotten used to having a very high level of functionality for free, or at least for no out of pocket expense. Google's business model of search and advertising lends itself to the freemium model, and Android's open source, less than free business model even more so. Apple's fat margined closed ecosystem certainly does not. This is a true expense for Apple, one that will only grow with time. Outside of regular adminstration, storage, maintenance, redundancy, uptime and bandwidth issues, Apple will have to deal with its new found reality of hackers, malware, viruses and security - issues that are amplified and multiplied in the cloud. Higher expenses mixed with lower prices on the anticipation of higher volume means??? Let's here it again. Oh yeah, Margin Compression! Make no mistake about it, Apple will have to offer all of this dirt cheap to free to even think about slowing the Android slide.
And remember, this stuff hasn't launched yet. It will be launching somewhere around the launch of the iPhone 4 refresh, and the most major Android update in over a year - Ice Cream Sandwich. As Apple catches up to Android in September, expect Android to once again lap Apple's iOS upon launch!
With almost no exceptions, I'm not surprised to learn what iCloud actually does. And why be shocked? Certain features, such as email and calendar, have their roots in MobileMe, while a series of leaks and rumors primed us for the fact that syncing among devices was on the way. So it's not the functionality that impresses me so much as the fact that it won't cost anything. That, and the level of integration. I'm a long-time Android user, and I'll be the first to admit that many of the updates today borrow liberally from other platforms (hello, drop-down notifications!). But you know what? As an Android user I wish I could have more native integration between my handset and, say, my Google Docs. And I'd love to download the same things without having to pay all over again.
Apple doesn't get a whole lot of points for originality, but it deserves credit for making its service free, accessible, and tightly integrated. And if all of this rolls out smoothly, it would tell us that Apple's learned a whole lot about cloud services since its bungled MobileMe launch. Yes, you can say Apple is trying to out-Google Google at its own game (to quote our friend Sean Hollister), but if the result is a seamless service that offers functionality you're not used to getting for free, and puts pressure on its competitors to step it up, then it's we, the consumers, who ultimately win.
Sharif Sakr: ... All my work and productivity is already in the cloud thanks to Google Docs, Dropbox and Windows Live Mesh (which has rescued me more times than I care to remember). My contacts and calendars already sync automatically from my iPhone to my Gmail account, and I even occasionally use the cloud photo storage function in Picasa. Like iCloud, they're all free. I don't see myself leaving any of these platforms to shift to Apple's all-in-one service because I'm still cross-platform and I do maybe 60% of my work on a PC.
Commenters: As an outsider of the Appleverse there was nothing here to make me want to join. Seemed more like a patchwork update to cover some of the features available on other platforms and of course to make sure that it's completely locked in to the Appleverse.
I agree here as well. The Apple offering isn't compelling enough to bring in new users en masse. It seems aimed more at preventing defection.
More Signs of Margin Compession
Well, you know I feel the competition in tablets have already caused falling margins across the board:
- Look & Listen Closely As The Solitary Margin Compression Theory Slowly Bears Fruit: Apple to Drop Flagship iPad Prices?
- Steve Jobs Calls End Of the PC, We Call The End Of The Fat Margin Tablet – Including The Pretty iPad, With Proof!
The iPad is very important to Apple for it is its 2nd most valuable niche and helps diversify away the profit concentrations in the iPhone, which is responsible for over 70% of Apple's profit. This is dangerous, particularly considering the two of the very few eligible suppliers and Apple's main suppliers of the most strategic parts of both these devices also happen to be Apples first and second largest competitors in the phone and tablet space - both pushing Android. The margins on this product that pushes 70+% of Apples profit are high, 62% high, but that is coming to an end as well due to competitive forces wielded by Android.
Walmart cuts iPhone 4 price to $147
... In this case, Walmart has slashed the price of the 16GB iPhone 4 to $147—down from its regular $199 price tag—from now through June 30. Both the AT&T and Verizon editions of the phone are on sale.
But what does it mean? Apple has hinted that Monday’s WWDC keynote will not include major new hardware announcements, meaning Walmart likely isn’t making the price cut in advance of a brand new iPhone. (Or at least not one that’s expected to be announced this week.) A little more than a year ago, Walmart dropped the price of the 16GB iPhone 3GS from $197 to $97. That price cut occurred a couple weeks before WWDC 2010; Monday’s price cut was announced only a few hours before the event. Of course, the 3GS price cut last year was followed by Apple unveiling the iPhone 4. Walmart began selling the iPhone 4 in June 2010.
Walmart’s current iPhone 4 promotion includes both the black and white versions of the phone, and the discounted price is available through June 30.
What does this mean? Well, outside of being wonderful for consumers (as I anticipated last year), Apple's most profitable franchise will have to drop margins to maintain growth. As it is, market share growth has stagnated to a near stand still, assisted by share losses in RIM, which is basically dead in the water - exactly as I warned subscribers last year.
- Many More Black Eyes for the Blackberry? A Complete Forensic Analysis of Research in Motion
- The BoomBustBlog Multivariate Research in Motion Valuation Model: Ready for Download
As a matter of fact, we may update the RIM report, for the short may still have a ways to go. As for Apple, subscribers should reference 
Apple - Competition, Forensic Valuation and Cost Structure, page 4 to see our optimistic trends for iPhone margin compression.
- advertisements -
"Apple's iOS products appeal primarily to:
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2. The lifestyle consumer who also tends to be the trend seeker and is quite status conscious. This consumer is much more susceptible to marketing than bullet number 3 above"
Reggie!! So cruel and so spot on!! The Apple fan club unmasked for all to see!!
Sadly for the fanboys, the chart is the ultimate arbiter and it has been getting ugly since Feb. 17
just a small point, that Reggie makes himself without realising he's shot himself in the foot: Apple software works... smoothly, reliably, bug free and is cutting edge
..everyone else (also-rans Microshite and Google) have been copyig them religously and badly for years with their cheap crappy buggy versions of Apple (see Reggies very own hilarious Samsung Galaxy vid in his previous post, a 'show-off' presentation that went as about smoothly as a Goon Show)
Apple 'haters' just don't 'get it' ..they're riding a wheezing old nag carping about a thoroughbred.. you lot of Ronald McDonalds are just sooooo funny :)))
"Apple is (strategically) placed behind Google"
On search yes, on every other issue you're sooooo dreaming Reggie ...their Droid-Pad is absolute crappy pants compared to the silky smooth iPad (Goo copied) and other Apple OS ...Apple is designing the space Google is copy-cating and (as Micorshite before it) is a breathless cheap also-ran version
If you like cheap ragged copies Reggie, throw your weight behind Goo (oh, you have already!)
"Apple's phenomenal growth appears to be blinding those with tree bark, disabling their ability to see forests.."
You mean phenomenal growth full stop. Period.
Isn't that enough for you Reggie? ...it really is for most
It's Google that's pissing its pants having maxed out in (stagnant) search. Like the ever more desperate Microshite it's having to buy its future and buy its growth. Apple just redefines the iSpace, Google can only Buy-&-Flog-Cheap Droid-It's-Future
You've jumped on the also-ran Reggie, keep flogging your cheap old nag for all it's worth (which ain't much!)
As great as it sounds, I have no interest in Apple (or any entity) having a complete listing of my media. How can I turn it off?
Hey Reggie,
Please address your take on business and personal data security in cloud computing.
Mark my words as of today... "The Cloud will disappoint multitudes of users that falsely believe their data is secure and viewed only by them."
I am not saying users won't gravitate in droves to dance in the clouds but TPTB have setup the data mining Fusion Centers to know what you do perhaps before you do.
The Cloud data capture and misuse will be a sad situation to watch.
Y-Y
Not a gadget clown, but I went with a droid.
Great post and comments, but do the stock prices these days have anything to do with earnings and value? Haven't they all been assimilated into the POMO/HFT Borg collective?
Yes, but APPL certainly does not behave like a company that dances to Wall Streets bull shit tune.
They are a well run business, something most bankers don't give a shit about unless it involves fee churn of one kind or another.
precisely Banzai ....Apple are one of the few US companies that provide 'Wow' smoothly, reliably and consistently... most of the rest are monopolists, junk and frauds with heavy PR campaigns to sugar coat over their turds
the best PR is a happy consumer made of a satisfying product... Microshite, Google and Reggie just don't understand that
i used to be the only one on zh defending apple and saying reggie was off base and his iphone forecast was way off, and it was a while back anyway, good to see some people here aren't all doom and gloom debbie downers when it comes to great companies
Reggie has joined the army of paid Goo droids (crones) by the looks of it ...no wonder he's getting invites to CNBC who are also currently running an all out recruitment campaign 24/7 for Goo as none of the top talent wants to work for them
Well we just went head to head with an Android team to deliver a nice app. Well we have beat them by three weeks already, helped improve the server apis, and put a great app out there.
The Android team is still working on things.
I love writing iOS apps!
Hey what happens if iOS comes to Windows?????
Who gives a shit?!!
...Windows is toast ...even a CNBC contributor (usually years behind) called Microshite a "toxic brand" after years (nae decades) of delivering nothing but absolute shite (tut, that's monopolies for ya)
Reggie...
When are you going to address the concept of integrated services?
Both Goog and APL are big hitters in this segment, and although phones and pretty devices are fun to quantify, it's old news. One could argue cloud service models going forward are device agnostic, but we know that isn't how apple rolls.
The world is consolidating, and Apple (and icloud) are better positioned than Goog and all the moving pieces to contend with, but for different reasons. Goog has a strong business presence with Goog apps, whereas APL has media. Fun to watch, and best for consumers.
You also touch on something very important. Ads are a terrible way to subsidize service. Look at NFLX obliterating every cable market in the US -- and NO ADS! Advertising has killed a fair share of golden geese, particularly as it's milked over the long run... Think has-been search providers, etc.
Reggie,
Your analysis is stuck on just comparing tick boxes on a checklist. The reason apple is winning is not because they have a longer list, but because the features on the list actually work well together in an intuitive manner.
As you say, the iCloud features are nothing particularly new, but the difference is the API level suppport and integration between the OS and apps on mobile AND the desktop.
Google and its android partners are so out of touch, Verizon recently advertised, "Your wife will love the Tegra 2 chipset". Are you kidding me!?!
Yeah, but Apple is losing the market share battle, not winning. You guys are failing to look at what drove Apple into the ground during the last major paradigm shift. In addition, look at the comments to this article. Not one balanced comment that looks at the weaknesses and strenghts of both companies, just Apple cheerleading - incessant cheerleading at that. We really don't know what the level of integration will be in practice because the product has not been launched to the masses yet. Despite this, commenters and pop media are already doing victory laps, despite the fact that this just puts Apple on par with WP7 and Android. WP7 is a strong platform with lots of promise, but there is reason to doubt it becaue of failed managment. Android on the other hand has been outrunning iOS by a long shot, both in technical innovation, usablity (yes, usability - remember the things we're discussing now you couldn't even do yesterday, thus you couldn't use it) and in the number of actual users and market share. Android is also extending that lead by an ever widening margin.
This "intuitive manner" mantra is straight out of the Apple marketing department. How intuitve was it to upgrade iOS? Find a computer, Plug in, look for update, download for an hour, wait nearly another half hour, and see if it worked. Don't forget the extra 30 minutes each way to back up and restore apps and data.
Truly intuitive is what Apple is just announcing today yet has yet to launch, but Android and WP7 offer from the get go. To update my Android Tablets and hones, I get a notifaction, I click ok and everything happens autoatically in about 3 to 5 minutes after that. That's intuitive my friend, and that's what Apple is trying to launch in a few weeks.
If I lose or damage my tablet or phone, I simply by a new one and while walking down the street enter my gmail address and password, and ALL apps, data and settings pop right back up on my device. no tethering, no nonsense. I can go on using truly intuitive and convienient apps such a Google Voice, Google docs, maps, earth, etc. but you either get it or you don't.
Apple is struggling very hard to play catch up with a product that is not even in use yet, and it has convinced its followers that it is somehow taken pole position. The reality is Google is already there, as well as MSFT, but Google also has more users and is growing faster. The part that should really scare those who need for Apple to pull this off is that by the time Apple launches this, Google would have launched or about to launch there next major iteration which will nearly guaranteedly push Apple's iOS back into the "need to catch up again" role, and do so directly after a fresh and major platform upgrade. The Google iteration promises to meld all interfaces and bring integration with all major devices and appliances through direct interfaces with the OS: cars, home automation, medical equipment, POS retail, etc.
Google has already launched Google Wallet, the first POS NFC systemt that allows your smart phone to take the place of you debit and credit cards for swiping at the POS terminial and cash register. This is much bigger than music. Like comparing JP Morgan to a record label.
Apple is already playing catch up in this arena, and iOS has no financial NFC components that I'm aware of. 1st mover advantage in this field going to the market share leader is very dangerous.
Chromebooks are poised to truly disrupt the enterprise by significantly dropping TCO across the board. Apple has not answer to this (iPads don't cut it with adroit CTOs, at least IMHO), and again are placed in a position of playing catch up with a freshly announced but not launched OS refresh. Remember, we haven't even broached the actual Android refresh coming up - Ice Cream Sandwich:
Android 4.0 Ice Cream Sandwich featuresMore catch up. Apple's business and development model is not geared up to successfully compete against the rate of development in Android. Lifestyle marketing and vendor lock-in is the strateg of choice for Apple now.
Reggie,
Thanks for the thoughtful response. Your work is clearly comprehensive and in respect of your overarching argument I will not engage in a tit-for-tat response of each point you raise.
I would argue that we do know the level of integration as it has been announced that the iCloud services will be provided at the API level to developers. Similar to how all applications on the desktop share the same open/save dialog boxes (provided by OS API), "document" services will be provided by iCloud. For any application developer who is developing an app for which saving documents is a feature, integrating into iCloud will be as simple as doing it any other way. The key takeaway here is that unlike current solutions on iOS AND Android rely on a 3rd party application such as drop box to provide document centralisation and synchronisation. The current solution is inelegant as it is not guaranteed that each application developer will have thought to code appropriately useful support for drop box.
Additionally, on both iOS and Android you can already see how this will work by using apps that hook into dropbox/facebook/twitter/etc.
Obviously it is possible to make it happen using combinations of various tools on android but my point about integration is that most users will immediately understand and be able to take advantage of editing a document on the ipad and just seeing the most current version when they sit down and launch Pages versus an android solution where dropbox must be set up on both the mobile device and desktop, and the user must know to save the document in a certain place on the mobile device and then they must open it from a certain place on their desktop, it's just too much for the mass market to take in and take advantage of.
The innovation of integration is bringing this functionality to the mass market in a way that my wife will actually understand the features available AND USE THEM.
An additional key point here is that the integration extends beyond mobile devices and into the desktop in a way which Google cannot answer the experience to be offered by OSX Lion and Windows 8. It remains to be seen how impactful this linkage is, but it's certainly a negative for the GOOG userbase.
You raise an interesting point regarding NFC and google wallet, perhaps it is a competitive advantage that will result in everyone shredding their credit cards in lieu of phone payment. I question this prediction on the basis of historical precedent in that Paypal failed to dominate internet transactions and Mastercard "paypass" tap to pay is stillborn. If and when NFC takes off the banks and transaction processors will almost certainly ensure that they are not cut out of the market by google.
Lastly, regarding facial tracking (VERY COOL STUFF): http://itunes.apple.com/us/app/i3d/id434844658?mt=8
Reggie, "Android ...has been outrunning iOS by... usablity (yes, usability.."
You never responded to my request to check the Samsung Galaxy-Droid (iPad copy-cat) video you posted ...did you check out what a clunky bag of crap it was Reg?
Reggie, "Not one balanced comment that looks at the weaknesses and strenghts of both companies, just Apple cheerleading.."
I refer you to the Samsung Galaxy-Droid and its "usability" better described as a 'clunky dump monkey also-ran' in technical parlance
They have gotten to where they have gotten because they make a superior computer. It IS that simple. And on the computing front...Windows is just not in the same league, ball park, game or galaxy. It's like comparing a Porsche to a Pinto.
I am not speaking as an investor or as a consumer of gadgets such as the i-pad or i-phone. I am speaking as a person who has used both Mac and Windows systems extensively and one is clearly and vastly superior to the other.
Most new Mac users I have encountered appear to share those sentiments and it is those sentiments that has led them (not me) to become loyal purchasers of the gadgets you are speaking of. But to me, Apple is a computer company that makes damn good machines and software. The rest of the toys they make are inconsequential to me.
Say what you will about Apple. I know many here love to hate it. That said...when you look at their market share of home computer users...their market share has only one direction to go...UP. It's really that simple.
Also, what I never see Reggie mention, and perhaps it's because it may not be a massive revenue issue (I do not know), is how Apple has virtually become the dominant computer in the film and video post production business. That much I do know having spent 20 years working in that field. I saw them go from a "cute little system" to the monster that buried Avid. And the trickle out affect from that has been that nearly 100% of all post production people I know now also have a Mac at home. Film and video production is not a small "niche" field. It's global and it ain't going away now or ever.
Now continue to pick it apart. I bought a Mac for the first time over 10 years ago...and I ain't NEVER going back to a windows system...NEVER.
And no...I do NOT own an i-phone or i-pad or an i-anything because I ain't a teenager. I'm simply talking about the computer.
By the way...as a bit of trivia. It was an Apple special FX program called "Shake" that Peter Jackson used to make the Lord of the Rings trilogy. He was one of the first to use the program. Prior to Shake, the only system capable of creating those kinds of effects was a complete system called "Inferno" which was made by Avid and sold for over $1 million. Shake cost $5000. And it's because of things like that that Apple was able to kill Avid.
Excellent comment. I have noted this dramatic transition too.
Avid deserves to rot. They are greedy as hell, and their entire reseller chain is a bunch of overcompetent ass clowns. As I recall, one even tried to price the power cord that came with the computer in an order. It was $26.
They got beat at their own game and their company has been the definition of crash and burn ever since.
Couldn't happen nicer bunch of thugs...
LOL!!!!! YES! absolutely. I feel the same and by the sound of it...you also frequently considered leaping over the desk and stabbing one of those smug pricks in the temple with a number 2 pencil as I often contemplated doing.
Not gonna lie, one of the most solid tests before becoming a [long] investor of a company is trying out the customer shoes. Avoid interest in companies that treat their customers like shit. It's kept my plate clean on numerous venture opportunities.
By no means do I have to deal with Avid frequently.. I note their demise along with other companies with the same bad-habits, like Cisco, their acquisition of Tandberg, and Reggie's favorite Microsoft off the top of my head.
My favorite line to over-competent sales quacks is right out of the fugly playbook.
"Welcome to Dumpsville - population, you."
Agreed.
I understand what Reggie is saying about margin compression, however, if Apple can increase market share of smart phone, tablet, notebook, desktop, and associated servers and software computing by 30% there won't be much compression.
"And then there's iTunes in the Cloud, $25 annually and basically a free ticket to turn all your ripped music into legit iTunes files in high-quality and with no DRM."
This is the key.
How did Apple regain it's footing and start gobbling up market share? The iPod combined with iTunes; the same way Sony grabbed market share for all sorts of consumer electronics by building brand loyalty with the Walkman.
Apple will come up with a proprietary connector to get HDMI out from all their devices, ensuring that an iPhone, iPad, iPod, or any Apple machine can stream cloud content to a 17" monitor, 65" LED Flat Screen, or a DJ's sound equipment.
The key is iTunes and the music. If Apple can use 4G in conjunction with AT&T (and now T-Mobile) they can bypass Comcast, Google, and anything else.
Channeling the user is the new Internet. The Internet may be open, but the users will be funneled, channeled, and choices made for them by the way they seek content. If Apple can get adoption of iCloud via iPods, iPhones, iPads, and iTunes by users accessing the cloud over cell phone signals they will bypass the old internet altogether.
I would not be an investor in Comcast or Cisco as the millenials are moving to the 3G-4G cell signal cloud and abandoning Wi-Fi and traditional ethernet/cable connections.
Not impressed. Music, videos...that's it?
Great I am in the cloud...but wait I have my iphone/ipad on me why do I need to be in the cloud?
For your music and videos that you will have running in the background while you check your email, work on reports and documents, check Facebook, and everything else in the cloud you don't need a big hard drive or flash drive or CD for.
I'm not advocating one way or another, just observing and postualting.
good stuff
repeat
Same old story here in a year AAPL will be trading down $5 to $425 a share and Reggie will be back with another I told you so post.
I would not be surprised to see a 2:1 split in the not too distant future.
Oddly every time Apple plays catch up and enters a new space, the lazy morons that are already there all get obliterated.
Yep. I remember when I started using Final Cut Pro, all the Avid editors were complete snobs about it and even laughed at the FCP users. Now if you can't cut on FCP...you ain't gonna get a job cutting anything but fuckin pork chops at the grocery store.
Google has been talking about the cloud how long?
What is incredible about Google is what they have not accomplished with all their cash and programmers. I started out as a booster for the company but came to realize there is more hype than there is direction.
Given my borderline paranoid proclivity for privacy, cloud computing has absolutely zero appeal to me.
I have a thumb-drive that I call Cloud. I carry it with me wherever I go. I plug it in and work in the Cloud wherever and whenever I need to. Synching my data couldn't be easier.
Bingo. For those who are not alseep, this is, and should remain, the single largest barrier to cloud computing. The average individuals sheep may buy the cloud paradigm...and this is a huge market. The majority of organizations I am dealing with (mom n' pop shops, to Fortune 500's) regard cloud privacy issues as a non-starter...for their own information. All depends on the implementation (PaaS, SaaS, IaaS).
Organizations are just beginning to recognize the value, and shortcomings (esp. in terms of security) of BYOD/Consumerized Computing and Borderless Networks. It will take time to adjust.
Scott McNealy has been evangelising the "cloud" since the mid 90s.
http://www.zdnet.co.uk/news/desktop-hardware/1996/09/20/sun-boss-preache...
Saying something and doing it are completely different things.
anyways, thanks for the update. I am an Apple fan since 1992 for the reasons that you say : lifestyle aesthetics and smooth seamless user interfaces. But with Google now there are two contenders in this global race. Very good! I hate a one horse race like MS and Windows in the 80-90s. It'll make the industry innovation curve go down faster...we win as users!
Yes as per the post above the psy-ops and big brother culture in corporatocracy USA is another big issue...one that will only be resolved when global players from other parts of the world emerge!
Google is partners with NSA and the psyops folks. Now who will win in any battle?