0:00:00Think you were on about two months ago. I don't know. I'm trying to mix it up with guests, but I really really wanted you back
0:00:05Now to talk about the watch
0:00:08Well, needless to say I have a full range of opinions about it, right
0:00:13And Renee and I last week just more or less
0:00:16Skipped it because we already filled up two hours with just the iPhone and and etc. I
0:00:22forget if I said this to Renee or if I put it in my review, but I
0:00:27really do that I understand I think I put it my review but I understand why
0:00:31Apple did it that way in terms of the event you know phone Apple pay and the
0:00:38introduction of the watch all at once but it really to me gave short what's the
0:00:44word shrift what's the word short short shrift to to the iPhone 6 to me and I
0:00:52understand why they did it but boy and as a writer someone trying to get a
0:00:56handle on all this it it was just impossible you know and you get you know
0:01:0230 minutes 40 minutes after the event to talk to Apple reps and there was just no
0:01:06way it always seems to go by fast and I always come up with questions good
0:01:11questions as soon as I'm out of you know and the event is over but this time it
0:01:16was just impossible it was like I did I really felt like there was no way to ask
0:01:20all the quick because I wanted to I wanted an hour to talk about both things
0:01:23things you know the phone and the watch
0:01:27you think look at all the kind of bad news that the phone has gotten this week
0:01:33and obviously it's an annual tradition that there's some sort of some sort of
0:01:38gate you know every year Apple spotlight had a great post on this thing that
0:01:42basically everyone comes down to people not understanding physics if you think
0:01:47about it the phone never got the positive cycle in some ways yeah because
0:01:51It was just the week where everyone's talking about the phone was drowned out by everyone talking about the watch
0:01:56And but it still got the negative cycle. I don't think it's gonna hurt
0:01:59I don't think it's gonna hurt it really but it's interesting that the whole cycle has been kind of
0:02:04Upset a little bit
0:02:06Yeah, I definitely think so and you know, it's you know, I guess we're coming up on
0:02:12Three weeks since the event. I
0:02:17Think so. Yeah, it'll be three weeks come Tuesday. So, you know, it just still feels like that iPhone
0:02:24yeah, just never got the
0:02:26the positive
0:02:28Part everybody was so, you know into the pay and the watch in the first week
0:02:33Then there were just a few days, you know that that brief period between when the review
0:02:38Embargo is over and then when they have people actually get their hands on their phones, you know Friday morning
0:02:46And then that was it you know
0:02:48Yeah, it's interesting. I mean I
0:02:51obviously
0:02:53Well, we should talk about it more the whole
0:02:55iPhone and watch being together because I thought pre event it made a lot of sense
0:03:02Because I went into the event looking for the watch to be more of a phone
0:03:07Accessory and that was some of my criticism of the event was that it the way it was presented
0:03:11It wasn't really an accessory it needed it, but it but it wasn't
0:03:15But if that's the case, then maybe they didn't need to necessarily be presented together
0:03:20so I there's that it's actually really interesting to think about the the kind of the the optics perspective of how they
0:03:29introduced both products
0:03:31They didn't need to be introduced together and part of why they didn't need to be is that the watch?
0:03:37Does work with I think all the way back to the 4s or at least to the iPhone 5 maybe it's just iPhone 5 but
0:03:44You know at least two two years of existing iPhones
0:03:48You know I think Tim Cook said there's at least a hundred million people out there that already
0:03:53Even before the iPhone 6 hit already owned an iPhone that's compatible with the watch
0:03:58So they didn't need to like I think maybe if you know
0:04:04There's a story that came out this week that from the information that you know that Apple had been hoping to actually have the watch
0:04:12on sale this year
0:04:14Rather than just announcing it and and hoping that it comes out early next year
0:04:19What they said they'd be lucky if it came out by Valentine's Day
0:04:22Which is interesting but not surprising to me
0:04:26I mean, of course, they would rather have it come out sooner rather than later, you know
0:04:30And like everything in all of us do most things end up taking longer than we had hoped
0:04:36Yeah, this is where we note that
0:04:39well we're running an hour late which which is fine because I'm a writer too
0:04:43so I can appreciate you know you just need to wrap it up but then I realized
0:04:46it's about Derek Jeter and I was much more conflicted in my in my emotions oh
0:04:52that that was the holdup waiting to start the podcast yes which is fine
0:04:57actually I appreciate Jeter and all that went down until you wrote in the article
0:05:01that uh it's been so long since the Yankees won and meanwhile I'm sitting
0:05:05here as a Milwaukee Brewers fan we've never won anything and the just silent
0:05:09silently resenting you.
0:05:10- Yeah, they really crapped out this year too.
0:05:12- Oh, it's so brutal.
0:05:14- Weren't they, they were like 20 games over 500 at one point.
0:05:17- I don't know, I don't know if it was that many,
0:05:19but they, I mean, they had like a 10 game lead
0:05:21in their division or something.
0:05:22Yeah, it's, it's, it's, it's, it's the Brewers.
0:05:26- Yeah, let's not talk about them.
0:05:28(laughing)
0:05:30But I do think it helped though.
0:05:33And that's why, you know, I even said last week with Renee,
0:05:35it's why a month prior in August that I sort of hinted
0:05:39that I thought the watch would be announced
0:05:42in the September event is that it's combined with the fact
0:05:45that they do kind of go along with each other.
0:05:48And if they were gonna talk about like health kit
0:05:51and the M8 thing on the phone and fitness tracking,
0:05:56they certainly are companions, siblings in that regard,
0:06:02that the information that's gonna fill up the health app
0:06:07is gonna come from those two sources,
0:06:10gonna come from the phones, gonna come from the watch
0:06:11if you buy the watch.
0:06:12But it's also to me about how you set up the next event,
0:06:18which I expect sometime in October,
0:06:23as per the previous three years,
0:06:25where they'll do new iPads
0:06:28and give Yosemite a proper public unveiling.
0:06:33- Right, and it would have definitely made
0:06:36in less less sense there as you've noted. I guess what's the more the thing is is like
0:06:45I mean so I've I've have an evolved position on the on the watch. I was initially quite
0:06:51critical thought I should be much more focused and limited. Now I think it's much more ambitious
0:06:56than I at first realized. And not only that I think that's probably the right move to
0:07:00establish the category which I'm sure we can get into in a little bit. But but the fact
0:07:05that it was introduced with the phone only reinforced the sense that it's a companion
0:07:12for the phone, but the event itself presented it that it wasn't.
0:07:16And so there ended up being actually, I think, more cognitive dissonance than had it been
0:07:22at a separate event.
0:07:23Maybe it would have been awkward at another time, but here it was just kind of strange.
0:07:28And I think it muddied the message that I think they were sending.
0:07:32Yeah, I think so too.
0:07:34And I'm not sure whether that's a mistake or not.
0:07:37I feel like we have to wait and see how this plays out
0:07:40and it may not hurt them at all.
0:07:43But I do think it was, as the time goes by,
0:07:47and I wanna talk about this because I think
0:07:50it's been an interesting three weeks
0:07:51where no new information has actually come out, right?
0:07:54I mean, we don't have any more information
0:07:57than what Apple told us and published on Apple.com
0:08:00on Tuesday, September 9th.
0:08:02But I feel like a lot of us have...
0:08:05Our understanding and expectations for the watch
0:08:11have changed significantly.
0:08:13Yours publicly, from what you wrote initially
0:08:16to what you've published this week.
0:08:17And mine too even, even since from what I wrote
0:08:22a week after the event.
0:08:23And I was listening to, I know there's another one
0:08:27that just came out today before, I didn't get to listen to,
0:08:30I was listening to the last week's episode of ATP and I thought that if you know
0:08:36I'd assume that most people who listen to this show or there's a large overlap between the audiences
0:08:42But if you you know are only an occasional ATP listener episode 83
0:08:46Was a really good one for the watch because it was to me. It was ATP at its best where the the three of them
0:08:54Were not in agreement and then in a lot of ways no no two of them were in agreement on a lot of the issues
0:09:01surrounding the watch right
0:09:03Which I you know made for a great discussion and they they
0:09:07worked their way into and out of a whole bunch of the problems surrounding the watch and
0:09:13And their understanding of it
0:09:15So that was a good one and there's a couple of points. I thought of listening to it
0:09:19Just that I want to talk to you about
0:09:21No, I agree. It was a great one. Um
0:09:24Especially Totally Inside Baseball when Casey took on Marco was the highlight.
0:09:31Yeah, that was the irony of it. Of the three, the one who I agreed with the most was Casey.
0:09:36I think Casey got it in a way that I feel like the other two didn't.
0:09:42Yeah, no, I agree. Basically Marco was saying, "How could you make an expensive item?"
0:09:48item and Casey pointed out that Marco drives a custom imported M5, which I think is spot
0:09:55on. I know both you and I have gone back to the car analogy on multiple occasions just
0:10:02because it's such a great one. It makes so much sense. There is no "reason" for a BMW
0:10:11to exist. There's no reason to drive an M5 on US highways. But people do it and they
0:10:17do it because it's giving them benefits beyond the technology underneath it. It's more about
0:10:25utility. It's funny, I just mentioned the Jeter thing. I would imagine this is your
0:10:29argument for why people like Keith Olbermann are wrong to criticize Jeter just on stats.
0:10:34I would, when you put words in your mouth, there's a contention that there's more going
0:10:38on here than just what you can count with numbers. It's absolutely the same sort of
0:10:43thing with any product, but particularly with something that you're wearing, that you're
0:10:48displaying to the world. There's so much more that goes into it than the actual technical
0:10:52utility of what it does or what it does not do.
0:10:56This is such a classic talk show because it keeps coming back to Jeter and the Yankees.
0:11:00But I do. We have so much to watch to talk about. I know that there's a bunch of you
0:11:05out there who listen to who and the sports stuff comes up, you
0:11:07guys start like looking for fast forward button. So I'm not going
0:11:10to go sporty sports on it. But the gist of it is so Keith
0:11:14Olbermann is it. I like him. I'm a huge fan of his work. He's
0:11:18but he's, you know, not really a straight news guy and maybe
0:11:21never really was but he's more of like the TV equivalent of a
0:11:24sports columnist. He's an opinion guy. And he had a rant
0:11:28on his show on ESPN last week. More or less saying no Derek
0:11:34Cheater is you know maybe a fine guy but he's not one of the greatest players
0:11:37who's ever played the game and everybody keeps going on and on about how one of
0:11:40the all-time greats is retiring and that is not and I you know not to put words
0:11:46in his mouth but his argument came down to look his stats just stats are very
0:11:50very good but they are not all-time great and I to me it's exactly like the
0:11:57people like the Android people who everything is about specs you know and
0:12:02And it's, hey, the A8 isn't that great because, jeez,
0:12:06it's still only dual core.
0:12:08We've been, you know, every top flight Android phone
0:12:11has been quad core since whenever, you know,
0:12:14they're up at two gigahertz and Apple's still downclocking
0:12:17them to one point, whatever gigahertz.
0:12:19And, you know, only one gigabyte of RAM they've been on,
0:12:23you know, and on and on spec wise.
0:12:25And it's like, if that's, if you want to judge the iPhone
0:12:27compared to the HTC One or Samsung's Galaxy Note
0:12:32or the Galaxy Alpha, whatever came out today,
0:12:35based on that classic tech review checklist style,
0:12:41how fast is the CPU, how much RAM,
0:12:46what is the benchmark on this or that.
0:12:49You're never gonna get it.
0:12:52You're not gonna get the difference
0:12:54between what Apple's trying to do
0:12:55and I think has largely succeeded
0:12:58year after year after year doing.
0:13:00You're not gonna get it.
0:13:01I you know if that's the way your mind works. That's why you're an Android guy you know and you're happy for it
0:13:05You know I'm glad that you know Android is is as successful as it is for you
0:13:09But you you know you're you're trying to judge the iPhone on the wrong thing and that's exactly
0:13:13Looking at Jeter that way. It's exactly the same way
0:13:16No, I agree and if I'm gonna continue the Jeter thing just for a moment
0:13:22I mean I think I I've I've come around on it and for the same reason and like
0:13:26The defense is like one thing right Jeter's widely criticized for his defense and according to the stats
0:13:31Rightly, so he's he's not like he always makes the routine play never makes mistakes
0:13:36But he doesn't have great range doesn't get to as many balls as he can
0:13:40Yet the most iconic Jeter play is a defensive play
0:13:45Where in the playoffs, you know best of five series the Yankees were losing 2-0 and he makes this like totally just kind of random
0:13:53play to catch a misthrone ball and flip it to home plate and get the guy out basically saving the
0:13:58game and saving this saving the season and and what what I like about that and yes it's it's
0:14:05very cliche and it's almost too neat in some ways um but that's Jeter's career in a nutshell I guess
0:14:12um is in the grand scheme of things like the the defensive measures like run saved or over average
0:14:19or something like that. I don't know exactly what the wording is. But that one run was worth like
0:14:24a thousand runs saved in the regular season. Right. And it was a playoff game against the
0:14:30Oakland A's in, oh geez, 2003? 2001. 2001. Oh yeah, yeah, 2001. Yeah, and the Yankees ended up,
0:14:38they didn't win the World Series that year actually. But it was in that emotional,
0:14:41everything was pushed back a week because of 9/11 having occurred that year.
0:14:49in New York. It was in Oakland, which is a crazy ballpark.
0:14:55And they were down to zero and is the best of five series. So if
0:14:58they lost that game, they were they were done.
0:14:59Right. And it's just an errant throw to home, you know, and it
0:15:05missed the cutoff guy who was supposed to be the first
0:15:07baseman and it Jeter had no reason to be there. There's no
0:15:10reason for a shortstop to ever be where Jeter was, but he was
0:15:13there. He saw it. He saw the play. You know, it's a great
0:15:17It's an absolute great exam or look at the other two to me two of the other signature plays in Giers career the two times
0:15:24That he went flying into the stands to catch foul balls
0:15:27You know, there was in a the one time it's like his face got so busted out
0:15:33He actually had to come out of the game. His face was all you know bloody
0:15:35He looked like he'd been in a boxing match, but he made the catch, you know, I
0:15:39Don't know just he's made catches like that. You know, there's there's footage of him, you know, you can watch it
0:15:45You can, you know, look it up on YouTube and see him make big game playoff catches flying headfirst into the stands.
0:15:52You know, he's done it more than once.
0:15:55Most guys finished their whole career and never make a play like that.
0:15:58So I totally agree. You can't measure it by stats.
0:16:00This whole thing is a thing in sports in general, right?
0:16:03Because there's been a big statistical revolution in in sports,
0:16:06breaking things down, particularly in baseball, where it actually works the best, because baseball really is a one on one game.
0:16:13It's not really a team game in some ways.
0:16:15and between the pitcher and batter.
0:16:19And in many respects it's been good.
0:16:22It's been good for teams.
0:16:23Teams that have adopted this approach have excelled.
0:16:26But like any sort of analytical based thing,
0:16:31it gives you an advantage briefly,
0:16:35but it's easily copied.
0:16:37So now almost everyone does it,
0:16:39and so the advantages are much less
0:16:42than they were previously.
0:16:44and what ends up mattering then.
0:16:46And you see this in, I think, probably more basketball,
0:16:49which is the sport I follow more closely,
0:16:52than in baseball, is the importance of
0:16:56lots of the intangible stuff,
0:16:57like how a team works together,
0:16:59like how Shuff shifts back and forth.
0:17:03So you had a team last year like the Spurs winning the title
0:17:06despite not being the strongest team on paper,
0:17:08and it's because there's clearly something else going on.
0:17:11And I think so much of that applies to,
0:17:16if you think about technology in general,
0:17:18previously in the '80s, in the '90s,
0:17:21businesses were buying it.
0:17:22And the idea is someone, the person who was buying it
0:17:25was different than the person who was using it.
0:17:27And that sort of scenario lends itself to featureless,
0:17:31lends itself to price competition
0:17:33because the user experience is completely divorced
0:17:36from the buying experience.
0:17:38But now when it's more in the consumer space,
0:17:40all these intangible things like what it's like to use it, how you feel when someone sees you pull
0:17:45out of your pocket. All these little bits and pieces that you can't really measure become much
0:17:51more important. As that's happened, Apple has benefited. As devices have become more personal,
0:17:59as devices have become with us more often, Apple has benefited. You can send a watch that's very
0:18:03visible and is with you all of the time. I mean, Apple, I would imagine, is
0:18:09salivating at the opportunity because it fits so well with their strengths. Yeah, I
0:18:14completely agree with that. I would say if you look at Apple, zoom out to the big
0:18:18picture and just look at them from the founding in 1976 to today. The miracle is
0:18:25that they survived until now. Right. You know, and now meaning, let's say,
0:18:30the iPhone in 2007 or even the iPod. Let's you know because that's it's that's the thing that
0:18:35turned them around. That they made it until 2001 when they could launch the iPod and and start to
0:18:44make you know to really grow outside the tech world. I have a friend a good friend Matt who's
0:18:52a fellow Yankees fan. I think he listens to the show he's probably gonna be thrilled I'm talking
0:18:55about him but he when I first met him he he asked me when he you know he knew I
0:19:01was a Yankees fan from reading you know during fireball but his theory is that
0:19:06there's two types of sports fans stats stats fans and story fans and you know
0:19:14it's it's any anytime you try to say there's only two type of people of
0:19:17course there's a gray zone and you know some stats guys are a little bit into
0:19:20the story side and some story guys are still interested in some of the stats
0:19:24I'm a story guy though in his telling where it's I just don't get into the numbers that much, you know
0:19:31And it's I I believe in clutch hitting I believe in clutch performance
0:19:35And I know that's one of the stats guys things, you know, like, you know, the the the baseball prospectus
0:19:40Guys Bill James, you know, there's a theory that they try to back up that there's no such thing as clutch hitting
0:19:46you know and I I say you say there's no such thing as clutch hitting and I say
0:19:51Derek Jeter and I just don't see how you could deny it and they don't meet his spotlight, right?
0:19:58And even though to back it up and one of them, you know
0:20:00The whole Jeter farewell thing is just chock full of all these statistics and stuff like that
0:20:06but one of the most amazing ones is and I this is off the top man, I'm not gonna look it up, but it's
0:20:12He's played 158
0:20:15postseason games
0:20:17Which is you know in the regular baseball seasons 162 games and most guys would be lucky to play 158
0:20:23You know even players who aren't injured take a game off here and there so he's played easily the equivalent of a full
0:20:30regular season all
0:20:33postseason which by definition is only against the very best pitchers and
0:20:38Opposing teams they don't you know every postseason game is against a team that was good enough to make it into postseason
0:20:45And he's got like a 320 career postseason batting average, you know enough that it would win the batting title most years
0:20:51And that's you know in the postseason
0:20:53no, that that's really impressive because
0:20:56batting averages dropped significantly in the postseason
0:20:59Right because the pitching is so much better so much better
0:21:03It's you know, it's it's really that that's that's the way to win
0:21:07You know postseason baseball games is to have amazing pitching. You know, it was like with the
0:21:11remember the White Sox
0:21:14when they won in 2000 I
0:21:17Get the year wrong six. When did he hear whatever year it was at the or whatever year the Chicago White Sox won a decade ago
0:21:24They they won the World Series in four games. They're four pitchers pitched four complete games
0:21:29It was it's like unbelievable
0:21:31They had four pitchers who caught fire and were just unhittable and they just went one two, three four the World Series is over
0:21:38Yeah, it's like having a hot goalie in in hockey or something. You can just shut out everything else
0:21:43and tech is exactly the same that there's story guys and stats guys and you know and the
0:21:50Tech industry was so dominated by the stats the specs
0:21:55for so long
0:21:58Because it was only tech people effectively, you know, everybody using a computer was a tech person you for some reason
0:22:06You know that that's that was the the problem Apple faced in 1984 with the Macintosh is they'd build a computer
0:22:12You know quote unquote for the rest of us and there were times of us
0:22:16Well there they had no interest in a computer. You know, it really kind of needed the computing world needed
0:22:22the internet and to make it a
0:22:25Communications device because that's something everybody wants to do everybody, you know, it's it's being able to communicate
0:22:31That turned the computer into something regular people wanted
0:22:35and
0:22:37By that time it was you know
0:22:39It was too late windows had become entrenched and you know when everybody got on the internet. It was a windows dominated world
0:22:45Yeah, no, I think this is the key thing that every time you hear someone talk about Mac versus Windows
0:22:51it actually had very little to do with the the
0:22:56Underlined dynamics it had to do with the external
0:22:59Context and who was buying and all that all that sort of stuff and anyone who doesn't really talk about that
0:23:05You can take in my opinion the you know their opinion with a very large grain of salt
0:23:09because that the world was just so completely and utterly different then and
0:23:14There's actually very few lessons to be drawn to today. Yeah
0:23:18The famous I brought this up and it's it's you know
0:23:23Maybe one of the all-time claim chowders of all time is commander tacos
0:23:27Reaction to the original iPod back in 2001 on slashdot
0:23:32Here's his whole comment after Apple released the iPod.
0:23:37No wireless, less space than a nomad, lame.
0:23:43So it was all, you know, it was completely looking at it
0:23:47from the perspective, and we laugh at that in hindsight,
0:23:49right, that the original iPod was lame.
0:23:52But it was a rational perspective from the point of view
0:23:57of the type of people who read Slashdot.
0:23:59- Oh, for sure.
0:24:00I'm surprised the only thing he forgot to put in was way too expensive.
0:24:04Yeah, yeah, exactly.
0:24:06Where maybe it's-- yeah, to hit the trifecta.
0:24:13Does less, doesn't have wireless.
0:24:14We want everything to be wireless for whatever reason.
0:24:17Less space than a nomad.
0:24:18Remember nomads?
0:24:19I mean, who even made that?
0:24:22Creative.
0:24:22No, creative labs.
0:24:23Yeah, I had a diamond--
0:24:25diamond was the other one.
0:24:26I had a diamond Rio.
0:24:28But yeah, creative labs.
0:24:29They're the guys who sued Apple about the sound chip
0:24:34in the iPod, and actually won.
0:24:35I think that single-handedly kept their company afloat.
0:24:39I think they might still be around, actually, I'm not sure.
0:24:43But yeah, creative technology's out of Singapore.
0:24:46- Right, whereas there was some amazing technology
0:24:49in that original iPod.
0:24:52Like the 1.8-inch hard drive,
0:24:55I think that's the size that it was, was a new thing.
0:24:59It was like nobody had used it.
0:25:00And there's some great stories.
0:25:01I forget who published it originally, but it was--
0:25:05what was the name of the guy?
0:25:09He ended up at Palm.
0:25:10Yeah, Rubenstein.
0:25:13Rubenstein, right.
0:25:14John Rubenstein was an engineering head
0:25:17at Apple at the time and was over in Asia scouting new stuff.
0:25:24And I think it was Toshiba who'd come up with these.
0:25:27And they're like, "Oh, and we've done this.
0:25:30We've gone from 2.5 inch hard drives to 1.8 inch
0:25:34and nobody wants to buy them."
0:25:36Because everybody's putting hard drives,
0:25:39the smallest thing anybody was putting hard drives into
0:25:41were laptops.
0:25:42And laptops in 2001 or 2000, whatever year it was,
0:25:47even the small ones, the difference between a 1.8
0:25:52and a 2.5 inch hard drive didn't make a difference.
0:25:54And so why spend it?
0:25:55Why, you know, everybody told Toshiba,
0:25:57well, why would we spend all this money when we don't really need to save that space?
0:26:00Whereas
0:26:02Rubinstein looked at them and thought that's it. That's the thing we can you know do this music thing with to you know
0:26:09Because 2.5 was way too big. Well, what's so interesting about this whole story actually is
0:26:13It's very it's a very
0:26:17Unapple kind of story which in some ways the iPod is a bit of an unapple type product
0:26:22But basically in Jan so the applet originally said like oh we're gonna be like about personal video
0:26:29That's gonna be the new, you know desktop publishing and then they're like, oh crap
0:26:33We missed the music boat and then Steve Jobs came out said actually our we have a new strategy
0:26:38it's called the digital hub strategy right and
0:26:40The center and we're gonna and then the rest of the event where the event where he introduced the digital hub strategy
0:26:46was in January 2001 in the same event they introduced iTunes and
0:26:52And they talked and they spent all time about music
0:26:55It was rip mix burn was the was kind of the catchphrase and the thing is the iPod didn't exist at all
0:27:01It didn't exist at Apple because John Rubenstein didn't go to Japan until February the next month
0:27:07Right and it was when he was in Japan
0:27:09He was introduced to or he saw the hard drive and it was the hard drive
0:27:13That was the genesis for the iPod
0:27:16And so it was actually it's almost like completely backwards from the way we think about an Apple product being created
0:27:21And so the original iPod was put together in like six months.
0:27:24And it was put together super fast.
0:27:27It was totally driven by the technology.
0:27:29But what came out wasn't a technological product.
0:27:32It was a music player.
0:27:35And there's something like, it's very different to be a hard drive
0:27:42than it is to be a music player.
0:27:43And it's that kind of transformation from a technological item
0:27:47to a something that you desire because it makes your life better that that
0:27:54apples that is Apple that what is what Apple is so good at yeah and you know
0:28:00we'll just get back to the watch after I'll take a break in a moment we'll get
0:28:02back to the watch but I do think you're right though and I think you even
0:28:05mentioned this on Strateecory this week or was it you who mentioned that the
0:28:08iPod was sort of an on Apple like product in hindsight I think I've
0:28:12mentioned yeah I think I've yeah I did in the article about the watch and it's
0:28:17It's worth keeping that in mind, I think, thinking about what the watch is going to
0:28:23be or what their intentions are.
0:28:24Is it an iPod on your wrist or is it something more?
0:28:27And I'm with you that I think it's something more.
0:28:29Yeah, I've gotten tripped up by the iPod a few times in my analysis.
0:28:35Last year I originally said the phone would be much cheaper than it was because I was
0:28:40thinking about the iPod and how the iPod was always price competitive.
0:28:43I did within a week, I think, and I think you chatted me at the time, said, "No, actually,
0:28:48I think it's going to be pretty expensive," and it ended up being that. Basically, the
0:28:52iPod was always basically an accessory. It was a single-purpose device.
0:28:58A peripheral.
0:28:59Yes, exactly. That's the word. It was a peripheral that was very cost-competitive. It was done
0:29:04in an Apple way. It was simple. It was very well thought out. It had beautiful industrial
0:29:10But if you think about it, every other Apple product of note has been a platform.
0:29:15It's been a general purpose computer.
0:29:18And the arc of Apple is to create a general purpose computer that's smaller and more attractive and more accessible than the competition.
0:29:27And everything fits in that arc except for the iPod.
0:29:32- Yeah, I don't think it makes any more sense than,
0:29:35as a typical Apple product,
0:29:38doesn't make any more sense than if,
0:29:40in some alternate universe,
0:29:41the Quick Take camera had really taken off
0:29:46and that Apple had become a major player
0:29:48in digital photography.
0:29:50Which of course they are now that the phone is out,
0:29:52but you know what I mean?
0:29:53I mean, the Quick Take was amazing.
0:29:55I forget what year that came out in the '90s,
0:29:57but it was amazing and it was one of the,
0:29:59it was super expensive compared to like film cameras,
0:30:02but it was one of the first digital cameras that was at least plausible for someone to
0:30:06own and it was amazing.
0:30:08And it took like 320 by 320 pictures or something.
0:30:12But in some world, in some alternate universe, that could have become a hit.
0:30:16Especially I think if it had, you know, if Jobs and his crew had gotten there a little
0:30:22earlier and cleaned up, you know, the product development like they eventually did.
0:30:29If it had been a little bit more of a jobsy Apple product than a Scully era Apple product,
0:30:36it might have been.
0:30:37But it would have been weird for Apple to be selling something like a camera, but no
0:30:40more weird than it was that they were selling a Walkman.
0:30:43No, totally.
0:30:44Oh, I actually think the camera is a great example.
0:30:49I think the other example that's interesting in telling is the Laser Writer, actually,
0:30:54Apple actually was like one of the preeminent printer manufacturers in the
0:30:59world but that was that they were never a printer company like that was that was
0:31:05to enable the Mac to like enable desktop publishing and all that all that sort of
0:31:09stuff but I think both are both are examples of in one a hit when not so
0:31:15much but of products Apple made but by no means define the company nobody
0:31:21think of Apple as a printer company?
0:31:24- It all comes back to the story/stats divide
0:31:28in the tech world where, and again,
0:31:30this is super ancient history, the laser writer stuff,
0:31:32but my understanding of that is Apple wanted others,
0:31:36they didn't even wanna get in their printer business,
0:31:38really, I mean, they'd take the money
0:31:41and they sold them for a lot of money,
0:31:42and they never, when they eventually got out,
0:31:44there was nobody was pouring one out for the Apple printers.
0:31:49It was never really, the company's heart
0:31:50was never in it, but the gist of it was that they couldn't get other companies to make
0:31:53them. They were like, "Hey, you guys could build these laser printers, and yes, they'll
0:31:57be crazy expensive, but look at the output. We can do beautiful high resolution output."
0:32:04And everybody, the industry was like, "Ah, dot matrix is good enough. We don't need that."
0:32:11Whereas the output was horrible from dot matrix printers.
0:32:14It's absolutely horrible.
0:32:16- It's crazy to even think of that, to compare them.
0:32:20But what's interesting though is,
0:32:23yeah, the Laser Writer wasn't,
0:32:25I'm looking at Wikipedia articles,
0:32:27released the same day as PageMaker,
0:32:28and it was way more expensive than what was on the market,
0:32:33but it had Apple Talk,
0:32:34which would be used by multiple people,
0:32:37so the per user cost was lower.
0:32:39Like, it's funny, you see almost all these characteristics
0:32:42of a typical Apple product wrapped up in a printer,
0:32:45which is kind of weird to think about,
0:32:47but I think the broad takeaway is nobody thinks of Apple
0:32:50as a printer company, and I'm definitely not gonna reference
0:32:53the Wazer writer when I think about analysis of the watch,
0:32:58but on the same tone, I think I'm not sure
0:33:01you should be referencing the iPod
0:33:02when you think about analysis either.
0:33:05- All right, let's take a break.
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0:38:01so let's let's go back and let's let's
0:38:05Let's get into the watch. So you've had an evolved
0:38:09Take on the watch like you even mentioned earlier in the show that your initial take was that this it was too unfocused
0:38:17And so start me down your path. What was your initial take? My I
0:38:22think I think your initial take represented an awful lot of
0:38:24people know for sure. I mean, it's one of the it's one of the
0:38:27most popular articles I've had in quite a while, which which is
0:38:29funny, because people like, oh, you just change your mind. Well,
0:38:31well, I know, actually, the feedback was very, was very
0:38:34positive in favor of that piece. I'm not I'm not winning any
0:38:37brownie points by by switching. Basically, my criticism was
0:38:42primarily about the event. I mean, because I wasn't there. I
0:38:46And obviously, even people who were there couldn't use the watch.
0:38:48So it's hard to get too much into the actual details.
0:38:52But the event in general, I compared and contrasted it to previous new product
0:38:57introductions. So going back to the iPod, going back to the iPhone and the iPad,
0:39:03in all three cases,
0:39:06Steve Jobs did a bit of exposition about why this product needed to exist.
0:39:14You know, what's the market? What's what's the problem people have?
0:39:18What's out there? Oh, and here's our new thing.
0:39:21And it happens to fit the market and take care of problems and all that sort of thing.
0:39:25So that didn't happen with the watch.
0:39:30What happened to watch is Tim Cook got on stage and he said, oh, here's the next store.
0:39:34You know, we're very excited. We've been working very hard.
0:39:37Here's the next the next chapter in Apple's story.
0:39:40And then, boom, a video popped up, you know, like it was it was a great video.
0:39:42was showing the industrial design of the watch,
0:39:45and then it pops on screen, and everyone's like, ooh.
0:39:48But that piece about why does this exist,
0:39:51where in the market does it go, was missing.
0:39:54And that was concerning to me, and that concern
0:39:59was amplified by the software demo, which to my mind,
0:40:04again, going into the event, I was thinking
0:40:08this was an accompaniment to the iPhone.
0:40:11That's why it was being introduced to the iPhone.
0:40:12This was my thinking going into it.
0:40:14And in that light, I'm like, why are they doing a demo
0:40:16that doesn't leverage the iPhone?
0:40:18Like they were searching for movies on the watch.
0:40:20They were looking at all these photos on the watch.
0:40:22Like, well, if you have an iPhone in your pocket,
0:40:24why wouldn't you use that to do this sort of stuff?
0:40:27And so I'm like, this demo is kind of weird.
0:40:30They didn't say why.
0:40:31This has me a little worried about the whole concept.
0:40:35- Yeah, I completely agree.
0:40:38Why would I wanna buy this?
0:40:41Why what what do you know? What is the job to be done to use the the I?
0:40:46Was gonna say Horace, but I guess he took that from clay Christiansen
0:40:51Yeah, clay Christiansen, but you know, it's just a way to put it in context. But yeah, what what what are you hiring?
0:40:57the watch to do and
0:40:59I don't think they answered that but and I'm again a time will tell on this front. It's either a sign that
0:41:07That they have lost focus
0:41:10Post jobs and it is the first you know we're either gonna look back at that
0:41:16introduction event as the first warning sign that Apple is in trouble and is
0:41:21going to isn't going to do the same good job with a new an altogether new product
0:41:26as they did before or it'll be forgotten and it was because it was it was on
0:41:32purpose yeah well it's either it's either one or the other either they
0:41:37purposefully left it largely mysterious and they're gonna save that why for what
0:41:43I presume to be the event in January or February where they're going to say okay
0:41:47now it's going on sale and here's everything you need to know about it all
0:41:52the prices all the features here's what the SDK can do you know all of that
0:41:57stuff is gonna come in a separate event and that they did this sort of teaser
0:42:02event for strategic reasons that will be clear after that watch actually comes
0:42:09out because that's the best to me that's the best way it's like the difference
0:42:13between a preview that's supposed to tell you everything you need to know to
0:42:18make you want to go see this movie or a teaser that's just supposed to put the
0:42:22movie into your head that no that's a that's a that's a good analogy to think
0:42:27about it I think there's also another explanation to I think it's possible in
0:42:31January it's even not as clear as it could be and the reason that is is
0:42:39you know I actually I cheated when I did that new product introduction because I
0:42:45didn't include the Mac and actually I did go back and watch the Mac event but
0:42:50it didn't fit as neatly because if you actually if you go back the
0:42:56Mac introduction was almost identical to the watch introduction. It was Jobs saying we've
0:43:02been working super hard, this sort of thing. And then there's this long, what's the song?
0:43:10You know, the... Sock Ape... I forget the name. I know what you mean.
0:43:16Chariots of Fire or something like that. Oh, no. Right, right. It wasn't the one from 2001,
0:43:21it was the Chariots of Fire song. Yeah. I think so. I don't remember. The video I watched
0:43:26actually was, I think for copyright reasons, like all the music was taken out, but if I
0:43:30recall that's what it was. And then he pulls out, he reveals the Mac. Like it was very,
0:43:37it's funny, like it actually ended up being a lot like the watch, and I'm not sure that's
0:43:42a great precedent. Obviously in the long run the Mac turned out well, but as we just discussed
0:43:47it had a bit of a struggle at the beginning. But at the same time, if you look back at
0:43:52the iPhone, nothing in that event was actually very pertinent to the way we use iPhones today.
0:44:00And that didn't make the event a bad event. It remains an amazing event. You know, it's
0:44:05kind of like Steve Jobs' like all time, you know, on the all time great hit list, it's
0:44:10number one. But at the same time, when you're creating a platform, when you're creating
0:44:16a new thing that is going to create all kinds of new opportunities, it's almost by definition,
0:44:22definition impossible to know at the beginning what that's all going to be. Remember, Steve
0:44:26Jobs, I know there's contention that Steve Jobs did or didn't want the App Store. I'm
0:44:30in the camp that believes he did not want it. He thought that Apple could meet all the
0:44:34needs that the phone ought to serve, when actually that wasn't even close to being true.
0:44:40And I think there's a way to look at this watch event and that Apple, maybe they didn't
0:44:44articulate as well as they could have, but they now realize that. They know that we create
0:44:49platforms there's no way we can ever even fully know what this is going to do
0:44:53and but we've created a foundation for something really great I'm of the
0:45:00opinion I think it's pretty clear he didn't want an app store in 2008 which
0:45:05is when the actual app store came out I think that his I think he I I think that
0:45:12he must have known that eventually they would do it but I think that he thought
0:45:16it was a this does not need to be a top priority for the next year you know we've got so many
0:45:21things to do you know this first phone is so you know has so much room for improvement the last
0:45:28thing we need to worry about is the the app store sdk angle right and all the limitations that
0:45:33imposes on you and things right i think that if you had had if we could go back in time and have a
0:45:38honest discussion with steve jobs in the summer of 2007 you know and people had started jailbreaking
0:45:45I mean like in July, I mean like weeks after the thing came out, like to me that's still,
0:45:51it's one of the great things in indie Mac development history was the way that, you
0:45:58know, the first couple of developers who jumped on that.
0:46:02I mean like the first version of Twitterific was written before there was an SDK.
0:46:09Like Hockenberry had a version, a Twitter client running on the iPhone before there
0:46:13there was an SDK. I love that. But the demand it was just I
0:46:20think he just underestimated how badly the people who became
0:46:23indie iOS developers wanted to be able to do that. But I do
0:46:29think you're right to that he you know, is the nature of his
0:46:31personality was such that he assumed that his what he wanted
0:46:34the phone to do was what most people would want it to do and
0:46:36it would cover a broader swath of you know, why people would
0:46:42want it.
0:46:42And that's what's so interesting about this is a lot of the people who are disagreeing with me now, so my position now has evolved to the, I don't think Apple is making an accessory.
0:46:52I think they're making a new platform. A lot of people disagree with that, want the Apple defined vision. They want it super clear on what it's going to do.
0:47:02and they reference, again, I did the same thing,
0:47:07so I'm not like by any means criticizing,
0:47:09I think it's a very valid point of view,
0:47:10they reference kind of like the iPhone,
0:47:13but Steve Jobs' vision for the iPhone
0:47:17ended up being too small in a lot of ways.
0:47:20I mean, that's not true in a big sense,
0:47:23but in this kind of narrow sense
0:47:24about what ought to run on it
0:47:27and when you ought to enable all that stuff to run on it.
0:47:31Um, and not just not just too small in the 3.5 inch diagonal, too small in the conceptual sense.
0:47:39Right, exactly. And, and, you know, it's a great for all for for the kind of pining that
0:47:47this sort of talk can inspire for Steve Jobs and for his way of interesting products and the way he
0:47:54was such a master, you know, it's textbook like this isn't like particular to Steve Jobs, he just
0:47:58just did it better than anybody else. He was the best salesman in the world. You have this
0:48:04problem. Oh, you're right. I do have that problem. Look at the competition. They don't
0:48:07really work. Man, yeah, they all suck. Oh, wouldn't it be great if there was something
0:48:11that met all your needs? That'd be awesome. Oh, look who we just introduced. Here's my
0:48:15money. Take it." He just walked you through that so perfectly.
0:48:22I do think that's in some ways missing, but at the end of the day, the needs he ended
0:48:26up selling weren't the ones that were actually key to the product or what made it wildly
0:48:31broadly successful.
0:48:34But they were good enough to get it off the ground. I mean, and you know what, those things
0:48:38are still reflected in the default dock of the iPhone today, right? The Steve Jobs, not
0:48:47iPod, iPhone. Did I say iPod? I said iPod, but I meant iPhone. The dock, the four apps
0:48:54at the bottom phone, mail, Safari, and it was called iPod
0:49:01back then. That's where I started getting tripped up. And
0:49:03now it's music. That's what he wanted, right? He wanted a
0:49:07device that would play his music. And it would be a cell
0:49:11phone, and he could throw out whatever piece of garbage from
0:49:14Motorola he was using at the time. He could do his email, and
0:49:18he could browse the web. And there you go. There's the
0:49:21product. And that was awesome. That alone would have been
0:49:23enough.
0:49:24Right.
0:49:25And the thing is, I think Apple…
0:49:27But it wouldn't have been enough to make it a compelling product.
0:49:30It would not have been enough to make it a world-changing product, which is what it has
0:49:35eventually become.
0:49:36Right.
0:49:37No, that's exactly it.
0:49:38And I think the reason why, and this is what makes the watch interesting, is Apple actually,
0:49:44in some ways, has some of those pieces there.
0:49:47Like, there's a slide where Tim Cook has the three things.
0:49:49It's a great timepiece. It's health and fitness. It's like the most personal communications device or something. I think those are the three items
0:49:57So the fact that I can't remember it clearly is indicative
0:50:01Yeah, yeah now the personal
0:50:05Well, maybe the personal communication right that the three things that they're kind of selling to watch on it at the event this month were
0:50:12fitness tracking
0:50:15time telling yep, and
0:50:18the personal communication why the thing is those like I mean I
0:50:23Even more so than the phone like the use case for the phone was so obvious, right?
0:50:28Just to make a better just to make a better phone would have been enough to sell a lot
0:50:33Just to make a better Nike fuel ban is not enough to sell a lot
0:50:39Because the the you're not same as the iPod just to make a better music player was enough to sell a lot
0:50:46Because what was the alternative to carry your computer around like the alternative was was a non-starter
0:50:52the alternative to a watch is to use the phone in your pocket like the the the
0:50:57competition for even considering buying a watch in the first place is far steeper
0:51:05Today than it was for any any product except for maybe the iPad is probably the best is
0:51:11Probably the best comparison here. Like why would you buy an iPad if you already if you already have a Mac?
0:51:16And so for that reason,
0:51:18this is the biggest thing that changed my mind.
0:51:21Like I think Apple releasing a focused product
0:51:24would have meant a niche product
0:51:25that would never get great traction
0:51:28because it would never be,
0:51:29the delta over just pulling a phone in your pocket
0:51:32would have never been great enough.
0:51:33Like they needed a swing for the fences
0:51:35and it's probably raising risk, right?
0:51:37But the way you would get a great return
0:51:39is by taking on greater risk
0:51:40and I think that's what Apple's done.
0:51:42- I, very, very, very much in agreement with that.
0:51:45I think was your piece actually your phone piece that triggered this particular realization.
0:51:53So I'm glad to hear you're in agreement. Wait, which phone piece?
0:51:56The observations on initial observations on the phone. Basically, you kept referring to the fact
0:52:03that if Apple would have only done like a notifications and tracker device, you'd been
0:52:09worried about the future of the company or something along those lines. I'm like,
0:52:12like, "Why is he being so hyperbolic?" And then I basically thought about it and was
0:52:17like, "Well, that's what triggered me thinking through. What if they only did this? What
0:52:22would be the implications of that?" And that was my piece this week. If they only did that,
0:52:26there would actually be a lot of long-term negative effects from limiting the potential
0:52:33of the platform to limiting the potential market, all of which would be very bad for
0:52:37Apple and which is why I think they rejected that approach and I presume was your your thinking as well
0:52:43yeah, I think so a
0:52:46Little thing just a side note one thing that they've said publicly
0:52:51I think they said it at the event or at least they said it after the event in like on the record
0:52:57Statements not like off the record and then I think Tim Cook repeated it in his interview with Charlie Rose, which was excellent
0:53:05Really really interesting. I
0:53:07Just one of the the best interviews I've ever seen with anybody related to Apple ever
0:53:13But they came out and said that they've been working on this for three years and
0:53:20They never ever say stuff like that
0:53:23They are super secretive about how long they've been working on stuff
0:53:27they never said how long they were working on the iPhone and it took years and
0:53:32stuff that was I think mostly off the record for it to come out that
0:53:36the way that the iPhone came about was that they were working on a tablet and
0:53:40The tablet got pretty cool and then they had this moment where they were like, wait a second
0:53:45Screw this tablet size for now. Let's take this tech and shrink it. Can we shrink it to be a phone?
0:53:52Boom, there's the phone. They don't they don't they never talked about that
0:53:57They didn't talk because they don't want people to know how they were right. There's something part of the new
0:54:02Tim Cook Apple is the simple fact that they said that they've been working on
0:54:06this for three years and I can't help but think that part of that is that they
0:54:12kind of want to say this whole thing is after Steve because three years is how
0:54:18long ago Steve Jobs died like I don't think that's a coincidence that they're
0:54:23saying that publicly and it's a way of saying that I I think it's a sign of
0:54:27their confidence in the watch but they're setting it up in advance that
0:54:31that they think this thing is, they're onto something.
0:54:33They think it's gonna be huge,
0:54:35and they don't want people to say,
0:54:37well, I'll bet Steve Jobs invented it.
0:54:38It's probably the last thing he invented.
0:54:40Now show me something that you can invent,
0:54:41you know, without Steve Jobs.
0:54:43- That's interesting.
0:54:44Yeah, that makes total sense.
0:54:46- So for example, I remember when I got to take
0:54:49that antenna tour after Antennagate,
0:54:51and they took a bunch of us back
0:54:53into their antenna testing lab,
0:54:55and we got to see, you know, these cool chambers
0:55:01they test these things. I forget the guy's name, but he's the antenna engineer who and
0:55:07he led the tour and he was a little nervous. He did great, but he was a little nervous
0:55:10because he's just is not used to speaking to the press. He's, you know, he's an Apple
0:55:14employees is the last thing he does is speak to the press. And, you know, a week prior,
0:55:20you know, he had no idea it was like this antenna thing blew up and within the course
0:55:24of a week now here he is leading 20 people around Apple's you know lab and
0:55:31Schiller and Katie cotton were part of the group too but they you know just
0:55:35were walking around sort of supervising and somebody asked at one point they
0:55:41were talking about the external antenna design which was brand new on the iPhone
0:55:474 nobody else had ever done it and initial reaction from a whole bunch of
0:55:52people was, "Well, that's a stupid idea. The reason nobody else does that is it's a bad
0:55:56idea." And then the antenna gate thing came up and they said, "Hey, touch it here and
0:56:00you lose your cell phone." And they were like, "See? Told you. Terrible idea. Apple is a
0:56:05terrible engineering company, blah, blah, blah, blah, blah." Well, we were talking about
0:56:08it with them on the tour and somebody, I don't know who, but one of the writers asked, "Well,
0:56:13how long have you guys been working on that antenna design?" And he was going to answer
0:56:18honestly and Shiller immediately jumped in and said, "We're not going to talk about how
0:56:21Long we've been working on the antenna design. I mean like just cut him right off. It was sort of an awkward moment
0:56:27Because that was something they did not want to say, you know
0:56:31They wanted to say how the you know, this antenna is actually is a good design trust us
0:56:36You know, this is going to work out this this issue with the attenuation when you touch it at the wrong spot
0:56:41It's a real thing, but it's not that big a deal
0:56:43But there was no way that they were gonna mention how long that this guy had been working on an external antenna design
0:56:51That yeah, that's interesting a Ruben and that's just the antenna design let alone saying, you know, we went from scratch to
0:56:58Shipping I watch in three or Apple watch in three years
0:57:01Yeah, no for sure. I mean it the the whole Apple PR thing is interesting. It's funny. You mentioned the tour of the labs
0:57:08I wrote about this in my in my daily update this week where that that that was a good 22 days
0:57:15I think after the antenna gate story first broke on on gizmodo
0:57:20photo of all places. Whereas this week, two days after the bent iPhone story broke, they
0:57:27were already giving people tours of the labs. I think they really learned their lesson on
0:57:31getting ahead of such things.
0:57:34Yeah, should we interrupt the watch to talk about Ben-Gazi? Ben Gate?
0:57:42I mean, I think antenna gate is probably the best way to think about it. I mean, the iPhone
0:57:48was on sale until I think a week ago, and it sold hundreds of millions of units. And
0:57:53I think that's pretty much all that needs to be said. The idea that Apple would not
0:57:57be aware or have tested this sort of thing is preposterous, and given their track record,
0:58:05I'm very willing to give them benefit of doubt. And as someone who has criticized Apple in
0:58:11various forums. It's preposterous to suggest that they didn't know or didn't have a particular
0:58:18tolerance that the phone needs.
0:58:21The reason it takes any hold though is that it plays into the misconception stereotype
0:58:26of Apple. That they would do something like make an antenna design that looks awesome
0:58:33and save space to make the device thinner but then have it not even be able to make
0:58:36phone calls like that's the worst you know the worst stereotype of Apple you
0:58:41could imagine and it's such a delicious sound bite you know world-famous iPhone
0:58:49new new model can't make phone calls it sounds so amazing and then that you know
0:58:54it's it's the perfect type thing for broadcasts right the TV people really
0:58:59are the ones that made that catch fire and the bend thing is exactly the same
0:59:05You know Apple so desperately, you know
0:59:07or not desperate but
0:59:10over
0:59:12Interested obsessed with making devices thinner made a phone so thin that it bends when you put it in your pocket, right?
0:59:19No, I think I I think the the key thing too is
0:59:22As you just said like there was an antenna issue
0:59:26It just it's just an issue of and so when the Verizon iPhone came out six months later
0:59:31There was a different antenna design and so like it's not to say that there's not a problem
0:59:36I don't think either of us are saying that I mean clearly
0:59:39You know Matt Matt honing did a thing and wired and his his phone bent and I have no reason to to doubt him
0:59:46But at the same and so I would imagine if the six plus s or whatever
0:59:52It's gonna be called next year comes out that there's gonna be something
0:59:55Slightly different in the chassis or even right now that I'm making changes now to restrict it
1:00:01But at the same time, there's a very wide canyon between there are very isolated circumstances
1:00:08where this might happen to, "Oh my God, the house is on fire.
1:00:12It's coming down."
1:00:13And I think that's what's so frustrating about these sort of gates.
1:00:18Yeah.
1:00:19Well, and it's that adage that it requires an order of magnitude more effort to refute
1:00:28bullshit than it does to create it. It's so hard. It's the fact that it's bullshit
1:00:34that makes it so hard to refute, you know, like compare and contrast with the the
1:00:388.01 iOS update that that effectively bricked a bunch of iPhone 6s. I mean I
1:00:45think Apple said today it affected about and wound up it was out in the wild and
1:00:48wound up affecting like 40 or 50 thousand phones which is I guess good
1:00:54compared to the you know 200 million people using iPhones in the world but
1:00:58still 40 or 50,000 people who just within the last week have spent upwards
1:01:03of six seven eight hundred dollars on a new phone had a software update that
1:01:07rendered their phone unusable and there was a solution they didn't have to take
1:01:11it back it wasn't like the phones were permit you know you just had to go
1:01:14through a hassle of downloading it in iTunes and syncing it to a PC and I'm
1:01:18sure that's actually also above beyond the technical can of many users and so
1:01:23some people probably did have to go to a store you know go to an Apple store and
1:01:27it fixed but it was a real issue it was a real problem it was an actual botched
1:01:31iOS update and Apple you know issued a statement that said we're really sorry
1:01:36we screwed this up this was terrible sorry we're working on a fix as fast as
1:01:41we can sorry do we do we mention that we're sorry and it was over you know
1:01:47that's it it was a real issue they dealt with it everybody kept it in perspective
1:01:51because it was real right and it's I don't know I said this with Marco before
1:01:57I know Marco I think his wife had this problem, but with the iPhone 4 there was an actual really bad technical problem
1:02:03Which was the the sensors that you know the ones that when you hold it up to your face remember that it was
1:02:10They did not work correctly at all and that was a real thing and it was really affecting people with the phone
1:02:17And there was nothing you could do you know?
1:02:19it's
1:02:21You know, it was a real thing and it got like one one thousandth the publicity that the antenna thing did
1:02:27You know and meanwhile like you said the iPhone 4 was on sale until two weeks ago in some parts of the world
1:02:34GSM not the Verizon one the GSM iPhone 4 with an absolutely unchanged antenna layout was on sale
1:02:42until last week it sold, you know, it was
1:02:45Tremendous numbers for years and years and years and everybody just sort of forgot it
1:02:50But yet people still bring it up on Twitter last night
1:02:52Hey, Zeus Diaz even brought up as I can it somebody said something like this is the worst part of the tech press
1:02:58And and he was like the worst part is you know people like Gruber who still denied denied and ten agate
1:03:04People are still hung up on that
1:03:07People still think that there was like in their twisted view of history
1:03:12They think Apple had a phone that couldn't make phone calls and that everybody just sort of brushed it under the rug
1:03:17Yeah, no, there's always a lack of context. It was interesting is like Apple in some ways has benefited
1:03:23Right because they they weren't criticized for the sense of the iPhone 4 and this week in you could argue
1:03:29They've gotten less criticism. They deserve for the 8.0.1 update which that's a terrible terrible bug and
1:03:36It it's very concerning about how that gets released and there's there's a wide like there's so much potential for
1:03:45actually real serious
1:03:47investigation and criticism as opposed to bullshit outing someone's name crap that Bloomberg
1:03:54pulled. It's a very real issue. I think part of the reason it was not really focused on
1:04:01was because everyone was talking about Ben Gate. It's frustrating as someone that wants
1:04:12if you want Apple to create good products, you should be way more worried about 8.0.1.
1:04:16In my opinion, they should be worried about the bend thing.
1:04:18Yeah, because it's the sort of thing that could happen.
1:04:21It feels like it could happen to me.
1:04:23It could have happened to me.
1:04:24I happen to not been paying attention at the time that it was out and in the wild.
1:04:27By the time I was, I knew not to ignore the update.
1:04:33But I could have easily installed that.
1:04:36The other thing I think long term that that issue that the 801 update does that I think
1:04:42harmful is it puts the seed out there that hey be careful of updating your iPhone
1:04:48because it could be ruined and then it makes some number of people less
1:04:53reluctant to stay up to date which hurts Apple and developers in the long run by
1:04:58you know increasing fragmentation that that's a that's a great point and no
1:05:05it's it's a great point but you know again lost lost in the shuffle of you
1:05:10know, the great Ben Gates scandal of 2014. Yeah, the Ben
1:05:15Ghazi name is funny. For some reason, though, I just can't
1:05:18quite adopt it. I've stuck with I stuck with Ben Gates. Yeah,
1:05:21that's, I think that the the real Ben Ghazi I think it's such
1:05:26an overblown fake scandal, not that the tragedy of the people
1:05:29dying is not serious, but the idea that there's anything that
1:05:33was being covered up is just a bunch of right wing nonsense.
1:05:36But the people who believe it are really, really into it and
1:05:38think it's, you know, the most important under reported
1:05:42political story of the entire Obama administration. And I
1:05:46guess it's best to stay away from joking about it. So if
1:05:49you're out there and you're offended by me joking about it,
1:05:51I retract the joke, because it's not that funny a joke. It just
1:05:55so happens, though, that it's such it is such it, it verbally
1:05:59it works so well. You just put a D in there and it's all of a
1:06:02sudden,
1:06:03Well, I mean, yeah, I mean, again, one of those things I
1:06:07I don't want to touch with a 10-foot pole, but right it only works as a joke though if everybody sees
1:06:12the real Ben Ghazi scandal the way I do as a completely overblown hype whereas if there's you know
1:06:1920% of the people listening to the show think it's actually an outrage and a tremendous scandal then the you know
1:06:26It has the wrong effect because it makes it seem as though you know
1:06:30The Ben gate is Bend gate is a real issue, right? No, that's exactly it and I I'm
1:06:36That's the same reason I've been using Ben gate as well
1:06:39Right, even though it sounds like Ben gate, which is my name
1:06:43When he's not bad, but yeah, right
1:06:47Let's take another break here. Thank our next sponsor and it's our good friends at fracture
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1:09:31So I think we've been a little all over the place on the watch, but I've been very,
1:09:37I personally have been all over the place. I've written four pieces now that have,
1:09:42you know, there's kind of an arc where I'm more opposed all the way to,
1:09:47I think this is really ambitious and potentially the future.
1:09:50But you've only written, you've written the one, you've written a couple, you've linked to a few
1:09:56pieces with like a line or two of commentary. Like I think I speak for a lot of your readers
1:10:02that is curious on like the group or exposition about the watch.
1:10:05Yeah, I'm still working my way on that. I thought I'd have something a week ago,
1:10:10a second follow-up, and I'm still, it's still like in the liquid state. It's not solidified.
1:10:15But you know this you know it's why I do the show it so I can talk my way through it
1:10:19Bottom line here. We are an hour and ten minutes into the show. Here's thesis statement thesis statement is
1:10:25Apple watch I believe is
1:10:29intended to be a completely standalone platform for compute personal computing and
1:10:35Its relationship to the iPhone. This is not wholly original
1:10:40I've heard other people say this you know speculate, but I'm gonna try to put it very clearly its relationship to the iPhone
1:10:45is very much analogous to the original iPhone's relationship to iTunes running
1:10:51on your PC or Mac. Right? And when you got the first iPhone in 2007 you couldn't
1:10:55even activate it without iTunes. You had to actually plug it into your computer
1:10:59and run iTunes and activate it on AT&T through your Mac. It was, you know, that
1:11:06they just didn't have the full stack. They didn't have everything ready to go
1:11:11for it to be the standalone device that it is today where you can be a fully functioning
1:11:16iPhone user with no other computer products or you know you could just use it with an iPad and
1:11:24never pair the two and your backups go to the cloud your software updates come over the cloud
1:11:30and you never never connect it to a Mac or PC. I think that's the relationship the watch will
1:11:37will have with the phone where eventually it will do full Wi-Fi and eventually it will
1:11:42have a SIM card and will do cellular networking.
1:11:48That doesn't mean – and again, this comes to one of the topics on ATP.
1:11:52Like Marco's thing is never bet against the smartphone.
1:11:54It's a good point that the smartphone is sort of an optimal – it's sort of an endpoint.
1:12:01Obviously, the size can fluctuate a little bit.
1:12:04the basic idea of the thing that you can carry in your pocket, don't bet against it.
1:12:09There were some of us, myself included, who thought that the iPad might grow to be bigger
1:12:13than the iPhone or at least grow to be the same size, and it's not.
1:12:17It's super successful.
1:12:18Tablets are a huge deal.
1:12:20The iPad is the most successful and it is very successful, but it is not as popular
1:12:24and not as successful as the phone.
1:12:29So I wouldn't say that when I say that the watch will be a standalone platform that won't
1:12:33need a phone. That doesn't mean that everybody's going to ditch their iPhone and just do everything
1:12:37on a watch. I just think it means though that some people they could that they won't have
1:12:43a they don't they won't need to carry a phone in their pocket.
1:12:47So I I completely agree. I've said I actually made the same analogy on a previous version
1:12:55of exponent where my co-host vehemently disagrees. And we definitely we definitely got into it.
1:13:01But I think the phone for the watch is an implementation detail.
1:13:09And I think that's critical to understanding the way Apple, I think, introduced it.
1:13:18Imagine that Apple had introduced the iPhone and they had said, "Oh, well, you don't need
1:13:22to manage music on your phone because you can do it on iTunes on the Mac and it will
1:13:26all sync over," right?
1:13:28Which is what they did with the iPod.
1:13:31The problem is that would have, a few years down the line, it would have been so much
1:13:37more difficult, if not impossible, for Apple to make the iPhone a truly standalone device.
1:13:43From day one, the iPhone, even though it needed a Mac, it had to be designed as if it didn't
1:13:51need a Mac in all these fundamental assumptions.
1:13:55I think it's the same thing with the watch.
1:13:59You can't build in the assumption the phone is there if you know it's going to be going
1:14:03away or else you're limiting, you're lowering the ceiling, you're lowering the potential.
1:14:07And I think the difference from the iPad is this is smaller.
1:14:11And when it comes to design is all about constraints and what's the controlling constraint.
1:14:19The controlling constraint when you're at your desk is not size, it's not weight, it's
1:14:26comfort, it's productivity, it's why I'm sitting here in front of three monitors and
1:14:30an ergonomic keyboard and a mouse. But when you're moving around, the chief constraint
1:14:38is portability. And the fact of the matter is, is a watch is more portable than a phone.
1:14:44So not next year, not the year for that, maybe not even five years down the road,
1:14:47but 10 years down the road. It's very easy, in my opinion, to see
1:14:54me carrying a much larger smartphone less frequently because I always have a watch.
1:14:59I think a complete agreement except I think 10 years is too long and it goes back to the
1:15:06Bill Gates adage which is probably one of the smartest things he's ever said but that we as
1:15:12tech people perennially vastly overestimate how much we can do in one year and underestimate how
1:15:23how big the changes will be in 10 years,
1:15:26over and over and over every year, every decade.
1:15:29I think 10 years is too long.
1:15:31'Cause just think about the phone, man.
1:15:32The phone is only seven years ago
1:15:35that we had the original.
1:15:36When did the phone come completely standalone?
1:15:40When was it that, I guess it was probably with iCloud.
1:15:43So that would have been-- - I think it was I was four.
1:15:45Was it or?
1:15:46- It would have been, I think 20.
1:15:52- The iCloud was, I thought it was 2011.
1:15:55'Cause it was Steve Jobs' last keynote.
1:15:57- Yeah, Steve Jobs' last keynote, right.
1:15:59Right, right.
1:16:01He did the original iPad introduction in 2010
1:16:03and then he made a surprise appearance
1:16:05at the second iPad event
1:16:07when he was technically on medical leave.
1:16:09And he was like, "I didn't wanna miss this."
1:16:11And then he was at WWDC
1:16:13and that was the last time we saw him.
1:16:15So 2011, so that was four years
1:16:18from when the original iPhone came out.
1:16:22And at that point, it was four, call it five years,
1:16:26give iCloud a year to bake, I guess.
1:16:28But within five years,
1:16:29the iPhone was a wholly independent platform.
1:16:32And it won't just be like one switch flipping.
1:16:36It's do this, then that, then this, then that.
1:16:40I mean, the original iPhone,
1:16:41it's like I was thinking about it
1:16:42in the context of the watch.
1:16:43It was crazy how little it did on its own.
1:16:46You had to sync your calendars and contacts through iTunes.
1:16:50So if you wanted to have the same contacts on your phone
1:16:53and computer, you had to keep connecting it to iTunes
1:16:58and syncing there.
1:17:00I mean, it was crazy.
1:17:01So part of that is tech.
1:17:02I think with the phone-- and you're right, a lot of it
1:17:04comes-- the constraints are different.
1:17:06With the phone, it was more about just
1:17:10that there was just so much software that
1:17:12needed to be written before they could do it.
1:17:15And being able to just depend on iTunes in the meantime
1:17:20just was a very helpful crutch. Because it was worth launching
1:17:24when they did. It would not have been worth waiting another two
1:17:28or three years until they had more of that. That whole stack
1:17:31ready to go. And with the watch, I think it is more engineering,
1:17:35right? Why doesn't it have a SIM card? I think I simple I think
1:17:39battery life and size size is an issue too, though.
1:17:42Yeah, there is a Samsung one I think that has a SIM card. But
1:17:45yeah, it's huge. And it's way bigger. Right. But the thing is
1:17:48like, yeah, I would. One thing that you've learned over the years is never bet against
1:17:53miniaturization and never bet against Moore's law. And I think you in the antenna, because it's
1:17:58analog, like there's a lot of real challenges there. But at the same time, like, if you've
1:18:03learned anything in tech, it's don't bet against like, don't bet against that kind of stuff. And
1:18:10the this question, this is the thing that I came up with, you know, with James on my podcast is,
1:18:17You know, where do you draw the line on what features it's okay to ship with and what features it's okay to ship without?
1:18:23And the way I draw the line is not by looking at the technical implementation of the feature,
1:18:33but the impact it has on normal people's lives.
1:18:36And what I mean by that is when the iPhone came out, people were already plugging in their devices into their computer every night.
1:18:45Those devices just happen to be iPods.
1:18:47So Apple was just asking you to keep doing the same thing you were always doing.
1:18:52But with a different device.
1:18:53Right, exactly.
1:18:54And so even though it was, if we look back and think, "Oh my gosh, I had to plug in my
1:18:58phone to sync my calendars.
1:19:00It sounds ridiculous today."
1:19:02It did not sound ridiculous in 2007.
1:19:05And so that's why I think it was okay to not have that feature because you weren't putting
1:19:10a burden on people.
1:19:11You weren't making people's lives more difficult.
1:19:14And I think the same thing applies to the watch. Yes, it would be, you don't need to
1:19:20wait for the watch to have its own cellular stack because people already have their phones
1:19:25with them. You're not saying, "Oh, up to today, you have not been carrying a cellular device
1:19:30in your pocket, but now you need to carry it with you to use the watch." No, people
1:19:34are already doing it. The watch is only making their lives better.
1:19:38And I think I agree with you, and I think it will be shorter than 10 years. In seven
1:19:42say in 2021, we'll look back and say, "Man, I can't believe I carried a phone in my pocket
1:19:49every single hour of every single day." Yeah. Let's go back to the Newton era, like 1993,
1:20:00'94. Most people, very few people had cell phones. The cell phones that were out, it was the famous
1:20:05Wall Street one. It's more like a brick. Let's say Apple comes out with some kind of digital watch
1:20:11in 1993 and the watch does something cool. I don't know. You know, forget the details, but it's, you
1:20:17know, but nobody has a habit of carrying a cell phone at the time. And then they say, oh, and to
1:20:22make this watch work, you have to carry this four or five inch rectangle in your pocket with you
1:20:28everywhere you go. And then everybody be like, well, that that seems stupid. I don't want to
1:20:32carry that, you know, here's a five ounce thing that that is very expensive itself, and you have
1:20:38you have to carry it around with you everywhere you go.
1:20:40You're asking people to do something that is stupid, right?
1:20:43They're never gonna do that.
1:20:45Like you're saying, I completely agree
1:20:47that they can piggyback off the phone now
1:20:49for things like cellular and Wi-Fi connectivity
1:20:54because everybody in, you know, the target audience
1:20:57of people who already carry an iPhone with them
1:20:59everywhere they go is sufficiently large.
1:21:02- Right, and I think it's really interesting too,
1:21:06just kind of a slight segue, I guess,
1:21:09is one thing I haven't done in any of my columns,
1:21:12at least not as explicitly or in the podcast,
1:21:15is like, why, what if we jump forward?
1:21:20Like, how do you think our tech lives
1:21:24will look like in 2020?
1:21:26- I don't know.
1:21:29I'm, you know, but I'm very intrigued
1:21:32that they think this is the way it's gonna go.
1:21:34you know, that it's mostly, you know,
1:21:36that I think that they're predicting
1:21:39that a lot of it is gonna go to the wrist.
1:21:41I think it's gotta be a lot about voice input, you know,
1:21:46we're gonna be talking to our wrist a lot.
1:21:49I mean, I don't see any other way that you're going to,
1:21:52I don't see how they're ever gonna invent anything
1:21:54that would let you type on a piece on something that small.
1:21:57- Well, I think what's interesting though is,
1:22:00Well, first off, if you were to tell someone in 2007 how little we talk on the phone today,
1:22:07they might not believe you. So I think the voice thing in general, as far as communication,
1:22:13will go ways. Do we need Siri for text input then because we text a lot now?
1:22:17I think what's interesting about the phone is if you track everything you do in a day,
1:22:26how much of it are you actually inputting anything?
1:22:29Like how much of it is gathering information
1:22:32or absorbing information as opposed to actually
1:22:36putting something in?
1:22:37And I suspect, at least I tried to observe myself for a day,
1:22:40it was really hard, like it was shocking
1:22:42how many times I pulled my phone out of my pocket.
1:22:45A lot of it is just checking,
1:22:47it's just checking stuff all the time.
1:22:49And all, like that's, it's not just that
1:22:53you could do that on a watch,
1:22:55It's that it's better on a watch and I think the for me the vision is the watch you have something with you all the time
1:23:02and the things that that's with you all the time is
1:23:05is where the radio should be it's where the connection should be and
1:23:08It's where kind of the hub should be and yes. I'm sure we'll still have smartphones
1:23:14I don't think they're going away just like we still have computers
1:23:16but I think it's gonna be more it's gonna be more about the screen and more about
1:23:23And that's why I think the iPhone plus is the future and it's gonna be more dedicated to doing specific tasks as opposed to
1:23:29Being everything the end all the end-all be-all right
1:23:38think that
1:23:40There's a lot of
1:23:42Things that you just never gonna be done on the watch, but that's fine because there's still things that
1:23:46Never is maybe a stronger word, but that you're almost never going to do on your phone
1:23:52Right? Like if you have to write, if you're a graduate student, you have to write a dissertation,
1:23:57you're probably not going to do it on your iPhone, even on an iPhone Plus. Although it's a lot more
1:24:01plausible now than it was before. Well, you're never going to do that on your watch. You're
1:24:05never going to write articles on your watch. You're not going to read articles, you know,
1:24:10like somebody like me or you writes a thousand word essay on the watch or whatever new product
1:24:16comes out in five years. You're not going to read it on your watch. Although you might have it read
1:24:20to you by Siri, you know, that, that, you know, over Bluetooth, but you're not gonna
1:24:25actually read it visually like that. But there's, like you said, there's an awful
1:24:31lot of things that you do read that are, you know, eminently readable and fiddable
1:24:35on a screen that size. Well not just that, but this is where continuity, I think, is
1:24:39particularly interesting. Because if, if the watch is always your first window
1:24:43into stuff, your first encounter with something, if you, if, if it was totally
1:24:48seamless for you to immediately transfer that to a more suitable device and not have to muddle around
1:24:55with syncing and all that sort of stuff. You just flick it over or something and now it's on your
1:24:59iPhone Plus or you want to type something so you put it over on your Mac. Now, I think that's a
1:25:05critical component. Now, a watch being the center makes a lot more sense if transitioning content
1:25:13to more suitable devices is is totally frictionless and totally easy. I'm sure continuity will not be
1:25:19there this year. But what what what state will continuity be in in in five, five years?
1:25:25Yeah, they are they keep using the word personal. And they used it on stage. They
1:25:33reiterate in the website. It says it here Apple Watch. This is from Apple's website,
1:25:36right in the overview. Apple Watch represents a new chapter in the relationship people have
1:25:41with technology. It's the most personal product we've ever made because it's the first one designed
1:25:47to be worn. I do I think that you know that I don't think they use words like that lightly. And
1:25:54I think that they mean it that we're going to have the way that we have I think I at least I do
1:25:59personally I have more affection personal affection to my iPhone than any other product. And more than
1:26:06the iPad, certainly more than the iPad and more even than the Mac, even though I started as a guy
1:26:15who most of it. Ten years ago, I felt like I wrote more about Mac than I did Apple. I never spent a
1:26:22lot of time at during firewall writing about the iPods. I mean, I did, but it was never as much
1:26:27interest to me as the Mac, even as the iPod grew to dwarf the Mac in terms of its financial relevance
1:26:33to the company because it just wasn't what engaged me. Whereas the phone does. Right now I think I
1:26:39write and think more about the phone than I do the Mac, even though I do all my writing and stuff on
1:26:44the Mac and I still love the Mac. But it is there is something about the fact that it's with me all
1:26:49the time. And it's that first, you know, first responder for my attention, hey, I'm bored, give
1:26:55me something to do is the first thing I do that it's it is, it is more personal. And something on
1:27:01on your wrist that you just have to twist your wrist to look at is another step up in
1:27:07being a personal relationship with technology from the phone. And I don't, you know, I think
1:27:13that they are, they're not, that's not, those words aren't empty. I think they really mean
1:27:17it. And I think it's based on their own, you know, usage internally of the thing.
1:27:22And I think it's a reason to think why this will be a very successful category for Apple.
1:27:28because every time technology gets more personal,
1:27:33like laptops are more personal than desktops.
1:27:37And I don't think it's any surprise
1:27:39that Apple's done better in laptops
1:27:41than they ever did in desktops.
1:27:43Tablets are more personal than Macs,
1:27:46and they've done better in tablets
1:27:48than they ever did in PCs.
1:27:51And phones are more personal yet,
1:27:53and that's their most successful product ever.
1:27:55I do think it's totally reasonable.
1:27:57I get where Mark was coming from. I think as far as like a worldwide phenomenon, like the device
1:28:02everybody will have, I think that like, there's still the delta between a watch and a phone,
1:28:11I'm not sure will ever be great enough to make it a universal, like universally it will surpass the
1:28:17phone. But I think for a certain type of customer, again, primarily an Apple customer, you know,
1:28:24as in what I mean is someone who tends to have a higher income, tends to have a higher willingness
1:28:29to pay, tends to be more focused on the experience of using something. And again, I say that in the
1:28:35gentlest way possible, so no email please. It's a very compelling market and one that I think
1:28:42each time you make this stuff be more personal, Apple's addressable,
1:28:47Apple's percentage of the addressable market increases.
1:28:51Yeah, no, I totally agree. And that's a very keen observation on the shift, you know, as the industry shifted from desktop PCs to laptop PCs, it coincides with Apple rising out of the decade long malaise of PC markets here.
1:29:07Oh, for sure. That's, it's a great point. I actually, I just said it, but I didn't quite make the connection either. I mean, the iMac, everyone looks at the iMac, but even then, the iMac was the first computer people were willing to put in the living room.
1:29:20But once it came to actually carrying something around, no, it made a big difference.
1:29:26That's really interesting.
1:29:27Yeah, iMac was just like a stop the bleeding thing and it wasn't a get people who'd never
1:29:34considered a Mac to use a Mac thing, whereas Macbooks were the thing that really did that.
1:29:40I keep coming back on the watch and as my belief that it's a true, in its own way and
1:29:45in ways that we don't fully understand yet because I think they're being, A, they're
1:29:50on it and they don't they can't really talk about it and B I think that they're
1:29:53very deliberately being secretive for the next few months because they don't
1:29:57want to give a competitive leg up to the companies who they think are going to
1:30:02copy it as best they can as quickly as they can so I do think that they are
1:30:07being very cagey about some of the details here but I that's one of the
1:30:12things I'm finding hard to square I'm convinced I don't know nobody at Apple
1:30:15said we're being pretty we're being secretive because we don't want people
1:30:19to copy this. But reading between the lines it is sort of what I was told. Not
1:30:24in so many words but it does seem like it you know in terms of why weren't why
1:30:29wasn't anybody at the event allowed to try a version using the real software.
1:30:35Part of it was that it wasn't ready but in 2007 the iPhone wasn't ready when
1:30:41they announced it. You know some of the apps were just screenshots literally
1:30:45Like I forget which ones but like like the maybe like the stock widget or something or a calculator like
1:30:51but but they let a handful of people like David Pogue and
1:30:54You know probably Walt Mossberg, I'm sure but a few of those guys on you know at January 2007 six months before it came out
1:31:02They got to play with a you know an iPhone
1:31:05They didn't hold anything back, you know
1:31:08And even though some of the apps weren't finished yet and you just tap the app and it showed you a screenshot of what it
1:31:14would look like, that was what it was going to do and what it was going to look like.
1:31:17And the apps they showed on stage were the apps they shipped with.
1:31:20They didn't do that with the watch.
1:31:21And I think it's a secrecy type thing.
1:31:24But I don't know how to square that with what I'm about to say, which is I keep coming back,
1:31:28and I know I told you this offline, I keep going back to the image on Apple's website
1:31:34of the S1.
1:31:36It's on, you go to watch, and I think you go to technology.
1:31:39And you have to scroll down to get to it.
1:31:42you go to the Apple Watch, you go to explore, you hit technology, and you scroll down and
1:31:47they show the S1. And they say, here's what they say about it. An entire computer architecture
1:31:55on a single chip. Massive constraints have a way of inspiring interesting creative solutions.
1:32:00A prime example is the custom designed chip at the heart of Apple Watch. No traditional
1:32:05computer architecture could fit within such a confined space. So we found a way to integrate
1:32:10many subsystems into one remarkably compact module, module, which is then
1:32:16completely encapsulated in resin to protect the electronics from the
1:32:20elements impact and where configuring an entire computer system on a single chip
1:32:26is an industry first and represents a singular feat of engineering and
1:32:29miniaturization. They mentioned it in the event they're promoting it here. They're
1:32:33showing it they're showing a guy you know a man's hand holding this tiny
1:32:38little chip you know I would I know it's an overused frame of reference but a
1:32:44more or less postage stamp size chip but it doesn't look like a chip there's no
1:32:49exposed electronics or transistors or anything like that it is encapsulated
1:32:53and so even though they're being so secretive I feel like that they're
1:32:59bragging about the s1 and and they're showing it and showing that it's it's a
1:33:04module suggests so much about how they're going forward. I think it suggests that the thing is a
1:33:10full computer. It's not meant to be just a peripheral, which I think is what Android Wear
1:33:17is. And we can come back to that. You know, my understanding of my Android Wear is that it's not
1:33:24in no way meant in the long run to be a standalone computing device. It's a permanent risk worn
1:33:30notification terminal for your phone for your Android phone I think that in the
1:33:39way that in 2007 when they when jobs first showed the iPhone and said and it
1:33:45runs OS 10 you know and that there was like a you know that the decades long
1:33:49hey what if Apple made a minute you know stripped down version of Mac OS that
1:33:54could run on a phone wouldn't that be great well they did it and it was like
1:33:57blown away that they were able to have a computer that could run Unix on a phone
1:34:02and with you know OS 10 style graphics and stuff like that fortunately not with
1:34:08bash installed right I I think that they've taken a suit it's a similar jump
1:34:14again in the same you know I keep coming back to this that the iPhone is to the
1:34:18watch what the Mac was to the iPhone I think they've made a similar jump in
1:34:22and like miniaturization and encapsulation with this
1:34:27and that it's roughly, in a way that it can be a computer,
1:34:32it's going to be a computer.
1:34:34And the modularity of it is what I think.
1:34:37I really do think that that's the explanation,
1:34:40and we can get into this when we talk about pricing.
1:34:41That's the explanation for why would somebody
1:34:43spend $10,000 on a gold one when two years it's
1:34:47going to be technically outdated is
1:34:49that I think that you'll be able to take it in for service
1:34:51and have that S1 popped out and replaced with an S3.
1:34:55- Yeah, this is super interesting.
1:34:56Just one moment on that.
1:34:58I think the, if I can go back to the Android Wear point
1:35:02for just a second, and then I think the whole
1:35:05retail experience and the potential upgradeability
1:35:08is super interesting.
1:35:09But I think it's super significant, you highlighted it,
1:35:14they call the S1 a computer.
1:35:16Like they, like this is the fundamental point
1:35:20that has changed where I've changed my thinking and is key
1:35:24is that Apple makes computers.
1:35:26They don't make accessories.
1:35:28The iPod was the exception and this is another computer
1:35:31and it has to be looked at in that light.
1:35:33- Yeah, they're not using a different language.
1:35:35You know, when they call the A7 and A8, all the A line,
1:35:38they call them SOC, systems on a chip.
1:35:40And it's a CPU and RAM and I don't know what else,
1:35:43you know, in one.
1:35:44And it's more on a single chip than in the PC world
1:35:49than we ever saw or have seen.
1:35:51But it's not, you would never call it a full computer
1:35:54on a chip.
1:35:55Like they're calling it a full computer on a chip,
1:35:58which to me makes it sound as though
1:36:00if you replaced it with a different one,
1:36:02you'd still have the same screen.
1:36:04It's almost like turning a watch into like a desktop PC,
1:36:08like where you could replace your PC and keep your monitor.
1:36:11Like you can replace the computer in the watch
1:36:15and keep the gold case and the sapphire display
1:36:20and the crown and all of your bands that you bought
1:36:23and you just get a new computer inside.
1:36:25- I just want, I do want to just acknowledge
1:36:29that I think Android Wear under the covers
1:36:32could be standalone from a technical perspective.
1:36:36I just want, this is so we don't get bad email
1:36:37'cause people, I've actually been looking into this.
1:36:40But I think the design, the design is always meant
1:36:43to be with a smartphone.
1:36:44let's park that because we're talking about the watch. But no, this is so interesting though,
1:36:49because this is the thing that people think shouldn't be possible, right? There's always
1:36:54something that shouldn't be possible, right? And everyone thought that modularity was dead,
1:37:00right? With MacBooks now, you can't change anything on your own. The phone for sure,
1:37:05remember when the phone came out and there was no external battery and people were going nuts about
1:37:09it? Like, oh my God, there's no external battery. And the thinking then was you can never make
1:37:14something small enough if you have the constraint of making stuff modular and being able to be easily
1:37:21removed. But what it, you know, I thought, I thought about, last time we talked, I thought,
1:37:27oh, wouldn't it be interesting if the wearable, if Apple came up and said, oh, it has no screen,
1:37:31right? That would be like, oh my God, just like the phone. Oh, it has no keys. Maybe the, oh my God
1:37:36moment here is it is modular. It's a computer. It can be changed out. We've totally like,
1:37:44We've wept so far ahead here that no, you can't do.
1:37:48I'm sure no individual could do it.
1:37:49But if you bring it into your Apple Watch shop,
1:37:51they'll be happy to do it for 500 bucks or whatever.
1:37:56Yeah. And it maybe it won't even maybe it won't be offered on the sport edition.
1:38:02You know, maybe it's only something for the the stainless steel and gold one.
1:38:06Because why if I say it costs five hundred dollars to upgrade
1:38:12Well, that's probably too much because if the starting price of the watch is $349, you know, well, let's so let's call it
1:38:18$250 just to pick a number that's that's not
1:38:21Painless, it's not pocket change, but it's reasonable if you have a $350
1:38:26Apple watch you're not gonna pay
1:38:29250 to get the s1 replaced with an s2 or an s3
1:38:33When you could just spend 350 again and get a brand new one
1:38:37Which might actually be a little slimmer and smaller and have an updated industrial design
1:38:42But if you spent ten grand on an Apple an Apple watch edition
1:38:46And it's solid gold
1:38:49and
1:38:50It still looks great physically on the outside
1:38:53Because it's unscratched because this display is sapphire and the gold is special hardened gold
1:38:58You've already spent ten grand on it
1:39:02would you spend 250 to get to make it faster and have the battery last longer and
1:39:06Probably you know and again guessing as part of the service. They'll just put a new battery module in
1:39:11You know because yours has already been through 700, you know recharge cycles
1:39:17And that's again in this weird way that they are even though it's truly a computer
1:39:24They're really only comparing it to the existing
1:39:27High-end watch world there is no they never use the word smartwatch never showed anybody else's they're just acting as though
1:39:34Android wear and the stuff Samsung's doing that they're just acting as though that stuff doesn't even exist
1:39:40but in the real
1:39:42You know high-end luxury watch world
1:39:44When you buy a ten thousand dollar watch or a five thousand dollar watch you do you do get it serviced every few years
1:39:51Because as a mechanical device it needs it needs, you know expert attention every couple years just to keep it in perfect working order
1:39:57It's expected, you know, and it's not free. You don't, you don't, you know, you don't get free service on your your Rolex or Omega or whatever brand watch you have. But you know, if you've already bought, bought it for 10 grand, and you want it to last a long time, a $200 service is, you know, something you don't even bat an eyelash.
1:40:15And what's so interesting about this idea, speaking of Accidental Tech Podcasts, they
1:40:23discussed it at the beginning of this.
1:40:25And I think all of them whose opinions I respect greatly were dismissive of the idea.
1:40:32I think John Siracusa put it as being a nerd fantasy.
1:40:36Which in some-
1:40:38It is, he's right.
1:40:39No, it is.
1:40:40And it's like, I think the comparison that he would make would be like the X-Mac, right?
1:40:44Oh, I can't Apple make a desktop computer where I can change the parts and stuff like that, but I think
1:40:49The reason why I I'm I find this so compelling it'd be very clear like
1:40:57All the available information that we have suggests that this isn't possible
1:41:02right that if you are actually making something so small and you want to maximize battery life like the last thing you want to do is
1:41:09Is make any considerations towards towards modularity?
1:41:12that said
1:41:14If you could do this so much about this product comes into queer focus
1:41:21Right the the the gold edition the idea that they're being like imagine a mad just imagine
1:41:28Let's play with this. Let's assume as possible imagine in ten years, right?
1:41:33Oh, you have a first edition, right and it's not a first edition
1:41:38Like I have the first iPod where it's nice that it sits on my desk
1:41:41There's no way in the world actually use it
1:41:43But you have a first edition and you're still wearing it like oh you got one of those back in the day
1:41:47I got so I have a my I have one Swiss watch
1:41:49it's a it's a wedding present from my in-laws like a very traditional sort of wedding present and
1:41:54It's a it's a Mont Blanc
1:41:57It's so they make pens, right?
1:41:59But they got they used to make watches like in the 1800s and then they stopped and they got back into watches
1:42:03I like the first one they made when they came back and like I
1:42:06I feel very proud of that fact that I have their first one when they came back on the market.
1:42:11Imagine if that was a selling point for this watch or there was different editions and different
1:42:21designers and the value of the fashion, the value of the design, if you know it's timeless, used,
1:42:32not making a pun there, but if you know like it's something that is not a throwaway object,
1:42:37that just completely tilts the table when it comes to the importance of fashion, the importance of
1:42:43design, the importance of all this untangible stuff that Apple specializes in. And it's like
1:42:50flipping the old PC market on its head. The way Apple was hurt before is because they couldn't
1:42:54keep up on all the component parts, but now if they were really so far ahead, it actually
1:42:59accentuates their biggest strengths. Yeah, I totally agree. And before we move on, I
1:43:07will say I know from corrections from what I've speculated on Android Wear, that Android
1:43:12Wear devices, they do have gigabytes of local storage. They do have a full app SDK for running
1:43:19standalone apps, but there aren't many apps yet, but I guess they're coming soon. And
1:43:25I think it therefore can at least, if not today,
1:43:29is already as planned, you know, without any kind of,
1:43:32oh, now we're gonna start doing more stuff like Apple,
1:43:34like things like playback of podcasts over Bluetooth
1:43:39or something like that.
1:43:40It seems like it's already planned for that.
1:43:41But to me though, I'm just guessing though,
1:43:44that if you run any kind of like a benchmark or spec
1:43:47on an Android Wear device today
1:43:49versus the first Apple Watch that we see next year,
1:43:53I think we're gonna be blown away by the difference
1:43:55and computing performance that they've put into the watch.
1:43:57- No, and this, I think this is really,
1:43:59this is key, 'cause like, remember Steve Jobs said
1:44:03the iPhone is five years ahead of the competition.
1:44:05And it turned out it actually was five years
1:44:07ahead of the competition.
1:44:08It was around 2012 that,
1:44:10that Android, you know, really caught up.
1:44:14I mean, obviously you and I certainly feel that
1:44:17from an experience standpoint, the iPhone is still ahead.
1:44:19From an app standpoint, I would say they are
1:44:21as far as quality of apps, but from a, you know,
1:44:25- Are they in the same ball park?
1:44:26- Right, exactly, exactly.
1:44:27And-- - It took about five years.
1:44:29- And I think there's, no, I think the S1,
1:44:34like right now it's arguable that Apple's
1:44:36greatest strength right now is chip design,
1:44:38which is pretty amazing.
1:44:40And the S1 is right in their wheelhouse.
1:44:43And this is, actually there's one other point
1:44:44that I, that I think is really interesting.
1:44:47It goes back to Ben Gate, actually.
1:44:48A lot of people are saying about the iPhone,
1:44:52they said it before even Ben Gate happened,
1:44:53like why can't they make it just a little bit thicker
1:44:55and give us more battery life and,
1:44:57or back to the IMAX, why are the IMAX,
1:45:00why are they making them so thin,
1:45:01like it's sitting on your desk?
1:45:03And John Siracusa, who we love,
1:45:07everyone, our listeners all love,
1:45:09but maybe his all-time favorite article that he's written
1:45:12is something like "Don't Stop Thinking About Tomorrow"
1:45:15or something along those lines.
1:45:16And basically he says that when we look back,
1:45:21it seems like there's these breaks, right,
1:45:23we made these big leaps, like we leapt to the iPhone, all this sort of stuff.
1:45:27And he's like, but those leaps don't happen by chance.
1:45:31They happen because there's just constant pushing, constant iteration, constantly figuring
1:45:36things out.
1:45:37And what I think is really compelling about the watch is the reason if Apple has clearly
1:45:44done something very impressive from a technical perspective, if they've even done even more
1:45:49than seems possible and done this sort of modularity sort of approach, the reason they
1:45:53can pull this off is because they've been making phones so thin. What I mean by that
1:45:58is they've been pushing the envelope on things like thinness and on things like efficiency
1:46:02and on things like battery life. And all that pays off when they're capable of making something
1:46:12like the watch that is already way smaller than anything else on the market. We don't
1:46:18know the battery wife, but I have to assume that Apple will, they want to make sure it
1:46:25lasts a full day before they say anything. But that's the net result of all this stuff.
1:46:31That doesn't happen by accident.
1:46:33Right. And I think that it's tough for a lot of people in the tech world, that tech-focused
1:46:42mentality to wrap their heads around this because they've always thought that they still
1:46:45think of Apple as a company that doesn't value performance as a top priority that
1:46:52they you know they're a design company and then you know max you don't get a
1:46:55lot of bang for your buck performance wise with a Mac which hasn't really been
1:47:00true for years but put that aside though that people just underestimate that I
1:47:05just don't think that they they get their heads around this about like you
1:47:08said like just how much Apple as a semiconductor company is leading the
1:47:12the industry in terms of that where they're interested making things smaller and more
1:47:18efficient.
1:47:19And I thought it was so telling that when a non tech ran their initial benchmarks of
1:47:24the new iPhones, that in most of the benchmarks, the iPhone five s is still top five, sometimes
1:47:31third, just only behind the iPhone six and iPhone six plus a year later, you know, in
1:47:37a very competitive industry, I mean, arguably the most competitive industry in all of tech
1:47:42everybody you know you know clawing at each other and considering that the
1:47:49other guys are the ones who who more directly address the spec driven market
1:47:55and that they still don't have phones that compete with the iPhone 5s or that
1:47:59surpass it at least I think that's so super telling about how just how
1:48:06potentially remarkable the s1 could be and who knows maybe we're making fools
1:48:11of ourselves and that the specs of the S of the Apple Watch technically aren't going to
1:48:15be that remarkable compared to app Android wear and other things you know who knows maybe
1:48:20you know we're completely wasting our time and and fantasizing about this but I can't
1:48:26help but think that they would not draw attention to it if it weren't something they were super
1:48:29proud of what not just that but this is this is like this is this should be the gating
1:48:35factor on whether they should wait or not because to want something that is underpowered,
1:48:41that does not enable a platform, would be a mistake because if you start out with, and
1:48:50this is what I so clearly got wrong and why I almost felt an urgency to correct myself,
1:48:58is if you start out with just the mental model that this is an accessory, like the iPod was
1:49:05as an accessory, you're making fundamental,
1:49:10you're putting fundamental constraints on the product
1:49:13that will determine the product's trajectory
1:49:17in the long run, right?
1:49:18It's like Windows 8, right?
1:49:19Windows 8 couldn't fully break away
1:49:22from being a desktop keyboard and mouse
1:49:25and driven sort of thing,
1:49:26and that just handicapped everything else,
1:49:28and that's an extreme example,
1:49:30but if you can't just flip a switch and say,
1:49:33"Oh, software developer, you designed an app for the watch assuming the phone would be
1:49:39there, but now it's not there." That's very hard to overcome. That's going to be a challenge
1:49:45for Android Wear. Android Wear is very explicit right now. You have to have an accompanying
1:49:51smartphone app. That's only possible if the S1 is actually a real computer. That's only
1:49:58possible. And so I presume it is. I think the modularity, if
1:50:02you can replace it is definitely an open question. But man, it
1:50:05would be unbelievably compelling. If it was replaced.
1:50:08Yeah, it's two, I guess it's two different issues. There's the
1:50:10first is just how much is this really a technically impressive
1:50:14computer? I think that's a sure thing. I would I'm going to eat
1:50:18my hat if it's not a blowaway technical device at a computer
1:50:22engineering level. Is the the idea that a year later, two
1:50:26years later, you could take it into the Apple store and get it
1:50:29replaced with an upgraded version it that might be just
1:50:33pure fantasy on my part, even if the gold ones do cost 567 $10,000.
1:50:37Even if they do, it really might be the case that you you you
1:50:42know, you've, okay, thanks for your $5,000. But two years from
1:50:45now, you're going to need to spend another 5000 to get a
1:50:48better one. It might be I would, you know, I don't think that's
1:50:50out of hand. But I do think though, it's way more
1:50:54compelling if if it's not let me do the third sponsor and it would remind me I'm
1:51:00gonna here's the topic that I want to come back to after this is if it is
1:51:05modular in terms of being replaceable would Apple tell us that in January or
1:51:12would they wait a year before they say that so think about that think about
1:51:17that and we'll come back to it but right now I'll thank our third and final
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1:54:25thanks to need. All right, I told you to remember what I what
1:54:29did I want to ask you?
1:54:30If if when they introduce if it is modular, it's modular, will
1:54:35say so right will they tell us absolutely absolutely i mean like i said if it's modular it
1:54:41changes the entire perception and conceptualization of what this of what this is right it goes it
1:54:50changes from being another a very pretty and and cool yet disposable item to being like something
1:55:00meaningful, right? The way a watch is meaningful, like a high-end watch is meaningful.
1:55:06I think it's difficult to overstate what a difference that would make in the way people
1:55:17think about the entire category and the entire watch. By the way, that would just pull the rug
1:55:25out from all the Android Wear devices in just a pretty unbelievable way. I mean, it would
1:55:31very clearly Apple would be setting themselves up as, "We are the Swiss, but with a relatively
1:55:40swatch all the way up to Cartier. And you guys, you're the Casios of the market," or
1:55:49or stuff like that.
1:55:50And no, of course, that would be a central,
1:55:54a key point in my opinion.
1:55:56- Yeah, I think so too.
1:55:58The only reason I could think that they wouldn't
1:56:00is if they're unsure.
1:56:01If it's like that's their hope and that's their plan,
1:56:04but they don't wanna promise it in advance
1:56:06because what if something comes up
1:56:08and the way that they wanna make the S2,
1:56:10it's not socket compatible with the S1.
1:56:17Yeah, well, I think the S2 is already on the drawing board at least. And not just that,
1:56:25but it's the first edition that's going to have the biggest battery life challenges,
1:56:29that's going to have all these sort of things. And like, for example, to make something modular,
1:56:36even if it has to be done by a technician, right? To make anything modular, you're making some sort
1:56:41of trade-off in space in particular. Space is the biggest one by far. And that is such a massive
1:56:48constraint right now that if they're willing to make that trade-off in version one, they're only
1:56:53going to make that trade-off if they're... They're not going to do that for optionality. They're
1:56:57going to do it because they think there's a payoff there. And ways that it would work,
1:57:01if you just think, "Wow, it just sounds so crazy." It just sounds so crazy because Apple's the
1:57:05company that famously got scorched, like you said, for not having a replaceable battery,
1:57:09user replaceable battery.
1:57:11But you can replace your battery.
1:57:13I'll just point out, you've always been able
1:57:14to replace your battery in your phone
1:57:16by taking it into Apple and having a,
1:57:18it's just that you can't pop off the back yourself
1:57:20and put a replacement in.
1:57:21It's not user-swappable throughout the day,
1:57:24but it is certainly modular in terms of if your battery is,
1:57:28if you got a bad battery or an old battery,
1:57:30you can go in and get a new one.
1:57:32But the way that things evolve,
1:57:34the way computers evolve, certainly personal computers,
1:57:37is they get smaller and more efficient.
1:57:40So as the S1 gets smaller and more,
1:57:43or the S series gets smaller and more efficient
1:57:46over the years, there's always gonna be room
1:57:48in your original 2015 Apple Watch
1:57:52for the new smaller S.
1:57:53- Right, exactly, exactly.
1:57:54'Cause the future, like the next version
1:57:57of the physical hardware could be smaller
1:57:59and that's not a problem for the original.
1:58:01'Cause the original, if you presume that
1:58:03this will be the biggest it ever is,
1:58:06which is an exceptionally reasonable position to take.
1:58:09- Right.
1:58:10Certainly the thickest it's ever going to be.
1:58:12- Right.
1:58:13- I mean, 'cause that's certainly one of the knocks
1:58:15against it from a watch person's perspective,
1:58:18specifically called out by Ben Clymer of Hodinkee,
1:58:20that it does sit a little high on your wrist,
1:58:23and therefore, the issue with a watch
1:58:25that's physically thick is it's,
1:58:27your shirt sleeves might get caught on it.
1:58:29And it would leave room, if I'm correct too,
1:58:34that if there is a swappable strategy, you know, an upgradeable strategy that
1:58:38they're going to do the battery along with the S1 because batteries, you know,
1:58:42deteriorate over time and they're expressly one of the few things they're
1:58:46telling us already is that you will need to charge it every day. So it's going to
1:58:50go through a lot of, you know, if you use and like your Apple Watch you're going
1:58:55to go through close to 365 upgrade, you know, battery cycles a year that they'll
1:59:01do that too. But then if the S1 shrinks a little every year, then they can make the
1:59:05battery a little bigger.
1:59:06Well, not just that, but battery technology, unfortunately not fast enough, but it does
1:59:10improve regularly. Just a side note, I think one of the other things that changed my mind
1:59:19about the iWatch that needs to be more, not less, is the reason we... An iPhone was terrible
1:59:27at battery life compared to what was on the market. People couldn't believe, "Are you
1:59:35going to really charge your phone every night?" But people did it because it was so much better.
1:59:42And I think that's another reason to presume that Apple wants the watch to do so much more,
1:59:50that it's so compelling, that you will put up with charging. The way to overcome charging
1:59:55every night is to not to make a watch that lasts for two weeks because that's impossible.
1:59:59The way to overcome it is to make it worth the trouble.
2:00:02Right. Of bringing an extra adapter and everything.
2:00:06Right. So what do you think the retail experience, I mean, especially if there's changing batteries
2:00:11and or changing processors?
2:00:13Well, I think it starts, let's take another step back and hit on another topic from the
2:00:18ATP recently, which was wait a minute, isn't this an apple like like the app and and you
2:00:26know, it was one of Marco's lines and but I've seen this all across the web that the
2:00:32the what we think of is the Apple way to do it is to make one Apple Watch the first year
2:00:38and it would be compelling to everybody men and women. It would be let's you know, let's
2:00:45to split the middle instead of 42 and 38 millimeter, let's call it 40 millimeter, appealing to
2:00:51men and women, possibly even one color and one type of band and that's it.
2:00:58And then maybe over years, it would maybe the product line would grow.
2:01:02And that is, you know, and it would be, you know, an aluminum and glass type thing that
2:01:05sells for 350 bucks, a price that all existing Apple customers can afford.
2:01:13this idea of selling what I think are going to be $1500, $2000 stainless steel ones and
2:01:19$5000, $10,000 gold ones, all of it coming out at once, doesn't that mean that Apple
2:01:25as we know it is over and it's, you know, whether it's for better or for worse, it's
2:01:29different or it doesn't even make sense.
2:01:33And because you know what, the funny thing too is I don't know how many people who listen
2:01:36to the show are going to disagree with us, but at least on Twitter, when I wrote my piece,
2:01:41You know, a week and a half ago, two weeks ago.
2:01:43Man, I mean, a lot of people are like,
2:01:44"Wow, that was really insightful.
2:01:45"You really opened my eyes.
2:01:46"I think you're onto something here."
2:01:47And then there was an awful lot of vitriol.
2:01:50I got more negative feedback on that piece
2:01:52than anything that I've written in a long time.
2:01:55And this is from people who I think usually agree with
2:01:59or like what I have to say about Apple.
2:02:01But there were people who were saying things
2:02:04like if the gold one even costs twice the $350,
2:02:10that they're gonna lose their shit.
2:02:13And I don't think people get,
2:02:16I don't think, what I don't think people get
2:02:18is just how different this is
2:02:21from anything Apple's done before.
2:02:23It's not right, you're doing yourself a disservice
2:02:26if you're thinking about it in the context
2:02:28of how Apple has done things in the past.
2:02:29- I completely agree.
2:02:31What's interesting about, it's funny,
2:02:34I mentioned that my critical of the watch piece
2:02:38was both very popular, it was widely shared,
2:02:40hundreds and hundreds of tweets. My recent piece, the one that you linked ... Well, let's
2:02:47use that one as an example. You've linked to several of my pieces in the past. Usually,
2:02:52they get a lot of views and they're also shared a lot on Twitter. My one this week has gotten
2:02:56a lot of views, but it's hardly gotten shared on Twitter at all. What's interesting is I
2:03:01think it's actually of a piece with the pricing thing. What I mean by that is I think it's
2:03:08why it's been so hard to articulate. I think what Apple's had a hard time articulating
2:03:11is that if we are right that Apple is going for this future that is just wildly more ambitious
2:03:23than anyone I think was originally thinking about. And that might be from a price perspective,
2:03:27it might be from a style perspective, it might be from a performance perspective, it might
2:03:30be from an OS perspective. It's almost like people like, yeah, it just doesn't fit with
2:03:38anyone's model of the way things ought to be. And I think a lot of people just, some
2:03:45people very strongly disagree. I've definitely heard from them. But I think a lot of people
2:03:49just they're not, they don't know what to think. It's just like, what? It's just, I
2:03:54don't know what to think like what's what's going on here. I think the price thing is,
2:03:58very much of a piece with that. I mean, the idea that Apple would sell, from a tech person
2:04:06perspective, an identical device for 10 times or more the price of another identical device
2:04:13just does not compute.
2:04:15Right. In a way that like, and go back to the car analogy, that you know, like Casey
2:04:20made the point of Marco that hey you've got a BMW M5 you know that costs triple
2:04:28what even a regular you know nice car costs and you're still bound by the same
2:04:34speed limits and even if you want to disobey the speed limits you can't go
2:04:37that much faster you know then then the speed limit and you know maintain any
2:04:43kind of you know reasonable safety Marco I believe does not do any kind of
2:04:48recreational auto racing you know which some people do some people do you know
2:04:52go on test tracks and stuff like that you know it's but it still is a better
2:04:59car technically than you know $30,000 accurate or something right it's you
2:05:05know technically engineering wise it's a better car whereas the computer inside
2:05:10the Apple Watch Edition is I believe going to be the exact same computer in
2:05:15in the Apple Watch sport.
2:05:17- Yep, no, and it goes back full circle
2:05:21because what Apple is selling now,
2:05:23and they've always sold this,
2:05:25but it's always been the frosting on the cake, right?
2:05:29But now it is the cake.
2:05:30What they're selling is they're selling the intangibles.
2:05:34They're selling, like gold,
2:05:36the idea of gold being more valuable
2:05:39is a pure human construct, right?
2:05:42There's nothing like right gold doesn't really have any innate applications that meet that
2:05:49the reason gold is more valuable is because we as a human race have decided that gold
2:05:53is more valuable.
2:05:54It's complete its value is almost completely intangible.
2:05:58Right when you're in a museum and you see like an old very old like a sword or a weapon
2:06:04that's made or crafted partly out of gold that's it's certainly not because gold made
2:06:08for a stronger sword.
2:06:09A weaker sword.
2:06:10Yeah, right. It's you're almost if you know, it's a showpiece. It's effectively useless in a real combat
2:06:16But it's you know, it it signifies something else
2:06:20And this is I feel like this this in particular and you nailed it by saying it's it's gonna be culture shock. This is just
2:06:27Completely anathema to the traditional tech
2:06:31mindset and and and the geek mindset that I think is very
2:06:37You know is very focused on
2:06:39Efficiency that's very folk in efficiency in all means not just efficiency in computing but efficiency in using money efficiency
2:06:47And how you live your life?
2:06:49Like I want to have a hack where I can I can get this experience for a tenth of the price than I should otherwise
2:06:55There's something on those lines like Apple like a gold edition watch is the exact opposite direction
2:07:01It's more expensive for the sake of being expensive and I don't mean that in a people have made the analogy that I am rich app
2:07:07no, it's it's not it's not that because the the
2:07:12benefit accruing to the person using that is
2:07:15At a very superficial level. I suppose I can see the analogy but it's again. I think the the
2:07:22Classier has to be the luxury the luxury goods market where?
2:07:27the reality is the rally is
2:07:31Most luxury items are less functional than
2:07:34Then the cheaper alternatives
2:07:37but and famously in the watch world the famously that the
2:07:41Quartz watch a $20 quartz timex keeps better time than a twenty thousand dollars
2:07:48Oh, yeah, my watch is is terrible. Like it's always off
2:07:51and
2:07:54but just because
2:07:56Just because it's not tangible doesn't mean it's not real and and what I mean and it's not real and it's not real in a
2:08:04like
2:08:05marketing artificial sense like it's people actually care about this and they've cared about it for for
2:08:11Thousands millions of years like this isn't a fluke that people value that people value by
2:08:19I'm being very expressive right now
2:08:22My wife just looked in the window because I look out on the porch and I just totally lost my train of thought
2:08:26But it's very, people care about this stuff in a very real way.
2:08:32They've cared about for millions of years.
2:08:34It's not a fluke.
2:08:35And what Apple's tapping into is a real thing.
2:08:39I think, and I'm trying to think about the other I's and T's I want to cross here.
2:08:44One of the things I want to talk about, and just sort of pure tangent, but Wi-Fi.
2:08:49The Apple Watch does have some sort of Wi-Fi, but they call it, Apple calls it that it has
2:08:54Wi-Fi and Bluetooth.
2:08:55I'm not quoting here, but it's to stay in touch with your iPhone
2:08:59So I think what they're saying and I asked and could not get a an actual straight answer
2:09:05But the insinuation was that it's like the back channel Wi-Fi whatever you want to call it ad hoc Wi-Fi
2:09:10Where it uses Wi-Fi like the way that you can do things now like
2:09:15Pairing a keyboard with you know
2:09:18Your Apple TV and stuff that you can do these things without getting it on the network first
2:09:23Or the way airdrop works right that you can airdrop things to people over Wi-Fi without being on the same Wi-Fi network, right?
2:09:30They go the negotiation happens over Bluetooth, but then it uses Wi-Fi
2:09:33Yeah
2:09:34I think that's the Wi-Fi that it has like it's not that you could go out without your phone
2:09:41Go to Starbucks and get on Wi-Fi and have iMessages show up and get your email to show up
2:09:47I don't think but they didn't there they haven't expressly ruled that out
2:09:51So I have to we have to file it in the big pile of I don't knows
2:09:55But the strong hint that I got was that it doesn't have like true
2:09:59Independent Wi-Fi like go get on a Wi-Fi network without outside tethering range to your iPhone
2:10:05It's a way to use Wi-Fi to extend the tethering range to your iPhone. Yeah, I believe which size makes sense. I mean if if
2:10:12That that sounds really like a user interface disaster to have to like join random Wi-Fi networks
2:10:20And if like it's almost like simpler to just say it works with your iPhone
2:10:26And then once once you can do it all do it all right. It's like right resolution independence, right?
2:10:32I do think though that that's how the product will evolve though is that before it gets cellular it would I mean absolutely
2:10:39It makes sense to have Wi-Fi first
2:10:41It's consumes
2:10:42You know less battery just like the way the iPod touch as a Wi-Fi only device has always been thinner than the iPhone
2:10:48It still is even today the two-year-old iPod touch design is thinner than even the iPhone 6
2:10:54Because it's you know, there's less stuff you have to put in there to just do Wi-Fi
2:10:59so I think it would make sense for a future version of Apple watch to have I
2:11:04Don't know what to call it real Wi-Fi support where you can use it as an independent device anywhere
2:11:09You have Wi-Fi before it even gets cellular networking, but I don't think it's gonna be there this year
2:11:14That's interesting, but it would be a nice surprise. It would be a nice surprise
2:11:17Maybe maybe that maybe they're waiting to see what where they can get battery life to
2:11:20like if if the battery life ends up being sufficient to enable it they will and
2:11:25If it if like that's a that's a big potential area if they're like what they just can't get the battery to be good enough
2:11:31Well, we'll cut this and then that gives us an extra hour or two hours. Yeah a repeated strain of criticism of my
2:11:37Assumption I bank on it that
2:11:41349 means Apple sport and it's aluminum and what they call it. What are they called ion x-glass?
2:11:47It's a glass display and an aluminum case. So in other words, it's like iPod
2:11:53iPhone build quality and materials that's
2:11:56349 stainless steel is going to be more expensive because the stainless steel just plain Apple watch is
2:12:02In addition to being stainless steel. It's sapphire display
2:12:06and stainless steel is not that expensive a material but
2:12:11it's you know if you look at what stainless steel high-end watches cost
2:12:15they cost you know four digits not three digits usually or and if they do cost
2:12:19three digits they're lesser brands and they're close to $1,000 and the gold one
2:12:25I'm telling you is gonna be a lot of money but a lot of people said well no
2:12:28no no I you know Apple watch is the one that just is called Apple watch that's
2:12:34the one that's got to be 349 because it's just called Apple watch Apple sport
2:12:38Must be a little bit more expensive or something like it's optimized for working out or something like that
2:12:43And it's made of aluminum to be lighter weight
2:12:45and
2:12:47That only the gold ones gonna be more expensive and that if you look at the way they put them on the page
2:12:51They put Apple watch first then Apple sport or Apple watch sport and then Apple watch edition
2:12:58What sense would it make to arrange them like that?
2:13:00I think these people are just the people who think that are just you're just looking at this all wrong
2:13:07I don't think it's a coincidence that Apple watched the stainless steel one, which I think is probably gonna cost like maybe like $9.99
2:13:14I don't think it's a coincidence at its first
2:13:17I think Apple might honestly think it might be the best-selling one
2:13:21That the low-end one may not be the best-selling in the same way that the iPhone 5c
2:13:27Did not outsell the 5s last year
2:13:30it's
2:13:32That's that's a that's a great analogy to the to the S&C and I think
2:13:36which one sells more will come back to the modularity question.
2:13:41I know that would certainly change the product that I would buy.
2:13:46Just because as much as I like to talk about these intangible aspects and things about Apple,
2:13:54I'm enough of a geek that I'm not going to spend a few thousand dollars on a device that's going to be obsolete in two years.
2:14:02Yeah, you know, but I definitely think, though, that people are just there.
2:14:07They just cannot wrap their heads around the fact that the default model is not going to
2:14:11be the low end.
2:14:12No.
2:14:13And again, I think the phone is the way to look at that.
2:14:14The default iPhone, the one that they expect most people to buy is the iPhone 6.
2:14:19No, for sure.
2:14:20And this gets back to why even I mean, obviously, I harp on this a lot, but you can't understand,
2:14:28in my opinion. You cannot understand product development at Apple without thinking very
2:14:34strongly about the Asian market in general and the Chinese market in particular.
2:14:40So there's that term, let's throw it out there, Veblen, good?
2:14:43Yeah, some people just drive them up the wall because they're like it's not really a real
2:14:46construct. I get what they're saying. Basically the idea is when you, in general, the demand
2:14:53curve works that the cheaper something is, the more it sells. And I think in general
2:14:58that that's true for everything, right? If an iPhone were cheaper, it would sell more.
2:15:04But the idea of a Veblen good is that it's a product for which the more expensive it
2:15:10is, the more desirable it becomes. And this idea certainly, this is the case for some
2:15:19luxury goods. I mean, I think where the confusion is, it doesn't necessarily mean they sell
2:15:23more, right? A Hermes bag sells, they sell fewer bags than Louis Vuitton, but they are
2:15:30way more desirable and they're way more a signifier of status.
2:15:35And they wouldn't be as desirable if they were priced exactly the same as a Louis Vuitton.
2:15:40They would not become more popular.
2:15:42And so there are brands, I think Coach is something like this, where they've vastly
2:15:49increase their sales. They've made a lot of money. Coach has the whole Coach retail or
2:15:52a, what's the word, Coach Outlet. It's a different design. All designs are different than actual
2:16:01Coach stores, but they actually make most of their money there and they sell way more.
2:16:05There's lines out there building all the time. But it has absolutely, at least in my estimation,
2:16:12my observation, and again, this is where I was grumpy, my wife distracted me before,
2:16:17but this is where I owe her a lot.
2:16:19It's changed what coach means as a brand.
2:16:22It's become a lot less meaningful,
2:16:25a lot less of a signifier of anything, you know, of status.
2:16:30- It's like a mid-class brand instead of a upper class.
2:16:35- Absolutely.
2:16:35- Not class for people,
2:16:37but just where they are competitively with their,
2:16:39you know, that they're, it's above, you know,
2:16:42it's more in line with like Michael Kors
2:16:44or something like that. - Right, exactly.
2:16:45when I think 10, 15 years ago, it was more on, you know, still the lower end of luxury,
2:16:53but now it's borderline luxury at all. And that's fine. It's worked out well for them
2:17:00as I understand it. I think they're doing pretty well. Although I think over the long
2:17:04run, I think they may be tapering off a bit now. But no, in China and in stuff like this,
2:17:12And this is like, it's gotten a lot better,
2:17:14but especially even a year ago,
2:17:16the analysis of the iPhone in China
2:17:18was just so wildly off base, right?
2:17:20Like people, when they had 5C came out,
2:17:22there was all these articles saying,
2:17:24"Oh, a 5C is equivalent to the average monthly wage
2:17:27in China."
2:17:28That's a completely meaningless statistic.
2:17:31It means absolutely nothing
2:17:32because there's so much inequality, right?
2:17:34And there's so many people that by definition,
2:17:36there's a lot of people that make way more
2:17:38than the average monthly salary.
2:17:41And the iPhone is selling to those people,
2:17:45and not just that, but in that culture.
2:17:49And it's the same thing here in Taiwan,
2:17:51which is obviously, you know, it's Chinese,
2:17:52but I think a lot of Chinese influenced cultures,
2:17:54the idea of displaying wealth
2:17:57is much more socially acceptable
2:18:00than it is in the West, right?
2:18:02To like, Mark, go back to ATP,
2:18:04like we owe them for this episode,
2:18:05but Marco talked about how he would judge someone
2:18:08that walked in with the gold phone,
2:18:10James on my on the podcast with me said the same thing. That's the exact. Yeah, Marco's example was
2:18:15do you think that next year at WWDC that we will go out for beers at the House of Shields or
2:18:20something and is anybody in our indie crowd going to be wearing a gold Apple watch and he said I'd
2:18:25be embarrassed if I had right exactly and which is a reasonable it's totally a reasonable thing to
2:18:30say and I know exactly what he's talking about but I think I think he's wrong I think there will be
2:18:35people wearing them and but I also think though that it would be something that
2:18:39it it might carry a twinge of embarrassment in some contexts whereas
2:18:44you're saying like in Asia it would not you know that there is it's there's I
2:18:48you know can't put it better than you did that it's different I wouldn't be
2:18:52surprised if we see it again Apple probably wouldn't break this down but
2:19:00maybe they would but like an incredible disparity in the breakdown of
2:19:04You know, I go almost like an inversion, you know, just totally different chart of how many of which model are selling
2:19:13Apple watch
2:19:16Being off the charts different in Asia than in the West. Yeah, well, I would imagine just the color of iPhones, right?
2:19:23It is almost impossible to see an iPhone 5c or 5s
2:19:27Here in Taiwan. That's not gold
2:19:30Like if you see 10 iPhone 5S's, nine of them are gold.
2:19:35- And that's truly cosmetic 'cause it's not gold gold,
2:19:41it's gold colored aluminum.
2:19:42- Right, but that's, and again,
2:19:44so I guess it's not a perfect signifier,
2:19:45but the idea of like gold especially is very meaningful.
2:19:50It's a very, like there's all this stuff about,
2:19:54it's weird, like the relationships with the Chinese
2:19:57with money is very, very different than the West.
2:19:59In the West, especially in America, there's this kind of Puritanist, like, you ought to
2:20:04be humble and hide your wealth and things like that.
2:20:09Not at all the case here.
2:20:10Like, money and the idea of money is everywhere.
2:20:12Gifts are money.
2:20:13Like, the idea of giving presents is different.
2:20:16You give money.
2:20:17When you go to a wedding, for example, you bring an envelope, you give it to them, they
2:20:22have someone sitting at the door, they pull out the money, they count it, and they write
2:20:25it down.
2:20:26there's a list of how much everyone made and it's like it's there just do it right there like it's
2:20:31It's it's not it's not weird, right?
2:20:33You have chinese new year and you eat these dumplings that are meant to look like money like old kind of money
2:20:39so the idea is you can make more money in the next year like just
2:20:42It sounds I know it sounds totally bizarre to people in the west to have this like fixation with money
2:20:49But it's not it's not weird here. It's just like that's
2:20:53Just it is the way it is.
2:20:55And and the iPhone absolutely fits into this where people absolutely,
2:20:59without a question, cannot be disputed, will buy an iPhone simply because it's
2:21:06the most expensive and it shows that you can afford an iPhone.
2:21:09And without a doubt, the gold watch will fit in here, even if it is disposable,
2:21:14even if it can't be replaced.
2:21:16People will buy a five thousand dollar gold watch because it's a five.
2:21:20it's a gold watch and even more so it's on your wrist all the
2:21:25time. People will see it all the time. And that's okay. It's not
2:21:30frowned upon by any means. It's something everyone aspires to.
2:21:35Right. There's two types of, in broad strokes, two types of
2:21:39people who buy an expensive watch. There's a type of person
2:21:43who buys one and selects one, probably a Rolex because Rolex
2:21:47is the by far the preeminent brand but and selects not just any Rolex but one
2:21:51that is gaudium you know maybe diamonds around the bezel or something like that
2:21:55because they want people to see that they're wearing a diamond bezel Rolex
2:22:01and then there's the type who might spend even more like $85,000 on a watch
2:22:06I just saw one on the Houdini that was 85 grand but that it's like a watch guys
2:22:11watch and nobody no typical person would even notice that it's anything except
2:22:16other watch people. And it's, you know, maybe in a course of a
2:22:21week, only one person who would see you wearing that watch would
2:22:24know what it is. But that to that that person knows exactly
2:22:26what it is. And it's like a like being in a secret society.
2:22:29Right. And I think that and so I think the gold Apple Watch is
2:22:32that's not the second the cold Apple Watch is the first but it
2:22:36is I've I bought the gold app, but it would be the second if
2:22:39we're modular. That's what's so interesting about it. Right.
2:22:41Well, I think the stainless steel is sort of that though,
2:22:45The stainless steel is because it's stainless steel and a couple people pointed this out. I it's hard to see online
2:22:49It's the sort of thing that does not photograph. Well, Joe jewelry and never photographs well
2:22:54But the stainless steel is polished and it is shiny I can vouch for that having seen it and tried one on
2:23:01And the aluminum Apple sports watch is more like it's I don't know if it is brushed aluminum or whatever the sandblasted thing
2:23:10Whatever they do, you know like to the brand new iPhone 6, you know
2:23:14It's it's not a polished shiny material. It's you know, it's it's matte but at a glance
2:23:19It would be very difficult to see whether somebody is wearing a stainless steel one or the aluminum one and the bands are
2:23:25To answer a very common question the bands are interchangeable between all of them
2:23:30now 38 and 42 millimeters take different size bands, but if you buy a
2:23:36Stainless steel Apple watch you could buy you you know
2:23:39You can fit any of the other bands on it that are meant for the larger size
2:23:43Right. I think that's the band thing. Are they going to come with like, it seems to
2:23:51just on the site that the aluminum watches will be available with a certain set of bands
2:23:56and the stainless steel ones will be available with a different set. And I get you can change
2:23:59them after the fact, but when you buy it upfront, are your options limited?
2:24:05I don't know. I don't think they've answered that yet. And that gets into the retail thing.
2:24:08We're pushing on the two and a half hour mark here. So it kind of like this is hurry, but I
2:24:13Do think that the retail question is fascinating in terms of how are you going?
2:24:18How what are your configuration options going to be and how are they gonna set that up in the store?
2:24:22And I said it right away. I said right away. I thought man
2:24:25This is why Angela aren't why a why they hired her and be why she took the job because it's it, you know that there's a clear
2:24:32enormous challenge ahead to turn the Apple stores as we know them into
2:24:36to a place where you would buy stuff like this and then how much are they going to keep in stock?
2:24:42We are going to be able to buy the gold one in an Apple store. Are they going to sell them
2:24:46at places like tour know, you know, places that that sell, you know, a variety of, you know,
2:24:52like tour know is a reseller of wristwatches, but you can buy different brands. It's not just
2:25:00just Rolex or just omega or whatever they you know, would there be like an Apple kiosk in a
2:25:05or no where you buy the edition. Well here's what's interesting is it was rumored
2:25:09before the event that Apple was in negotiation was talking with Nordstrom about the Apple Pay
2:25:17thing but Nordstrom wasn't up on the screen when they talked about it. They talked about
2:25:22several other retailers but not Nordstrom. Nordstrom actually makes a lot of sense for
2:25:29a gold watch. Nordstrom plays, they don't play in the very high end but they play in the medium
2:25:34and of especially when it comes to bags and stuff like that in luxury they sell
2:25:40luxury goods they don't sell the crazy expensive luxury goods they sell kind of
2:25:44mid-range luxury and I wonder right they don't have the $85,000 watch but they
2:25:48might have easily could have a $5,000 right exactly and I think that's that I
2:25:53wonder if you know I think you linked to or I linked to the the the Robert X
2:25:59Kringle and I know I know he's a controversial figure but I thought this
2:26:03particular column was very interesting where he surmised that the gold would mostly be
2:26:08at jewelers and would...
2:26:09Yeah, I think he's back on his good meds or something. I thought so.
2:26:13Yeah, I got some flack for even looking to him at all. But the other thing too is this
2:26:18is an advantage. I suspect Apple did want to be there by the holidays just because who
2:26:22wouldn't? But I think this is an advantage to being in the spring where you can't really
2:26:26rework the stores and then run up to the holidays, right? It's just a mad house in there. Whereas
2:26:31in the spring there's a lot more latitude to move stuff around.
2:26:36I don't even think they came close. At whatever point where they thought maybe they would launch
2:26:40in time for holiday 2014, that was a long time ago, maybe even a year ago. I would be shocked if
2:26:45even at the beginning of this year there was any hope that they would do it. Honestly, just think
2:26:51about when did Angela Arndt come on board? I don't think she came on board full-time until June or
2:26:55May or something like that. Oh, that reminds me of one thing about the retail thing. The most
2:27:01interesting. I think we talked about this on the last time I was on the show, but one of the most
2:27:05interesting hires they made was the LVMH guy. And what was interesting about it was that he wasn't a
2:27:09product guy. He was a channel guy. And by channel, I mean like where your products are sold. So he
2:27:15helped negotiate like for Tag Heuer, like where Tag Heuer watches were sold, which meant he had
2:27:22lots of relationships with places like Nordstrom, with department stores. So here in Asia, like it's
2:27:28It's all department stores.
2:27:29Like there are no malls per se.
2:27:30They're department stores where it's one entity,
2:27:33but within there's like sub shops basically.
2:27:36And all of these have luxury goods
2:27:38and they have boutiques and stuff like that
2:27:40within the thing.
2:27:42And there's definitely a,
2:27:44it's a different sort of retail environment
2:27:46than anyone at Apple would have had experience
2:27:49with previously.
2:27:51- LVMH for those who don't know is the Louis Vuitton
2:27:55- Moet.
2:27:56- Parent company.
2:27:57- Moet, Tennessee.
2:27:57Yeah, Moet Champagne, right?
2:28:00And then Hennessy Cognac.
2:28:02But they have a whole portfolio of stuff.
2:28:05I think they have Dior, they have a whole,
2:28:07they have a ton of brands.
2:28:09Super interesting company actually.
2:28:12But that hire was interesting because of the channel angle.
2:28:17Right, all of his experience points to the thing,
2:28:23I can't imagine, I mean, anybody can always change
2:28:26Course careers, you know change careers course and do something different
2:28:30But if he's gonna do anything based on what he did at LVMH
2:28:33It would be getting the Apple watch into other retailers, right? And and this sort of retailers that would sell tag you or watches
2:28:40And tag he or is not selling three or with the places that are selling tag
2:28:46You or watches are not selling swatches like three or three hundred dollar watches
2:28:50So a few more points one. I wanted to hit I think the last one from ATP follow-up, but
2:28:55John Sirkusa I think he said you know in terms of quantity clearly that the
2:29:04sport edition is is going to outsell the the gold edition I keep calling him
2:29:08edition and they call the Apple calls them collections to avoid calling it the
2:29:12Apple edition so so the Apple sport collection is going to outsell the Apple
2:29:17edition collection in terms of quantity but I am not entirely sure at all that
2:29:23in terms and this is in contrast to his take I don't know that Apple edition
2:29:30collection might be the one that makes the most revenue well the most I think
2:29:34it it'll be so yeah profit and revenue that it you know that they're going to
2:29:40it is not just even if it's I think it's gonna sell more than 1% of the unit but
2:29:47even if it only sells two three four percent I think it's gonna be so
2:29:49expensive that it will easily be 10 or 20 times more profitable than the $349 one.
2:30:00Even if it only sells 5% of the units worldwide, that's 50% of the revenue.
2:30:08No, for sure. The other thing too is, this is another reason to presume that Apple is being
2:30:13more ambitious than less when it comes to the functionality of the watch. Because if it turns
2:30:19out to be a watch that you want to wear every day, you're almost certainly going to buy additional
2:30:24bands, right? And some of those bands are not going to be cheap. And especially if you're
2:30:30buying a gold edition and you actually use it and it becomes a regular part of your life,
2:30:37you're going to want to have different bands to make it fit in different occasions.
2:30:42And what's so Apple about this?
2:30:45And you nailed this in a wink yesterday.
2:30:49But you winked an article where I think Amir Ferdy said they
2:30:52don't want to cannibalize phones.
2:30:54No.
2:30:54Not only is it key to Apple's longevity and success that
2:31:00they are willing to cannibalize their own products,
2:31:02what's so brilliant about Apple is they have always
2:31:04cannibalized their products with more profitable products.
2:31:08And an iPad has better margins than a Mac.
2:31:12An iPhone not only has better margins than an iPod, it's also way more expensive.
2:31:17So they're getting more on the top and bottom line.
2:31:20Like if you're going to cannibalize your products, wouldn't it be great if you could do
2:31:23with an even more expensive object?
2:31:24And if you're talking about having a watch that is the center of your existence in five,
2:31:32six years from now. And oh, by the way, you paid $2,000 or $5,000 for it, plus a bunch
2:31:39of like $500 accessories. Apple is pretty okay with you using your iPhone just a little
2:31:45bit less than you did before.
2:31:47Yeah, one of the things that I'm in terms like you said, are you how customizable is
2:31:52it going to be when you buy it? I presume if you order it online, it's going to be completely
2:31:57Customizable you get whatever band whichever one you want. I don't know
2:32:01but if you go in and they only have a couple of
2:32:04presets set up that you've you know pick from these to start with and if you want to buy a second band by a second band
2:32:09one of the things that's interesting to me and I don't know how it's gonna work out is that have you noticed that the
2:32:14The side of the digital crown like the part if you were gonna press it in the digital crown is colored
2:32:23To match the band like when I saw one like the smaller size with the red like a rich maroon band
2:32:31The button wasn't black. It was maroon and match right but only not on all the additions so sport for example
2:32:37They're all the same. I think that's on the
2:32:39Edition edition it's it on it. Yeah the edition edition
2:32:44so that says to me that they're going to be
2:32:50That they're going to be matched
2:32:53Yeah sold as a unit with a band and you can buy another band
2:32:56But then like if you buy like a white band, you're still gonna have the red button on the on the side
2:33:01Who knows but I did think that was interesting and it jumped out at me and I don't I don't know
2:33:07Yeah, I'm just I'm looking through this. I definitely only the edition that has different colors the stainless steel is all black
2:33:16And the sport is always just aluminum. So that's another kind of signifier of which of which one you bought
2:33:22right, I
2:33:25Did notice I saw Johnny I've at the event and he was wearing the edition edition, but he had it on a sport band
2:33:35I couldn't tell I saw him on stage and I also saw him walking by I saw Tim Cook walking by
2:33:45He was either wearing the the stainless steel one or the sport one again
2:33:50Like I said at a glance, you know and while he's walking into motion
2:33:53It was too hard to see how shiny it was
2:33:55but he also was wearing the sport band which I thought was kind of interesting that they
2:33:59They both wore the sport band even with the one that I think is gonna be multiple thousands of dollars
2:34:05That is interesting
2:34:07I mean you think that they would have at least a prototype in the lap that they could wear even if they weren't you know
2:34:12widely available
2:34:13All right. Well, no, they're do they had the bands, you know there for us to in the press to try
2:34:18You know, we could try on all the bands
2:34:20You know, but the ones that they're wearing is like they're their actual daily use as they you know test the things
2:34:26at least at the event they you know wore the
2:34:29Everyman's watch, you know the band
2:34:32All right. Last question. I have no watch and I think this is one
2:34:36I haven't seen anybody talk about but I thought it'd be I thought it's pretty interesting. Where do you think they're going to assemble them?
2:34:42Yeah, I've gotten this question - I I
2:34:44It I think it depends on the mod I want to say I don't know it's because especially Apple watch sport
2:34:53Sport I believe will be assembled in China at Foxconn or similar type place. I don't know that you can sell a
2:35:01$10,000 watch that is assembled in China. I
2:35:05Think in the same way that went in my article
2:35:07I said like one reason I think I called it Apple watch instead of I watch is I watch sounds like a cutesy thing
2:35:12that costs 350 bucks does not sound like something a piece of jewelry you spend
2:35:16$10,000 on assembled in China does not compute to me for a five thousand ten
2:35:23thousand dollar product that and with and it's a big and for all their
2:35:28comparisons to the watch world that's a big deal where watches are made you know
2:35:32Swiss made is is the gold standard for you know it's just like a sign of
2:35:40of quality. It's a badge of honor for the whole country in Switzerland.
2:35:45And they've certainly obviously been making efforts in this regard. And especially if they're...
2:35:52I mean, how many pieces... The more that... Especially with this chip, right? Because a lot
2:36:02of the manual labor when it comes to building a computer is still on the motherboard. And it's
2:36:10still like, like a lot of a lot of it's like, is done by hand
2:36:13because it requires very precise, you know, sort of
2:36:16imitation. And there's been, there's been reports, you just
2:36:20do a search on Google about like tour of a motherboard factory. I
2:36:22think AnandTech has done has done some of these before. Like,
2:36:26it's very, very manual. And that's where the payoff for
2:36:29having a lower cost labor force pays off in this sort of stuff.
2:36:33If you're building a the entire computer on a chip that's, you
2:36:37know, completely wrapped up in resin. That's, by definition, the computer is
2:36:43being built entirely by a machine. And it doesn't really matter where you run a
2:36:48machine. It's going to cost, you know, obviously, the operator costs will vary.
2:36:54But the sort of person that could operate that sort of machine is gonna be
2:36:57almost expensive in China as they are in the United States.
2:37:03Right, and I could either see that this is going to be a huge shift, you know, that the
2:37:09Mac Pro is just the beginning, but that maybe they'll be assembled in the US. And I don't
2:37:15know, and at the very least, I wouldn't be surprised if the edition is assembled in the
2:37:20US. Because again, if you're going to sell it for $10,000, they can afford, you know,
2:37:27the difference in hourly wage for the people doing the actual assembly.
2:37:33So do you think, and it adds to the entire, like that's an intangible factor, right, which
2:37:37I think you're driving at.
2:37:39It means something to have that made in USA label, even to people who aren't in the US,
2:37:48right?
2:37:49Yeah, you made it the point to the watch thing.
2:37:51I guess my question for you is, who is Apple targeting?
2:37:54Are they targeting people who don't wear watches but do carry iPhones, or do you think they
2:37:59they are very much targeting people who wear watches today.
2:38:02I think that they are I don't think they would have invited I
2:38:06think it's both though. I think that they they see it as an
2:38:08opportunity see people who don't wear watches as as I think it's
2:38:12both it's you know, hey, that you if you don't wear a watch
2:38:16day, your wrist is already open. So we don't have to convince you
2:38:19to switch watches. We just have to convince you to buy one your
2:38:21wrist is already there waiting for it. And I think they're
2:38:25absolutely courting people who already wear watches.
2:38:29I don't think there's any other explanation
2:38:30for the time they spent in the event
2:38:32talking about the iWatch's accuracy,
2:38:34which is baffling to me at first,
2:38:36because of course it's accurate.
2:38:39All computers with a clock are incredibly accurate
2:38:42compared to mechanical watches.
2:38:45My iPhone doesn't lose time.
2:38:49I mean, this stuff about 50 millisecond precision
2:38:54is a little crazy, but I think it's somehow trying to set it up
2:38:58as a watch as a watch guys watch. Yeah, but I mean, the
2:39:00watch guy doesn't have a watch because it's accurate that that
2:39:04I'm still confused. I know. Um, I
2:39:07yeah, I don't know. I'm still not sure who that was for.
2:39:10Well, I think they were trying to land the idea that this is a
2:39:14watch. Like there is that is a reason to buy a reason to buy it
2:39:18is because it's now that I think about it. It wasn't actually I
2:39:21guess it wasn't for watch people. It was for the lay
2:39:25person's expectation for what a watch person would. Yeah,
2:39:28exactly. They weren't actually speaking directly to watch
2:39:30people they were expect they're talking to like the writers in
2:39:34the audience who don't know the watch world but their
2:39:36imagination of it is that it's you know, of course, act time
2:39:40time accuracy is important.
2:39:42No, I think to me, I really think the most like this
2:39:47question of modularity is absolutely, is unbelievably fascinating and I think will completely change,
2:39:55if it's true, would completely change the entire expectation and idea of what this watch
2:40:00is. Because if it's not modular, if it's just a consumer electronics device, disposable
2:40:08consumer electronics device, I don't think they are really targeting watch people. Because
2:40:15people don't buy watches. They buy watches for very specific reasons that would not be addressed
2:40:22by an Apple Watch. And in this case, the edition version, the gold version, really is just all
2:40:26about skimming off money from people who are willing to throw it at Apple in Asia. And which
2:40:31is, I guess that's fine. There's a fine reason to do that. It's kind of a unsatisfying response.
2:40:39on the other hand, if it is modular and when you buy an edition, you're buying something that
2:40:45Apple is saying will be good for at least 10 years or maybe ideally a lifetime. Now, you actually are
2:40:52very much targeting people who value watches for their intrinsic like because you're targeting
2:41:01watch guys and and I think it's about cutting off future watch guys from
2:41:07becoming watch guys and women watch people that that it's you know for young
2:41:12people who've never worn one and as they get more money and they become more
2:41:15successful and they can afford more expensive things that they're not even
2:41:17going to consider a traditional watch because they can go this route and
2:41:21they've already gotten in the habit of wearing one from the sport edition they
2:41:24bought when they were you know in the 350 well not just that but the reason
2:41:29to know I completely agree. What I think just occurs to me is a reason why Apple might want
2:41:35to do the modular thing is just speaking for myself. If it's if it's a throwaway, I'll
2:41:40buy the sport. If it's modular, I'll buy the stainless steel. Like it's like it's pretty
2:41:46obvious and I suspect that thinking it's not just that they'll appeal to watch guys, but
2:41:52I think their ability to to lever people up to a higher margin product will be drastically
2:41:58enhanced but if they were able to to pull that off. And it would explain why
2:42:03that's at the the mid-price tier is the one that's being shown you know
2:42:08established as the regular tier. The one that just has the plan.
2:42:13This removes all these I think this makes all these questions that people
2:42:17are objecting to with the watch of the why much less objectionable because now
2:42:22Now it's not just that Apple is selling a throwaway device.
2:42:29The question of why would you spend money on this is very much tied into the question
2:42:33of why would I spend money on a product that is going to be worthless in two years.
2:42:38That question changes very fundamentally if you know you're buying something that has
2:42:43longevity.
2:42:44The sort of thing like it tells time.
2:42:47And just has a disposable component.
2:42:50enough to just be a watch then if you know it lasts a long time it's enough to
2:42:54just be a health tracker when you know it lasts a long time I don't understand
2:42:58I don't not fully aware of the laws surrounding how and when things need to
2:43:03be said where they're made it's my understanding though that like it's you
2:43:08have to you have to like things that are made in China have to say made in China
2:43:12and went to be sold in the US and around the world it's not you know Apple
2:43:16doesn't necessarily choose to print designed by Apple in California
2:43:21assembled in China on all these devices like that's there's a legal obligation
2:43:25there the Apple watch that they've shown has no printed indication of where
2:43:30they're made there's nothing and if you look at the case back where they have
2:43:33all this nice type stamped into it doesn't say that most watches say it on
2:43:38the dial at the bottom of the dial it'll say made in Japan or Swiss made Japanese
2:43:44movement I can they do that in software I don't know and and if it's modular can
2:43:51they have the s1 made in Japan and a Foxconn factory sealed up and shipped to
2:44:00the u.s. and have the have it put into the watch over here what would what what
2:44:06what does that mean does that if you know how much of it if the whole s1 was
2:44:11manufactured in China. Can they still say that the watch is assembled in the US
2:44:15because the sapphire and the band and the battery and everything was snapped
2:44:20into place by someone in Texas? Yes, the answer is yes. The iPhone says "Made in China"
2:44:25but actually the value of the iPhone, Taiwan and Korea especially, make way
2:44:31more money off of every iPhone than China does. The "Made in China" applies to
2:44:36just the final assembly and so they could assemble in a way I'm sure it'd be
2:44:40the case. Taiwan is like even more so today like is very much tied up in the iPhone. Tons
2:44:47of the components are made here. I'm sure it would be a similar thing with the watch,
2:44:54but all that matters is the final assembly.
2:44:58I think then I really do think that at least the edition and I think maybe even the stainless
2:45:04will be assembled in the US.
2:45:05And that's something that they could add later because they have the printing on the back.
2:45:09I would imagine that they would put it there if they did,
2:45:12but there's no reason for them to have it now
2:45:14'cause it's not for sale.
2:45:15- On the prototypes, right, not for sale.
2:45:17But I just don't see how you can sell a high-end watch
2:45:20that's made in China.
2:45:21And I know that that sort of thinking
2:45:23kind of did in the Swiss industry in the '70s,
2:45:25like when they had their dark ages,
2:45:27when quartz watches first became a thing.
2:45:29One of the reasons they wrote them off
2:45:30was that they were all made in Japan,
2:45:32and they were like, "Nobody's gonna buy a watch from Japan.
2:45:35"Japan means crap."
2:45:36You know, the watch industry ran
2:45:38into the same Japanese buzzsaw that the car automotive industry
2:45:42did, you know, nobody's gonna buy Japanese cars, Japanese
2:45:45stuff is junk. And you know, there's that thinking that made
2:45:49in China is sort of a badge of, well, not a shame, but it's not
2:45:53a badge of honor. It doesn't stand for quality made in China
2:45:55and just means well, everything's made in China. Made
2:45:59in the USA means something
2:46:00right. And the thing is, is that the difference with the watch
2:46:04industry in the 70s was there.
2:46:07There was no like it was all.
2:46:09It was all Switzerland,
2:46:10so this was completely new,
2:46:12whereas Apple would be entering
2:46:14an environment now where there
2:46:16the expectation of there
2:46:17being a low end is art
2:46:18is already there.
2:46:19And so whereas the watch
2:46:22like the Swiss industry
2:46:23had to deal with.
2:46:25Basically there was a big watch market.
2:46:28They owned it all and suddenly this whole
2:46:31in like we've talked about before,
2:46:33like the consumer market.
2:46:34there's it's bifurcated it's bifurcated between the high end and the low end the loan cares only about price and
2:46:39Suddenly there was a new option for price at the low end and they just couldn't respond
2:46:42Apple that's not gonna be surprised for Apple. They're they're gonna be there
2:46:46Everyone knows that that's the case and those products are already on the market. There's already the where device is there
2:46:52I'm not sure if that made sense, but that it made sense in my head
2:46:56Well, that's a good it's good point I need to wrap this up
2:47:01This is possibly record-breaking in length, but there's so much to talk about
2:47:04Can't even imagine that I thought last week. Maybe I'd get to the watch with Renee
2:47:08Ben Thompson, thank you so much for being here. Everybody can read Ben on a daily basis
2:47:16effectively at your website's
2:47:18trajectory
2:47:21Stata Kari. Yeah, so I I have post a couple free articles a week and then I have the for pay daily updates
2:47:28And it's well worth it is great stuff. You've been killing it all year
2:47:32Your perfect example two of that thing
2:47:35I linked to her this week of the best way to be right all the time
2:47:37Or most of the time is to be willing to change your mind
2:47:40You change your mind on a watch and of course the two weeks
2:47:43It's true. I have to I you know, but I mean that as it's a high compliment because it's you know
2:47:50It's human nature not to you know, we want to be right at the first time and it's more important to just keep thing
2:47:55Well, it's not I mean to boot we but we both might be wrong too. I think that's what's that's what's so yeah
2:48:00It's almost like I've already written four things about it
2:48:02And I feel like I could I'm always worried about people being bored, but that's what so it we haven't had
2:48:08something of the iPad kind of but I feel this is
2:48:12What makes this more compelling than the iPad for me is that it's smaller and to me
2:48:18I think that's that's important like
2:48:22it makes it a potentially more meaningful device because
2:48:27portability will always be a key constraint and
2:48:31It's just so fascinating either
2:48:34Yeah, yeah the iPad that was not like a wow. I can't believe they could make this right right exactly it
2:48:42Whereas I think the watch is going right ended and what that means and people criticize the Apple not being a why but if you?
2:48:49think about it if you think about it the
2:48:52There's two alternatives one is that they don't know two is that they're so far their thinking is so far ahead of where our
2:49:00expectations are that we just like we we can't catch up and
2:49:05What's it fascinating is one it could go either way?
2:49:08Which is makes it really interesting but two if they are so far ahead
2:49:12there's just like there's so much greenfield to even imagine what might be possible and what might be coming and
2:49:18No, I haven't been this like I don't want to say obsessed but just like constantly turning over my head
2:49:23What what a product could be in a very long time?
2:49:26Yeah
2:49:28Exciting stuff to come. All right. Let me thank my three sponsors great sponsors this week
2:49:32We got you bar from brawler software comm be r a w er software comm taskbar doc replacement for the Mac
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2:49:47Third sponsor was need at need edition
2:49:50Com there's that word addition again
2:49:54men's magazine great curated
2:49:57Clothes coffee gadgets stuff like that. Why thanks to them Ben. Thanks. Thank you
2:50:04I'm hitting stop