0:00:00[Music]
0:00:06From Relay FM, this is Connected, episode number 88.
0:00:11Today's show is brought to you by PDF Pen Pro from SMILE, the all-purpose PDF editing tool.
0:00:18My name is Myke Hurley and I'm joined by Mr Federico Fittici.
0:00:24Hello Myke.
0:00:25Hello Federico, how the devil are you, sir?
0:00:28I'm doing great, Myke. As I told you when you called me, I'm still kind of relaxing,
0:00:34catching up. I'm gonna go grocery shopping later, you know, which is... It sounds like
0:00:40a quick kind of task, but it takes me a couple of hours, you know. That's how I do my shopping.
0:00:46So I'm doing great, Myke.
0:00:49So I think Steven... Steven's not here this week. I think he's hunting IMAX.
0:00:52Yeah, he's taken on a cross-country trip to find the remaining IMAX.
0:00:59Because I think he only needs one more, and he has them all.
0:01:02Only one?
0:01:04I think it's only one. So he is, I believe, he's somewhere in California hunting for the final IMAX.
0:01:16How do you hunt for an IMAX?
0:01:18Exactly.
0:01:19That's why he's not here, it took a little bit longer than he expected.
0:01:27He's just got graphite left.
0:01:30Graphite.
0:01:31Which isn't, you know, it's not the most exquisite of colours if you think about it.
0:01:35Because I believe he was able to find a pretty good Bondi.
0:01:38Oh, look at that, look at that, good job.
0:01:42So he got one of those.
0:01:45Now he's off looking for a graphite, so I hope that he will be back next week and I
0:01:48hope that he finds everything that he's looking for.
0:01:52- Nice, good luck, Stephen.
0:01:53- Good luck, Stephen.
0:01:54- Thinking of you.
0:01:55- We are, we are, good luck.
0:01:56Because it's just me and you,
0:02:00should we talk about something that we're doing?
0:02:02- Yes.
0:02:03- So Federico, everybody should know by now,
0:02:06we spoke about this last week,
0:02:07Federico is going to be traveling to San Francisco
0:02:12and we are going together for WWDC
0:02:15and I realized last week,
0:02:18we knew that you were gonna be in London for one day,
0:02:20you're coming to London
0:02:21and then me and you were gonna stay in a hotel
0:02:23near the airport and go from there together
0:02:26out to San Francisco.
0:02:28And me and you were gonna have dinner with some friends.
0:02:30And I realized why have dinner with friends
0:02:32when we can see lots of friends.
0:02:35So we're gonna have a meetup in London,
0:02:39a bar called the Big Chill House.
0:02:41Now we have a limit on the amount of people
0:02:43that we can fit in the room.
0:02:45So we instituted a ticket policy for this,
0:02:48and we had 70 tickets for the room.
0:02:50They are all sold out.
0:02:52Now the reason I am telling you all about this,
0:02:54dear listener, is I spoke to the venue today,
0:02:57and there is the possibility for us
0:02:59to get a larger room at this place.
0:03:02So if you are interested in coming to a connected meetup,
0:03:06it will be me and Federico,
0:03:08and we'll be hanging out at a great bar.
0:03:10We did this meetup for upgrade in this area previously,
0:03:14and you wanna come, it's on the 10th of June.
0:03:17It starts from eight until 11.
0:03:19You will need to have a ticket to come
0:03:21because we have a maximum amount of people
0:03:22we can fit in the room.
0:03:24You can go to Tito, ti.to/relayfm
0:03:28and you can find out more about the event.
0:03:31Sign up for the waiting list.
0:03:33There are nearly enough people on the waiting list now,
0:03:36Federico, which will allow me to confidently book
0:03:39this larger room.
0:03:41- Oh, that's so insane.
0:03:43So if you are interested, if everybody that we have
0:03:47on the waiting list gets a ticket,
0:03:48we're very nearly sold out as well for that larger room.
0:03:52So once that's the case, that's as big as the room can be.
0:03:56It takes about 150 people.
0:03:58- It's just totally insane.
0:04:00- Yeah, there's an amazing poster,
0:04:02which I'll just put in the show notes anyway,
0:04:04because Frank, as always, did an incredible job.
0:04:07So we really hope that people can make it.
0:04:10We're doing everything we can to increase the size for this one because we can.
0:04:16With this instance we can actually increase it, but it will mean that everybody will need
0:04:20to buy a few drinks because otherwise I will be left with a very large bill at the end
0:04:25of the night.
0:04:27So I hope that you can go check it out and we hope to see you in London in June.
0:04:32Yeah, I mean, with all due respect, Myke, it's kind of crazy that this many people are
0:04:36coming to meet us.
0:04:37I mean, we're just...
0:04:38Yeah, it's not me.
0:04:39me, it's all for you. But I'm happy with that, I'm happy with that, I'm happy with that.
0:04:44I don't think so, I don't think so. You're kind of an attraction lately.
0:04:48Oh yeah? Yes you are. There's people constantly talking
0:04:52about you and your iPads. That's true actually, I was on Mac Power Users.
0:04:57See, see, you're the man of the hour, Myke. Katie was so mad. She was so upset about the
0:05:05iPads is so good, it's such a good episode.
0:05:08You gotta listen to that.
0:05:09Yeah, it's well worth listening to.
0:05:12I think at one point she just goes into complete despair about me, which is amazing.
0:05:17It's amazing.
0:05:18I love David and Katie and being on Mac Power Users is an honor because it is, as we have
0:05:24mentioned many times, an absolute institution and we're very lucky to have it as a part
0:05:28of Relay FM.
0:05:29I was happy to go on the show to preach about my iPad, multi-iPad life, which I increased
0:05:36today. Federico bought another pencil today. So I have both iPads now fully decked out
0:05:42at all times.
0:05:44I'm no longer surprised, Myke.
0:05:47You know, I'm all in. I am all in. I'm taking what you started and I'm taking it to its
0:05:53furthest point possible.
0:05:55You're multiplying that, really.
0:05:58And I'm actually planning this week for the incomparable project that I'm working on to
0:06:07actually record something and edit it on iOS.
0:06:10So I'm going to do that over the next week or so.
0:06:12I'm really trying to go in all in here, my friend.
0:06:16You should do a time lapse video of you trying to do that on the iPad.
0:06:19Yeah, that would be...
0:06:20You could see me pulling my hair out.
0:06:23Actually, I wanted to mention one last thing about the meetup, just for everybody that
0:06:27is coming and may come. If we do increase the capacity, the room will change. We had
0:06:35it as a place called the Deco Room. It will be in a different room, but I'll send information
0:06:40out about that if we do it because we're going to be getting a bigger room hopefully.
0:06:43So please sign up and we'll hopefully see you there.
0:06:48All right, so I wanted to mention, do you remember last week when we were talking about
0:06:54our sponsor, I mentioned how maybe a wizard could create a confetti cannon to go off when
0:07:00Ark finishes.
0:07:01Yeah.
0:07:02Well, there is a wizard.
0:07:04Yep.
0:07:05Oh my god.
0:07:06Lucas tweeted at us with a script.
0:07:10And what it will do is he actually did something very smart here.
0:07:14It doesn't launch physical confetti.
0:07:16It launches digital confetti on your computer screen whenever Ark completes a backup.
0:07:22Bravo Lucas.
0:07:23Bravo.
0:07:24Look at that screenshot.
0:07:26- It's fantastic, right?
0:07:27- People are crazy, it's fantastic.
0:07:28- So, you put it on GitHub, you can go and check it out.
0:07:31And so it's very, very clever.
0:07:34And I say bravo to the wizard that is Lucas
0:07:37for creating our backup confetti cannon.
0:07:41- Good job.
0:07:42- Last week, we teased that you were working on a project
0:07:46that I expect everybody knows about right now,
0:07:48which was your iOS 10 wishes and concept video.
0:07:52along with the dark theme for Mac Stories, which I am reminded about as I see the lovely
0:07:56dark Mac Stories in front of me.
0:07:58Oh, nice, you keep it activated.
0:08:00Yep, keep it dark, my friend. And I am very flabbergasted by the views, view count in
0:08:12this YouTube video.
0:08:13It's approaching 400,000 views.
0:08:16400,000, Federico, 400,000.
0:08:21It's a lot.
0:08:2278 people that gave it a thumbs down though. What do you what is your comments on that?
0:08:25What do you think about those 78 people? I?
0:08:28Think some of those people
0:08:31Maybe half of those are just trying to to see what what it feels like to use the thumbs up down button
0:08:38Yeah, maybe half is just an experiment. I'm gonna press the button
0:08:41No, I dislike this. Oh, no. I know I've no I have liked it again. So I
0:08:47Reversed my decision. I went to just see how it felt. I didn't like how it felt
0:08:50Here's something interesting about the like/dislike button on YouTube. When you click the little
0:08:55like button, the button goes blue from grey. And when you click the dislike button, it
0:08:59goes black from grey. Wow.
0:09:01Yeah, they're like, "They'll do this!" You know? It's a little Pavlovian response for
0:09:06you. I was very honored to get a special thanks.
0:09:10Of course. You and my girlfriend and John were the few
0:09:17people that had to endure my stress, my questions and my doubts before launching.
0:09:24I have seen many, many, many, many cuts of that video.
0:09:28Be like, "Look at this one! We have a line change! Okay!" So off I go, watch the one
0:09:34line move. But it was, it is an amazing video and I was very honored to be able to see it
0:09:42in advance. But I wanted to ask you a few questions. Because look, we'll go into these
0:09:46wishes we will actually revisit the wishes on the show probably in late May right yes
0:09:52we'll do it as part of our what do we want to see at WWDC so there's no point going over
0:09:56the wishes right now but I wanted to ask you about the video itself because obviously that
0:10:02is a different method a different medium for you and Mac stories and how did you find the
0:10:08YouTube system?
0:10:12Well, I think I kind of cheated because I asked CGP Grey for advice before uploading
0:10:19the video, so he gave me like a checklist of things to do and to make sure that I was
0:10:24doing. It was fine, I think. I opened the channel the week before, so we didn't have
0:10:32a YouTube channel. And before uploading this video, I just moved two of my old videos,
0:10:3830 second videos about drafts and iOS automation, just to make sure the channel wasn't empty
0:10:44when it was launch day.
0:10:46I uploaded a logo and I put in a bunch of links for the Mac Stories bio, linking to
0:10:53Mac Stories on Twitter and the club, and then I prepared the description, which was okay,
0:10:59no major issues there, and I uploaded the video.
0:11:02I think I have to be thankful for my fiber connection because the video was in 4K, it
0:11:10was almost a three minute video, and it was about 500 megabytes, maybe less.
0:11:17That's not too bad.
0:11:18No, it's not too bad, it took me like a minute.
0:11:21So funny enough, you know that the videos, I don't know if you know, but I put Cortex
0:11:24on YouTube.
0:11:25Yeah, I do, I know.
0:11:27it's just the audio file and the logo, like a version of the logo, which is in 1080p.
0:11:34The videos tend to be around 2 to 3 gigabytes.
0:11:37Wow.
0:11:38It's nothing, right?
0:11:40Just because that's just how the video comes out, because it's still a video file, which
0:11:43is two hours long.
0:11:45Oh yeah.
0:11:46Right?
0:11:47Yeah.
0:11:48So that's one of the unfortunate parts about doing this is there's nothing.
0:11:51But it ends up being like two hours long.
0:11:53Yeah.
0:11:54And I didn't really come across any issue.
0:11:56I mean, the video upload is fine.
0:11:58I set it to private because I just wanted to make sure
0:12:01that people couldn't guess the link.
0:12:03CGP told me it never happened to him
0:12:05that people would guess a link for an unlisted video,
0:12:08which was another option.
0:12:09But I just prefer, you know, for my paranoia.
0:12:12- There is something weird that like,
0:12:14when I go to your video page on YouTube,
0:12:17it doesn't show the iOS 10 video.
0:12:20I have to go in-- - Yeah, that's kind of weird.
0:12:22- Something weird has happened there.
0:12:24Like you have to go to videos before it shows up.
0:12:27- I know, I know.
0:12:28- But whatever, it doesn't matter
0:12:29because people were just finding it as being linked to,
0:12:32I think you were in the YouTube trending.
0:12:34- Yes, yes, and that really made up for about 20%
0:12:38of the views being discovered in the YouTube trending page.
0:12:43I saw a lot of people,
0:12:45like I could see the effect in the real time stats.
0:12:49I could see the effect of the new people
0:12:51discovering the video from the trending section.
0:12:54it hit the trending page when it was about 100,000 views.
0:12:59So I guess the YouTube system finds kind of momentum
0:13:03in videos and decides to feature them.
0:13:06And it was also embedded on a bunch of other tech blogs
0:13:09which helped in getting the kind of exposure.
0:13:12It was on 9to5Mac, it was on The Loop.
0:13:14- That was part of the reason for doing the video, right?
0:13:17Surely for that, yeah.
0:13:19- Yeah, because it's so easy to embed a video
0:13:22and that was the whole idea.
0:13:25I got a bunch of bloggers asking me,
0:13:27"Can, do you mind if we embed the video?"
0:13:30And I was like, "No, that was the main goal.
0:13:32"Please do use the embed code."
0:13:34- Right, I don't know if this is why you did this,
0:13:36but here's when I look at this objectively, right?
0:13:38If somebody block quotes an article, you get nothing.
0:13:42Nothing happens.
0:13:45It's just there.
0:13:46But if they embed a YouTube video, you still get the view.
0:13:49The view shows in your view count.
0:13:50Now, you're not getting any money from this
0:13:52you didn't put any advertising on it, which I think was the right thing to do by the way,
0:13:55because of the purpose of the video. Oh yeah, you have not in the system for long enough,
0:14:00but I think the purpose of the video was to promote Mac stories as well, right? Like,
0:14:07the other side of this video was to promote Mac stories to new people, right?
0:14:12And the club, yeah.
0:14:13Yeah, and the, yeah, and club Mac stories as well, so that's kind of like, you know,
0:14:16the other side of this, so that's how it brings more people in on the other side, so
0:14:21So not having advertising on it would have been the right move anyway.
0:14:25I think it was a very clever publishing and business move to do it this way, to create
0:14:30this video which can be anywhere and it doesn't matter where it is because people would in
0:14:35most cases take the video and embed it.
0:14:39Pretty smart.
0:14:41Yeah.
0:14:42One of the comments that I got from a lot of people is that it's not an absurd concept,
0:14:49that it makes sense.
0:14:50hundreds of people told me it makes sense, it's not crazy, and it's the kind of features
0:14:55that I could see happening, which is not usual. So I've been covering, you know, Mac Stories,
0:15:01I've been writing for seven years, and every time there's a crazy concept video, it gets
0:15:05a lot of exposure, but a lot of people also say, "This is crazy, Apple will never do this,
0:15:10these features are totally useless." And that was one of my concerns, that people would
0:15:15see the video as a sort of a crazy project, you know, with the crazy features that Apple
0:15:20would never do. And as soon as I published the video, like, the reactions started coming
0:15:26in that it's sensible, it makes sense, it's not crazy, and that makes me very happy. Because
0:15:32we, both Sam and I, we spent a lot of time thinking what are the features that we think,
0:15:39we both think make sense and what's the best way to do it in an Apple-like fashion, that
0:15:46it's not too crazy with new animations or new interface designs or a different theme
0:15:52for the entire iOS interface, so it really makes me happy that people see some kind of
0:15:57a reason in there, some kind of "Yeah, it's not too crazy, it makes sense, I could see
0:16:02this happening, good job".
0:16:03That makes me happy.
0:16:04Yeah, I mean, cause well, I think part of it is most of the concept videos, you only
0:16:09ever find out about them because they're crazy wild things, but you already had the
0:16:14ability to create a sensible one and for people to see it, which is why I think it
0:16:19became popular, right?
0:16:20Because you have the platform in which to get this video out to the first amount of
0:16:25people that need to see it for it then to become viral.
0:16:28Whereas people like Sam, who created a concept video,
0:16:33he needed it to be a little bit more out there
0:16:37to get people like you to find it in the first place.
0:16:40Does that make sense?
0:16:41- Yeah, yeah, it makes sense.
0:16:42- Like if he created your video,
0:16:44you'd just be kind of like, yeah, sure.
0:16:46Like this is sensible stuff.
0:16:48You know?
0:16:48I think it depends where it's coming from.
0:16:50- Yeah, I think the angle that we chose was,
0:16:54so look, every year I do an iOS wishlist.
0:16:57and I do it because I want to put it out there, the kind of features that I would like to see.
0:17:02And this was not the kind of... the way that you come at it is not,
0:17:06"Look, I'm a designer, I can make super cool stuff, this is what Apple should do on iOS."
0:17:11It was, "I have these wishes, and here's how I visualize them in my mind."
0:17:18And it's a very... it's not a big difference when you think about it, because the final outcome is the same,
0:17:24a concept video. But the way that you approach it and the way that you present it, I think
0:17:28it resonated with people. And they could see the idea of here's a person, he works on iOS,
0:17:35he writes on the iPad every day, he knows iOS, he would like to see these features,
0:17:42and he found a way to visualize them. And I think the end goal helped kind of get people
0:17:48interested and to see, to help them see my line of thinking. So I'm very satisfied
0:17:56with how everything went in the end.
0:17:59Talking about very satisfied, you got a WWDC ticket?
0:18:04I did, yeah. I was very lucky, Myke. Last Friday I was at the club, not club, I'm
0:18:14So it's an actual club with people dancing and drinking.
0:18:17And I got an email from the Apple store,
0:18:22here's your receipt.
0:18:24And my heart started pumping like crazy.
0:18:28I was like, oh my god, oh my god.
0:18:30And Sylvia was like, what's going on?
0:18:32And I look at the receipt, and there's the WWDC ticket
0:18:36confirmation.
0:18:37And I was like totally going nuts.
0:18:39And so I bought drinks.
0:18:42and we celebrated the ticket.
0:18:45- I'm not surprised.
0:18:46So what is your plan?
0:18:47- My plan is to first watch the keynote
0:18:51because I've never been there and it--
0:18:54- Well, you have.
0:18:55Maybe not at the Grand. - Not at WWDC.
0:18:58- Oh, well yeah, but you've done one.
0:19:00- Yeah, I've done a keynote.
0:19:01I just wanna do a WWDC keynote.
0:19:03I've done a product keynote.
0:19:05And I feel like it's a nice sort of celebration
0:19:08to do my first WWDC keynote for iOS 10,
0:19:11like a new beginning, whatever. That's how I see it in my mind.
0:19:14And the other thing that I want to do is I want to attend key sessions for iOS,
0:19:20because I need that kind of information and kind of networking with developers to prepare my iOS 10 review.
0:19:29So last year I spent way too much time watching the videos over and over and talking to people who were there at the sessions
0:19:39over email to get a better understanding of what was going on, and just talking to developers
0:19:45to ask them questions.
0:19:47And I feel like I can save a lot of time if I go to the key sessions that are, you know,
0:19:52that are...
0:19:53I mean, I have to decide which kind of sections I want to cover in my review, which we'll
0:19:57talk about in the evening.
0:19:59Me and you and Steve and Myke, you will have to help me.
0:20:02But once I do know what kind of sections I want to have in my review, I will mark the
0:20:06the sessions that I want to go to and just attend those and then talk to people and go
0:20:11to the Bash and that kind of essential stuff.
0:20:13I'm not interested in OS X, not interested in watchOS, I'm going there for iOS and
0:20:20the key stuff that I understand that I want to cover.
0:20:23And I feel like I need to wake up early, go to the key sessions and then in the afternoon
0:20:30and maybe in the mornings where iOS doesn't have a key session, just have fun, because
0:20:35I want to mix it up, you know, it's my first time I want to do part work, part fun, and
0:20:41I feel like having fun there is important because it also helps me relax and meet new
0:20:47people, which again is sort of a circle of life. I need to have fun, meet new people,
0:20:52talk about work, fun, you know, it's all connected. No pun intended. So yeah, that's the plan.
0:21:02what I want first watch the keynote, understand what's going on, understand the kind of sections
0:21:07that I want to have in my review, talk about it with you guys, find a plan for the key
0:21:12sessions that I want to go to and just attend those sessions and then have fun and meet
0:21:17people.
0:21:18It's a pretty great plan man, it's a pretty great plan.
0:21:20Yeah, I think I can do it, you know?
0:21:22Yeah, the days are quiet, the day times are quiet because so many people are in the sessions
0:21:27and now of all the other conferences and stuff that go on anyway.
0:21:30You just need to understand that you are going to be very very busy.
0:21:33I know, I know.
0:21:34Prepare for that.
0:21:36I'm preparing both physically, I'm exercising a lot.
0:21:41It's true.
0:21:42I believe you.
0:21:44There's a bunch of tasks in my to-do with daily exercises.
0:21:47I saw them in a Twitter screenshot.
0:21:49I saw like abs and something.
0:21:51Yeah, and it's being in good shape.
0:21:53So I'm ramping up the exercise routine, I'm doing the diet that I was doing last year
0:22:00again. So I need to be very, very energized. Because it's gonna take a lot out of me to
0:22:10do all of the stuff that I want to do. But it's possible, you know. There's worse things
0:22:15in the world. This is fun. This is great. I shouldn't be concerned. Just gotta have
0:22:19fun.
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0:24:08smile for their continued support of this show and relay fm all right Federico this is going to be a
0:24:16a tough one my friend. Are you ready for this? Apple earnings. So what quarter was this?
0:24:26This was Q2. Q2 2016. I believe, now we can talk about this and we're going to talk about
0:24:36this in quite a bit of detail, but I believe that Q2 2016 is going to go down as a moment
0:24:44in Apple's history in the future? Well I mean yeah it's first down quarter since
0:24:522003 I think. So yeah definitely. For 13 years, quarter on quarter, Apple have increased their
0:25:00profit and revenue and all that stuff right? It's gone everything has gone up. Quarter
0:25:06on quarter for 13 years. So we're looking at if you're thinking about every time that
0:25:11Apple come on to do one of these earning results.
0:25:15They've had over 50 of these, they've come on
0:25:17and the story's been the same.
0:25:1950 in a row, right?
0:25:20Better than last time, better than last time,
0:25:22better than last time.
0:25:24This time not so much.
0:25:25And I find this very interesting.
0:25:29And I wanna just preface this conversation by saying,
0:25:31Apple is not doomed, and I understand
0:25:34that they made a ton of money.
0:25:36- Yeah.
0:25:37- But a downward trend is never a good thing.
0:25:41- True.
0:25:42- And that's what we're looking at now,
0:25:43especially when you look at some of the areas that are down.
0:25:45So profit is down, the iPhone is down, Mac is down,
0:25:50and of course our friend, the iPad, is down again,
0:25:55year on year.
0:25:56So let's look at the iPhone a little bit.
0:25:59So the iPhone sales were strongly increased
0:26:04in the previous quarter because of pent up demand in China,
0:26:09is my understanding. In Q1 they had lots and lots of sales for the 6S because they had
0:26:16some pent up demand there. A lot of the stuff that you'll find in these earnings calls,
0:26:24I'm going to put a bunch of articles and show notes, one from you, one from Jason, you guys
0:26:29both do a really great job of breaking this stuff down. A lot of it is very complicated,
0:26:34But basically it seems like Apple was saying that they're in a situation where the upgrade
0:26:42cycle is looking pretty good on the iPhone, but the previous quarter was a bit of an anomaly,
0:26:47which makes everything else kind of look a bit worse.
0:26:49Is that, am I right in saying that?
0:26:50It's kind of what they were saying, right?
0:26:52That's my understanding too.
0:26:54It's like this is better than it looks, but it looks really bad because the last time
0:26:58was so good.
0:27:00Yeah.
0:27:01And they also said something about the SE. That the demand of the SE has been higher
0:27:07than they expected. And I actually have real life experience of this as of yesterday. So
0:27:13yesterday morning Adina woke up and her phone was dead. Like it's just… I have never
0:27:17seen an iPhone as dead as this iPhone.
0:27:20So it's the very old iPhone she was still using.
0:27:23She was using a 5S, my old 5S.
0:27:25Oh okay, a 5S.
0:27:26Turn it on and the screen would just go blue and then it would change all different colors
0:27:30and die.
0:27:31- No, that's a dead iPhone.
0:27:33- It's dead dead.
0:27:33So she went to the Apple store to try and get an SE
0:27:36and couldn't get one.
0:27:37It was three weeks back ordered.
0:27:38- Wow.
0:27:39- So today I went and picked up a 6S for her.
0:27:42She decided to go 6S.
0:27:43'Cause she really wasn't very keen on the SE
0:27:46because it looked the same.
0:27:47She really was like very vehemently against it
0:27:51because she's had the 5S for like two years or whatever.
0:27:55And she's like, "I really don't wanna pay 500 pounds
0:27:59for a phone that looks exactly the same. She was very against this. So she's gone for
0:28:03the success. And I get it. I understand that feeling. I totally understand it. But the
0:28:09iPhone being down is a… it just looks weird, right? On the charts it just looks weird.
0:28:15It looks strange because we're not used to it. But this is a question that I asked
0:28:18you before we recorded the show. Is this… do you think… is this Apple's fault? Or
0:28:24Or is this just a consequence of the technology world changing?
0:28:31Is Apple to blame or is it like an outside force, a trend going on for any company that
0:28:37Apple can do anything about?
0:28:40I feel like it's got, it just has to be a bit of both.
0:28:45There are trends that are changing but Apple could always do something.
0:28:52I mean it's really difficult because it does seem like trends are bringing this stuff down
0:28:58but none of these bad things have affected them before.
0:29:03Something struck me, a comment from Tim Cook, he said, last year, no he actually said the
0:29:116s is stronger than the upgrade cycle of the 5s but the acceleration of last year's iPhone
0:29:196 launch, it's much much bigger than what we're seeing this year. Meaning, as an upgrade,
0:29:25the 6s is doing better than from the 5 to the 5s, but it's no match for the insane sales
0:29:33of the iPhone 6 last year. So why do you think that is? Is it just because the iPhone 6 was
0:29:39a better phone compared to what used to be there before? Is the 6s kind of a letdown
0:29:46in terms of an upgrade?
0:29:48No, I don't think it's that. I just think it's because they were selling into new markets for the six.
0:29:53For the first time.
0:29:54For the first time. And I think it was just the thinking that it had nothing to do with the iPhone 6.
0:30:02It was just the iPhone. If the iPhone 6s was out there, then the iPhone 6s would have sold that many.
0:30:10It was just because they were into a new market that they weren't in before. Because look, this is the problem, right?
0:30:15This is all the conversation in the previous quarterly results when Apple said that this
0:30:19was going to happen.
0:30:20This isn't a surprise that this happened, by the way.
0:30:23If anybody wasn't following in their previous earnings report, Apple forecasted that they
0:30:28would be down.
0:30:29They fell within the estimate that they gave, which is also weird for them, right?
0:30:34The fall within the estimate.
0:30:35Usually, they exceed the estimates, but they fell within the estimate.
0:30:40And I think it's purely because Apple have bumped into the amount of people in the world
0:30:46that can buy their products.
0:30:48It doesn't usually happen, but this is the situation that they're in.
0:30:51They are in a "we are currently at the point where we have sold our products to everyone
0:30:56that can buy them."
0:30:59And they mentioned India as a growing market, and great, there's more people than China,
0:31:03is that right?
0:31:04I'm just going to say that, probably be wrong and everybody in both countries would be mad
0:31:08at me, but lots and lots of people in India that they can sell to, and if the middle class
0:31:13emerges in India the way it did in China, great, maybe in a couple of years' time there'll
0:31:17be more phones to sell. But then all it will do is then it will just push this problem
0:31:22off another few years.
0:31:25Maybe that's why the stuff like the upgrade program is so important for Apple right now,
0:31:31and why so many people see a lot of potential there, because having reached the kind of
0:31:36ceiling, you know, all the people that you can reach that want to buy your phone, now
0:31:42what you gotta do is you gotta switch gears and have those people upgrade year after year
0:31:46to the latest model.
0:31:48So what you end up with in that scenario is lower income, like overall, but more sustained.
0:31:55Yeah, but sequential stability, I guess.
0:31:58Because what it will do is it will bring it down for a period of time, but you won't see
0:32:01the peaks and valleys, which is probably better from a Wall Street perspective.
0:32:08Probably it's really like a subscription. I just checked by the way, there's 100 million
0:32:13people difference between China and India, and India is 1.2 billion and China is 1.3
0:32:21million, a billion, sorry. In terms of numbers it's not a huge difference,
0:32:27I mean, Italy is not even 60 million people. Yeah, but when you're over a billion, 100
0:32:31hundred million. It's give or take.
0:32:33Yes, it's give or take a hundred million people. Tim Cook even said, "We see India
0:32:39as China seven or ten years ago."
0:32:42Exactly. This is what I'm saying. This is their next potential market, but they're
0:32:46many years away from that, and all they'll be in is this problem again. They'll have
0:32:50a peak where they sell into that market, then it will go down again. It won't go down
0:32:55to where it is now. It will probably still be higher because it will be a new market
0:32:57and sending to more people.
0:32:59But all they would be doing is just having this problem again.
0:33:03Like where Apple is right now,
0:33:05it is not a problem for the company.
0:33:08This is not a scary thing.
0:33:10But what it is is a down trend.
0:33:12And down trends are not good.
0:33:14You just don't wanna see them, right?
0:33:16Because they're forecasting the next quarter
0:33:19is gonna be down on the previous year's quarter again.
0:33:22So this is gonna happen again.
0:33:24So the reason that I'm kind of so interested in this
0:33:28and just looking at it is in the whole time
0:33:30that me and you have been covering Apple,
0:33:32even interested in them, this has not happened.
0:33:35- It's the first time.
0:33:36- This is the first time.
0:33:38And next time is gonna be the second time.
0:33:42So it is just a very peculiar thing.
0:33:44Okay, let's take a look at this, right?
0:33:46So if the iPhone is down, what, in theory,
0:33:51The way that the company could, and I would assume that other people in Wall Street would
0:33:56say should go against this.
0:33:58If you've met the amount of people in the world that can buy your iPhone, you should
0:34:03be selling more of your other products, right?
0:34:06Like that is the way that very simply on paper, you would meet this problem.
0:34:10Like if you've sold, if everybody has an iPhone, you then need to sell everybody an iPad, right?
0:34:16Like that is in theory the way that you would beat this issue, right?
0:34:22You sell them more products.
0:34:24So this is where the other part of this is.
0:34:26Mac is down, which is really weird.
0:34:29Like that doesn't happen very often.
0:34:30I think the previous quarter the Mac was down year on year, but like that's just like a
0:34:34strange thing to occur.
0:34:36Like why would the Mac be down?
0:34:38That doesn't even make any sense.
0:34:40And then iPad is down again.
0:34:43So every time I mention this, and I think it's very clear now that I'm loving the
0:34:51iPad.
0:34:52I think in previous years people have thought that I was so harsh on this point because
0:34:57I didn't like the iPad.
0:34:59But you know I am now iPad forever.
0:35:02And whenever I bring this stuff up people point out the fact that like they sold 10
0:35:07million of them, 10 million of everything is amazing.
0:35:10To me it's not the amount that's sold.
0:35:12I don't care how many it is. It could be a billion or ten million. It's the fact that
0:35:17it continues to decline. And the fact that the iPad sales are just going down, down,
0:35:26down, it's not good because it hasn't reached the bottom.
0:35:31See, I don't know. I think it's kind of… I think the iPad from a financial perspective
0:35:37is kind of weird because I don't know how to kind of treat it. Is it like an iPhone?
0:35:45Is it like a Mac? Because it's really none of both.
0:35:50From a financial perspective you cannot compare it to either because the Mac, whilst it's
0:35:56had a shaky Q2 here, has over the last few years grown. Not by a lot and it's still
0:36:04half the size, but the trend is good, right? That not only are the people who currently
0:36:09buy a Mac using it, there are new people buying the Mac. That's not what's happening with
0:36:15the iPad, right? Like if you look at the iPad and the Mac, they're probably the closest
0:36:20in comparison from a renewal cycle, right? Like, you have one and you use it for a few
0:36:27years and then you buy another one when either one breaks or there is something so irresistible
0:36:32that you must buy it. You'd expect that they're going to be closer like that but something's
0:36:37happened with the iPad in that over time interest continues to wane.
0:36:47Because what's happening is like we're like six years into this product's life cycle now
0:36:51and you can look year on year at all of the quarters and you can see that it's steadily
0:36:56declining. If it would have been after year one, we're at the point that we're at now
0:37:00and it was right down low, you can say "oh, people buy them and they don't buy any more
0:37:05of them" but what's happening is not only are, the way that I look at this is, not only
0:37:09are people taking a long time to upgrade this device, there are less people making that
0:37:15upgrade as time goes on because the numbers are completely unstable, they are just declining.
0:37:22If there was some kind of stability in the numbers, which there isn't yet, you would
0:37:26see people having a relatively frequent refresh rate like you see with the Mac. But that doesn't
0:37:32happen with the iPad and that's why it concerns me and interests me because the product continues
0:37:39to decline. Am I making sense here?
0:37:42Yeah it makes sense and I think it's going to be a long road ahead. If Apple really believes
0:37:47that the iPad is the future of their computing, you know, taking the iPhone aside for a moment,
0:37:54If they really believe that the iPad is the future, it's going to be a long road to kind
0:37:57of change the perception of the iPad.
0:37:59Because what I don't understand is, are people buying iPads as their only computer, like
0:38:06I could do, for example?
0:38:08Or are people buying iPads in addition to a Mac, in addition to a PC?
0:38:14Or is it just, you know, there's people buying the iPad as their only computer, which is
0:38:18lasting for, I don't know, three to four years?
0:38:21And what gives me... so I agree with you, I agree it's concerning, it's very clear at
0:38:27this point that, you know, maybe some people, a lot of people are not interested in the
0:38:32iPad.
0:38:33But what gives me some hope is two things.
0:38:38If people are buying iPads as their only computer, they're buying more iPads than Macs, you know?
0:38:45So if I want to buy a computer, I can choose do I want to buy a Mac or do I want to buy
0:38:48an iPad.
0:38:49And if that's the reason, which I don't know, there's more people choosing the iPad.
0:38:54Yeah, it's still twice the size.
0:38:56It's still almost twice the size.
0:38:58I don't know where it will stabilize, but it seems to be about twice.
0:39:04But in any case, last year Apple sort of started understanding that they've been doing things
0:39:09wrong with the iPad, both in the hardware and in the software, and they started to change.
0:39:16with iOS 9, with the Pro, with the Pencil, with another Pro, with accessories, it tells
0:39:22me that they understood, they kinda stood in a state of, you know, neglection maybe
0:39:31for a couple of years. And now they're doing new things, but it's gonna take time. You
0:39:36know, it's not that Apple releases iOS 9, Apple releases the first iPad Pro, boom, iPad
0:39:40cells are off the roof again. And I think it's gonna take a long time for kind of change
0:39:49the perception. Because what you haven't done in two years, in three years, it's gonna take
0:39:55you twice as much to fix your mistakes. That's the way that I see it. So if Apple really
0:40:00thinks this is the future, we're gonna make things right, it's gonna take a long time.
0:40:04it's going to be a long road. Because there's still people using an iPad 2, and I can only
0:40:11imagine if people who bought an iPad Pro last year are going to be using an iPad Pro in
0:40:17four years. So understanding the refresh cycle, bringing more features to iOS, and kind of
0:40:25bringing the pencil and the better hardware and the kind of experience of the Pro to the
0:40:32more affordable iPad, it's going to take a long time.
0:40:36Tim Cook made two statements about the iPad, which I want to try and see if we can look
0:40:41at these from a common sense perspective to try and understand what he's saying. He said
0:40:45that the June quarter, so the next quarter, we expect to see our best iPad revenue compare
0:40:52in over two years. And then also said we expect seasonal sequential decline in iPad sales.
0:41:00So if I'm reading this correctly, like reading between the lines, what he's saying is the
0:41:05next quarter Q3, there are going to be more iPads sold than the previous quarter, but
0:41:14there's going to be a seasonal decline.
0:41:16So I'm very confused about how this is going to work out, but are they saying it's going
0:41:20to fit somewhere between those two figures?
0:41:24It's weird because if you're saying there's going to be seasonal decline, it would indicate
0:41:30that there is going to be a decline from Q2 to Q3, right? But Q3 2015, there were more
0:41:40iPads sold than Q2 2016. So if they're saying it's going to decline from Q2 to Q3, but
0:41:47yet there's going to be a better comparison from year on year, that doesn't add up, right?
0:41:52I don't know. Also the way that he phrased it…
0:41:55Jason tries to break this down at six colors,
0:41:58which is where I'm getting these quotes from.
0:42:01And what Jason's tried to work out from this,
0:42:05because he's also struggling with it as much as we are,
0:42:07he says, "So I suspect Cook is really saying
0:42:10"that iPad revenue will be down by single digits
0:42:13"for the first time in two years,
0:42:14"as opposed to double digits."
0:42:16So the actual numbers sold might still be down,
0:42:21but the revenue might be better,
0:42:23'cause they're probably selling the iPad
0:42:25at a higher ASP than they were before.
0:42:29Which if that's all it is, that's not good.
0:42:33The real key I believe when I'm looking,
0:42:38so this is the thing,
0:42:38this is one of the main difference about us
0:42:41and looking at this to the way that analysts
0:42:43and Wall Street people look at this.
0:42:45We look at numbers of products sold,
0:42:47not the revenue generated from the products.
0:42:50That's what we care about, right?
0:42:52and me and Jason have spoken about this before an upgrade.
0:42:56The idea being that however many product numbers are sold
0:43:01says something about the direction of Apple
0:43:03and its ecosystem.
0:43:04If Apple made more money from the iPad
0:43:09than they do from the iPhone,
0:43:10and they were still selling 50 million iPhones
0:43:15and 10 million iPads, but just in some random way,
0:43:17they made more money from 10 million iPads,
0:43:20that wouldn't change the way that we look at Apple
0:43:22because there's still 50 million iPhones.
0:43:24So the ecosystem is very different, right?
0:43:26Are you following what I'm saying?
0:43:28Like the revenue generated by product for us
0:43:32is not the point here, it is the amount of that product sold
0:43:35because it says something about Apple's direction
0:43:38as a company, I think.
0:43:39So look, whatever Tim Cook is saying,
0:43:42I don't think that what he is saying
0:43:45is there's gonna be 20 million sold net quarter.
0:43:47- No, me neither.
0:43:50I think the reason I'm struggling is looking at these numbers from a people perspective,
0:44:00if you will. Like, I understand there's really complex stuff going on, and analysts do a
0:44:07much better job at understanding ASP and seasonal trends, that kind of stuff. But from my simple
0:44:16point of view, I wonder, what can Apple do to make things better, to make a better product
0:44:23and to make more people understand the iPad? Because in the end, that's what drives sales,
0:44:28making better products.
0:44:29Yeah, of this product, definitely. Like the iPhone, they can't do anything, I think. There's
0:44:34not really a lot they can do with the iPhone to push against.
0:44:38Maybe a new design wouldn't hurt, you know?
0:44:41Yeah, maybe, but I mean, I think if they're just looking on year-on-year trends and stuff,
0:44:45The idea is they've just sold too many of them.
0:44:49So they can't keep selling it
0:44:51because they're just running out of people.
0:44:54For example, if you look at Q1 2015,
0:44:56that was a new design, and the larger phones,
0:44:59they sold 74 million of them.
0:45:01Q1, they sold 74 million again
0:45:04because they had to pent up demand.
0:45:05I don't think Q1 2017,
0:45:09you're gonna see 74 million iPhones sold again.
0:45:12I just don't think that's gonna happen
0:45:13because both of those times,
0:45:17the reason that they jumped those 20 million
0:45:19over the Q1 2014 in my opinion,
0:45:22is because there were factors of people
0:45:25that hadn't bought an iPhone before for a certain reason.
0:45:28And I would be very surprised
0:45:30if they could do something in 2017, which is the same.
0:45:33Finally, they gave larger phones
0:45:36to people that wanted larger phones,
0:45:38and then they were able to sell iPhones
0:45:39to people that couldn't buy iPhones before.
0:45:41I don't think they're gonna have that in 2017.
0:45:43I just don't see what that could be.
0:45:45But that's why it's not my job.
0:45:47- Is it too crazy to think that eventually
0:45:50the iPhone won't be on a one year cycle?
0:45:54- No, I don't think that would be the case.
0:45:58I would be very surprised because there are,
0:46:02if typically phones are on two year cycles,
0:46:06then you want it on a one year cycle
0:46:10so you get people above years.
0:46:12Am I making sense?
0:46:14Like say you sign up for a contract at 6S,
0:46:17then you won't be ready until the 7S.
0:46:21So it makes sense to kind of sell them every year
0:46:25because you get people every year.
0:46:27- I don't know, I just wonder if this kind of constraint
0:46:31of having to come up with a new phone every year,
0:46:35it's sort of becoming a problem
0:46:38now that the market is so saturated with so many people having an iPhone and it's so difficult
0:46:43to, at this point, it's so difficult to come up with something new every year. I mean,
0:46:47what you gonna do? You cannot do a new design every year.
0:46:50No, but people will buy them every year though, so why not keep selling them every year? Like
0:46:54me and you, we're gonna buy a new iPhone every single year and there are so many people that
0:46:58do that, so why not do it?
0:46:59I don't know, I guess it's just strange to me that this year, the rumors we've heard
0:47:05about the iPhone 7 are so kind of strange because people are talking an iPhone design
0:47:11refresh next year, so for the 7s, but if it's a design change are you going to call it the
0:47:167s or the iPhone 8? And people are talking about the iPhone 7 being mostly similar to
0:47:21the 6s, which I think, I don't know how it would resonate with people, you know?
0:47:26I think this is what people said about the 5 though. That it was going to be similar
0:47:32to the 4. But it was still different. It was bigger but the overall design was very similar.
0:47:39I just think that that sort of stuff is second hand. I just don't take that until I see it
0:47:46to be honest. Like the idea of how it's going to look the same. Because there are some people
0:47:50that just think all these phones look the same anyway. Alright so I just want to go
0:47:56back to looking at all of these numbers. Looking at them all in one, right? Looking at iPhone,
0:48:01Mac, iPad being down, I just think there's no real spin you can put on this.
0:48:05It just doesn't look good.
0:48:06I don't know what you say, right?
0:48:09Again, we'll go back to like, they sold tons of all these products.
0:48:13They made millions and millions and millions, billions of dollars, right?
0:48:18Which is fantastic.
0:48:19As I say, but you look at those trends going down, the fact that you and Jason have had
0:48:23to adapt your charts because you didn't have downtrend charts.
0:48:31It just doesn't... it just feels weird, right?
0:48:34Like, I just don't see that anybody inside of Apple is really going,
0:48:39"Yeah, but we made so much..."
0:48:41They don't like that this is happening, surely.
0:48:43They don't want to see this.
0:48:44You never want to see a downtrend in any kind of work, I think.
0:48:49But, I mean, of course, the sky is not falling.
0:48:54It's not a big problem for Apple right now.
0:48:57of a perception problem, maybe, to have people think that Apple is in trouble. Even if they're
0:49:04not really in trouble, but to have the kind of message, you know, it sort of becomes a
0:49:11self-fulfilling prophecy, maybe. That's my fear, that people are going to start thinking
0:49:16Apple is in trouble, maybe I shouldn't buy a phone, and people are going to buy different
0:49:20phones, people are going to buy different tablets. I know it's a sort of apocalyptic
0:49:24scenario maybe, but that's the biggest problem that I see is the perception of trouble, not
0:49:29necessarily the trouble, which is there.
0:49:31Yeah, because of the headlines, right?
0:49:32Yeah.
0:49:33Because the headlines are not reporting things incorrectly, they're just sensationalizing
0:49:37parts of it.
0:49:38Because this is different.
0:49:39Usually when people, every earnings report will pick out something to try and be like,
0:49:44"Apple is doomed," and it's always just rubbish.
0:49:46But this time, there is stuff that you can pin on, not to say that they're doomed, but
0:49:50to say that you know you can if you want to it's not as difficult to write an
0:49:55Apple is in trouble story this time when they're clearly not but you can write it
0:50:00because you have a chart that proves it. You have the numbers. You have the
0:50:03numbers and again right Apple is predicting between 41 or 43 billion for
0:50:08the next quarter which will be a decrease from the 50 billion sales in Q3
0:50:112015. They're not doomed but this is a change. It's change and I guess
0:50:18Wall Street doesn't like change for Apple in this sense?
0:50:22Why would they though? I mean, I know that Apple is judged on a different scale to other
0:50:27companies and the reason is because they have been like a rocket ship for the last 13 years.
0:50:34So like, the reason Wall Street looks at them in the way that they do is because Apple does
0:50:38things that you could never imagine from a financial perspective. So when that stops
0:50:42happening, they have to be judged differently.
0:50:44Yeah, maybe even rocket ships eventually have to stop to refill.
0:50:49Yeah, let's be honest here, right? Let's look at this.
0:50:53Apple's meteoric rise has helped everyone that cares about it, right?
0:50:58So everybody at Apple has made lots of money because the stock went up so crazily,
0:51:04and people like me and you have built businesses on the back of the fact that Apple has been such
0:51:09an incredibly successful company. Yes.
0:51:11So now that it's changing, we kind of just have to accept that, and just accept the fact that now
0:51:18Wall Street is unhappy, because it's been so incredibly good for such a long time.
0:51:22And I know, I think that as I'm saying all this stuff, I sound like I'm trying to spell doom and
0:51:29gloom, which I'm really not attempting to do. I'm just trying to get my head around the fact that
0:51:34the company that I follow so closely, and have been for such a long time, is now in a different
0:51:41world to what I've seen it at before.
0:51:43The side effect of that is that if this trend continues, Apple has a chance to be seen again
0:51:52as the underdog, and people love underdogs, people love companies who are in trouble.
0:51:56Yeah, I mean, they're not going to be in trouble, but...
0:51:59The perception of trouble is just as strong, maybe.
0:52:03Part of Apple's problem in this is its history.
0:52:06knows they were the company that nearly went bankrupt. You know? So that's why the Apple
0:52:14is doomed stories exist, because it existed once before. Like Nintendo just posted a loss.
0:52:21Nobody's saying Nintendo is doomed. People are saying Nintendo is in trouble, but no
0:52:25one's saying that they're going to go out of business. And Nintendo is in way worse
0:52:28shape than Apple. Because Apple is one of the most profitable companies in the entire
0:52:34world. But it's easy to poke at Apple and point at Apple and say that they're going
0:52:40to go out of business because it happened once before.
0:52:45But there are things that are up. Services and other products are up. The Apple Watch,
0:52:50it falls in other products. Tim Cook said that it met expectations for the quarter and
0:52:54also said, this is very interesting that he said this, that they believe that the Apple
0:52:59Watch will be a seasonal product like the iPod was with a lot of holiday sales.
0:53:03Yeah, it makes sense.
0:53:05How is that going to factor in for the way they market and push the product?
0:53:09Who knows?
0:53:10But what we do know is if you were fed up of paying for things in September, well, sorry.
0:53:15It's another thing to pay for every September.
0:53:17Yeah, you're going to be paying a lot of money in September.
0:53:20So I think one of the things that we're going to see is that the iPhone and the Apple Watch
0:53:24will always be unveiled together.
0:53:27And I think what that's going to do is as Apple is struggling to find new things for
0:53:31the iPhone to do, they will be able to say new things that those products together do
0:53:36as marketing.
0:53:37Oh yeah, that's a good idea. Especially when the Apple Watch will gain independence from
0:53:44the iPhone, they will be able to focus, I guess, instead of technologies to make the
0:53:50watch work as an accessory, when the watch is independent from the phone, they can just
0:53:55work together. They can do stuff together, they can be faster, communicate faster, do
0:53:59things together with sensors and stuff. So I think we're going to see, I mean the Apple
0:54:06Watch makes sense as a holiday gift. You know, I've heard from a lot of people buying Apple
0:54:11Watch sport models for their families, you know, their significant others, so it makes
0:54:17sense to me to have it be a seasonal kind of product. What's interesting to me is the
0:54:24The App Store revenue being up 35% and the way that it said Apple Music, which is our
0:54:30first subscription service, crossed 13 million paying customers.
0:54:36Why do you think it said first?
0:54:38Because they will do more of them.
0:54:40One of the ways that you make more money is selling to your existing customer base.
0:54:47They have millions, tens of millions of iPhone customers.
0:54:52Sell them subscriptions.
0:54:53There's gonna be other stuff, whether it's gonna be TV or apps, they'll do other subscription
0:54:59services.
0:55:01Because look, Apple Music, 13 million, that's pretty good, because lots of people don't
0:55:09like it.
0:55:10And it's in a market that Apple were really late to, and quite frankly, in a lot of ways,
0:55:14they have a worse product.
0:55:17But they're able to sell 13 million subscriptions because it's on the phone.
0:55:23Now Apple, if they continue to go down this road, might bump up against the European Union
0:55:28and this is something that they're going to need to consider because the European Union
0:55:32gets very upset about things like this.
0:55:35But I think that as time goes on, Apple will continue.
0:55:38I mean, there's so much TV stuff that they're talking about, right?
0:55:42Like I think that these shows are not going to appear in Apple Music.
0:55:46They will be an Apple TV thing, but you'll be able to also watch it on iOS devices.
0:55:51I believe that the subscription service that they bring out for the Apple TV will not just
0:55:56be on the Apple TV.
0:55:57It will be an Apple TV like they'll call it something else.
0:56:00I don't know like Apple, how's it gonna call it Apple Watch?
0:56:03No you can't do that.
0:56:04That name's taken.
0:56:05But you know like it will be like a video service.
0:56:07It'll probably be Apple Video, right?
0:56:09And you'll be able to watch their own unique programming and blah blah blah stuff from
0:56:15Disney, you know?
0:56:17The way they've done it before, they'll have some movie stuff.
0:56:19I think that's where they're gonna go with this and it'll be another streaming service
0:56:23for them. Because look, frankly, they need to push up the revenue and one way they can
0:56:27do that is to sell things to their existing customer base. Their existing customers are
0:56:32not buying iPads, so you may as well sell them things that don't cost as much to produce.
0:56:39Digital things, content.
0:56:42Or maybe they could sell like a fitness program, subscription, people to get in better shape.
0:56:48it all. Like Weight Watchers done by Apple. Apple are looking at Amazon, right? Amazon
0:56:57do all of these things. I think that's what they're looking at. They're like, Amazon has
0:57:02found a way to tie a subscription service to everything. Now admittedly Amazon's is
0:57:09one subscription service, which I don't think Apple will do. I think that there would be
0:57:14a few different subscription services for different things, but I think that's the route
0:57:18that they will probably end up taking.
0:57:21I think so because you want to make money on existing customers, you know?
0:57:29You want to make more money out of people who are already your customers and what's
0:57:32the best way to, you know?
0:57:34If they're not buying iPhones every year from you like you want them to, have them give
0:57:38you a little bit of money every month, which is also the iPhone upgrade program, that's
0:57:41what that's all about too, you know, we were talking about that earlier.
0:57:44What I wanted to ask you, Myke, to kind of close this sort of segment, is looking at
0:57:50the future.
0:57:51So we've talked about the iPad, we don't know what Apple can do, there's a bunch of things
0:57:55Apple can do, but I guess we'll talk about it later when we do our iOS 10 episode.
0:58:03Do you think, so in addition to video subscription services, more stuff on the App Store, do
0:58:10Do you think Apple is going to place their bets on VR eventually?
0:58:14Could it be a nice, maybe money generator of course, but a nice complement to the iPhone
0:58:21as a product, to have the iPhone become the VR machine?
0:58:28I don't know.
0:58:29I don't know, I'm struggling with understanding mobile VR and how that's going to work, because
0:58:36the Gear VR works because it's an extra thing you put the phone into.
0:58:40I can't imagine how a device could have VR without you needing to put it into something
0:58:46or connect it to something.
0:58:50I think that Apple are going to be late to VR unless they surprise us in the next year.
0:58:57I don't see what they're going to do there but they should do something.
0:59:02I also don't think that as it stands right now, VR is enough of a thing to make a big
0:59:08dent.
0:59:09an Apple VR product would make about as much of a dent as an Apple Watch product.
0:59:14You think so?
0:59:15Yeah.
0:59:16Hmm.
0:59:17I really think if they eventually do VR, it'll be an iPhone thing.
0:59:21It'll be some kind of iPhone accessory or based on the iPhone.
0:59:25Just because we've talked about this on our video game show, ReMaster, but I do believe
0:59:29that eventually all VR is going to be mobile.
0:59:32It's going to be the same screen that you carry around all the time.
0:59:35Just because it's the right size of a screen to put in front of your eyes, and VR is going
0:59:40to be based on that.
0:59:42But that's years down the road, you know?
0:59:44Especially with Apple, they like to wait for new technologies to take off, but I do see
0:59:50VR, potentially, you know, two, three years from now, as a new kind of addition to the
0:59:56iPhone.
0:59:57I don't even know if three years from now it'll be called the iPhone, but I guess
1:00:01so.
1:00:02So that could be an idea.
1:00:04But in general, I feel like... I look at these numbers, right, and it's objective. A downtrend
1:00:13is happening, it's going to happen again, and it's not good news. And there's no way
1:00:17to spin this positively. You could say, "Well, we're doing bad now because we've done so
1:00:24much better before and it was an anomaly." But again, negative numbers are negative numbers.
1:00:29There's nothing to argue about those.
1:00:31But I do wonder, as I told you, is this Apple to blame?
1:00:38Yes, partly.
1:00:39I think Apple is to blame here.
1:00:42Especially with the iPad.
1:00:43And especially with the Apple Watch.
1:00:44I don't know what kind of impact it's having on, you know, what meeting expectations means,
1:00:50but from my perception it doesn't seem to be the kind of crazy success that the first
1:00:55iPhone was.
1:00:57But I do wonder, what can Apple do to make things better?
1:01:01And the things that I believe Apple can do will take time, will take a long time to steer
1:01:09the ship, especially with the iPad.
1:01:12So I think we're in for a long period of changes, Myke.
1:01:17And it's going to be, I'll tell you what, it's going to be fun to observe.
1:01:22It's not fun because there's people going crazy with these negative numbers and it puts
1:01:28a lot of pressure on the financial departments of Apple.
1:01:31I find it interesting.
1:01:33It's interesting.
1:01:34It's fascinating to observe.
1:01:36And I think the next couple of years really are going to be interesting with the iPhone
1:01:42upgrade program expanding to more countries, with this iPhone 7 and iPhone 8 refresh, with
1:01:48the new versions of Apple Watch with the iPad finding a new soul again, it's really fascinating
1:01:55to observe, if only from a blogger and a podcast perspective.
1:01:58If you want to catch our show notes for this week head on over to relay.fm/connected/88.
1:02:06Thanks to the lovely people over at Smile with PDF Pen Pro for supporting this week's
1:02:11show. If you want to find Federico online head on over to macstories.net and also check
1:02:17out our podcast from Remaster that we do which is all about video games at relay.fm/remaster
1:02:23and also Federico hosts a show on relay.fm about iOS productivity with Fraser Spears
1:02:30and you can find that at relay.fm/canvas. You can find me online, I am @imike, I-M-Y-K-E.
1:02:37Federico is @vittici, V-I-T-I-C-C-I. I host a bunch of other shows at relay.fm. You can
1:02:42find them at relay.fm because there's lots of them. Thank you so much for listening to
1:02:47this week's episode. Steven is at ISMH. He'll hopefully be back next week with another iMac
1:02:52in hand, fresh from the plains of San Francisco, I guess, is where you'd find them. We'll be
1:02:59back next time. Until then, say goodbye, Federico.
1:03:01>> Allez, urchie.