The Talk Show

29: The Mac Faithful, with John Moltz


00:00:00   this is the talk show with John Gruber

00:00:02   on John Gruber your host my special

00:00:04   guest this week is John Smoltz you

00:00:08   should do that again

00:00:09   do yourself an impression that's not

00:00:11   really a zelda I can't do is element

00:00:13   impression really i'm sort of just doing

00:00:15   a very like what he did is he just

00:00:17   instantly and naturally did like a very

00:00:20   professional introduction right off the

00:00:22   top of his head

00:00:23   you know I can't do it and I don't do

00:00:25   impressions and and development has such

00:00:27   a great voice my god I told me the end

00:00:28   of the show it's like like voices on

00:00:31   podcasts are like fonts for reading and

00:00:33   like his his voice font is just so great

00:00:36   it's got like this just incredibly rich

00:00:39   voice that i do not know ya sa unlike

00:00:43   both of us

00:00:46   you got the big got the big backpage

00:00:49   column and in Macworld i did this we get

00:00:51   something for it did I think its new

00:00:53   right yeah that's the februari times the

00:00:57   fairies pile up from issue which i

00:00:59   believe is the latest i always get them

00:01:01   i always get them later

00:01:02   I'm always like the last person to get

00:01:04   them for some reason and I and people I

00:01:07   get confused because I feel like here's

00:01:10   I've got two of them here in front of me

00:01:11   and the covers are very similar their

00:01:13   white covers with red macworld and fonts

00:01:17   and they both have pictures of white

00:01:18   ipods on the front one of them is

00:01:21   februari 2013 with one's November 2012

00:01:24   november two thousand six but anyway

00:01:27   it's the februari 1i like your little

00:01:28   blurb on the very nice website every

00:01:30   told people to go to the newsstand to

00:01:32   read that many wrote airport where do

00:01:35   people buy magazines i don't know where

00:01:38   do you used to be you can buy them

00:01:39   everywhere it's funny cause it made me

00:01:41   laugh though because I did realize that

00:01:42   that was thinking about i was like

00:01:44   thinking your time telling people to go

00:01:45   out and buy the magazine where the heck

00:01:47   are they gonna going to drive to the

00:01:48   airport if I if I didn't have a

00:01:51   subscription in that world i'm not sure

00:01:53   where I would go

00:01:54   yeah addicts barnes and noble I can't

00:01:56   think what magazine yeah i mean those

00:01:57   places do but bars closed

00:02:00   we're borders and close so in into coma

00:02:04   I don't think I mean other than used was

00:02:06   a great used bookstores but other than

00:02:07   used bookstores we can't buy a book now

00:02:11   there's no use magazine stores

00:02:12   yeah Peter like that i think about it

00:02:16   yesterday the moments are that is Yeah

00:02:18   Yeah right student like you don't want

00:02:20   to ask for you don't want to go there

00:02:21   don't go into those places but the DJ

00:02:26   it's funny though because your column on

00:02:28   this was this the februari 2013 issue

00:02:30   America and it's not online yet is that

00:02:32   right yeah I always get so confused when

00:02:33   I don't even do they even but what right

00:02:35   what goes on light when I don't know

00:02:38   what the deal is frankly what I don't

00:02:40   think your thing is it online though is

00:02:41   not now i know i'm almost positive that

00:02:44   it is not i look forward to and and but

00:02:47   it's I think they eventually do that

00:02:48   though it's perfectly time though

00:02:50   because i feel like its it that the the

00:02:53   headline says it all why Apple drives

00:02:55   people crazy and which is which is what

00:02:57   ya a from the last time you were on the

00:03:00   show because we were I asked you about

00:03:02   it and I feel like it's really come up

00:03:04   again this week all over the place like

00:03:09   I feel like everybody don't know it's

00:03:11   like this this pre earning say because

00:03:14   what it's a week from today when apples

00:03:15   earnings coming yes

00:03:16   one week from today or winter or is it

00:03:19   wednesdays usually Wednesday or Tuesday

00:03:21   or Wednesday right well it'll be next

00:03:23   what's next what's your middle of next

00:03:24   week 17 things sometime next week either

00:03:27   wednesday or thursday i think that Apple

00:03:29   do it and I think that's part of it i

00:03:31   think it's partly because we're one week

00:03:32   out from their earnings and everybody's

00:03:34   piling on but there is there's like this

00:03:37   the the collective craziness that Apple

00:03:41   drives people to sanity and stupidity

00:03:44   and and just you know to turning off of

00:03:47   frontal lobe is it i get a peek forever

00:03:50   I feel this week I maybe i'm just

00:03:52   sensitive to it maybe it's a wonderful

00:03:54   start looking for that I completely

00:03:55   right

00:03:56   I think just just craziness that our

00:03:58   craziness but I don't want to ask you to

00:04:02   do a a reading of your column but what

00:04:06   is that can you restate it though can

00:04:07   you give the gist of it of your argument

00:04:10   of what drives what about Apple drives

00:04:12   people crazy

00:04:13   well and I feel like they're there's a

00:04:16   lot of reasons that going to and there's

00:04:17   a lot of things that factors that go

00:04:19   into this and I was only able to because

00:04:20   of because of the size constraints of

00:04:23   the back page only able to go into some

00:04:26   of them but a lot of it was one of the

00:04:31   factors i talked about was this sort of

00:04:33   checklist mentality that people to

00:04:34   understand apples product development

00:04:36   process and they sort of apply the same

00:04:40   view that they would to any other

00:04:43   product any other product category coke

00:04:45   pepsi when I mean soda cars anything and

00:04:49   they the easiest way to evaluate stuff

00:04:51   is just to have a checklist which is

00:04:52   kind of what places like consumer

00:04:55   reports use and a lot of the technology

00:04:57   sites use to do evaluation of products

00:05:00   because it's just easier that way and so

00:05:01   they have this checklist mentality and

00:05:03   they go down the checklist and apple

00:05:04   products often don't mean they're not

00:05:06   they're not built that way they're built

00:05:09   for fit and finish and design and and

00:05:11   many other factors that don't easily

00:05:12   lend themselves to be evaluated by a

00:05:14   checklist process and so these guys go

00:05:17   through and they mostly guys and they

00:05:20   say you know the samsung device better

00:05:24   because it's got a bigger screen or it's

00:05:25   got its got a projector and it and which

00:05:29   is which is it that is true it is there

00:05:31   is a phone out with a little and

00:05:33   projector which i think is just utter

00:05:35   madness but there is there is something

00:05:38   that you can check off on a list and

00:05:39   apple will never have a phone with a

00:05:41   projector in it so they give more checks

00:05:46   to the samsung device and apples device

00:05:48   gets fewer and so they say the samsung

00:05:50   device 1 and then what happens is mac

00:05:54   users of Apple fans get into the

00:05:57   comments and start screaming loudly that

00:05:59   they don't understand what they're a

00:06:00   bunch of idiots and and this starts this

00:06:03   sort of feedback loop for insanity where

00:06:05   these people think that we're all

00:06:06   completely unreasonable because you know

00:06:08   they're fully scientific process as

00:06:11   determined that the samsung devices

00:06:13   better and with it so therefore they try

00:06:15   and come up with an explanation for why

00:06:17   are we so so bent out of shape about

00:06:21   this and they're only explanation that

00:06:23   they can come up with is that it's a

00:06:24   religion that's there been one of its

00:06:28   and never gets old happened to never do

00:06:30   I really never detect effort is well and

00:06:34   I'm part of it too is in its it's that

00:06:36   the the

00:06:36   f-word faithful yeah yeah yeahs the

00:06:39   Apple faithful or sometimes I still see

00:06:42   I just saw yesterday and it's one of

00:06:44   those things where I never know where

00:06:44   there is linked to it and throw traffic

00:06:47   at this crap just to make a joke or just

00:06:50   let it slide but I let it slide but it

00:06:51   was an argument and and the the gist of

00:06:54   it was that the people who buy output

00:06:56   all apple products are you know the the

00:06:59   religious fervor to fuck but they called

00:07:01   him the mac faithful it's the mac

00:07:03   faithful who are buying the iphones and

00:07:05   ipads and macs when when you know you

00:07:08   just took 35 number 35 million and a

00:07:11   quarter i mean yeah right

00:07:13   15 minute they're expecting to sell 50

00:07:16   million iphones in the last three months

00:07:17   alone when they report their numbers

00:07:19   next week and maintenance the matter

00:07:21   where there is a little bit higher a

00:07:22   little bit lower it's not going to be

00:07:23   too far away from 50 million they don't

00:07:25   sell 50 million max you know it sounds

00:07:28   crazy like the whole idea that there's

00:07:30   an apple faithful and that's who they

00:07:31   sell to is wrongheaded nuts too but i

00:07:34   think that that they still toss around

00:07:36   the term Mac faithful to describe them

00:07:38   shows just how burned into their lizard

00:07:45   brains this this this view of Apple is

00:07:48   ya know i think i was with you the last

00:07:51   time ri-ight I put it in context of like

00:07:55   first impressions and that people's

00:07:57   brains like were evolutionarily wired to

00:08:00   make first impression or not even first

00:08:02   impressions but you know initial

00:08:04   impressions of people and people don't

00:08:06   really change that much overtime and so

00:08:08   we're just not wired to change our mind

00:08:11   about something or thing you know and

00:08:14   evolutionary there's no reason to to

00:08:17   really have a conception of a

00:08:19   corporation because there weren't any

00:08:20   but I i think our brains are just you

00:08:23   know we treat them the same way we have

00:08:25   emotional the way they have an emotional

00:08:27   response to a person you have an

00:08:28   emotional response to companies and that

00:08:30   I think it's a lost a lot of people who

00:08:33   formed their view of apple in the

00:08:35   nineties one of ya know the company was

00:08:38   in trouble and it looked like you could

00:08:41   really make the argument that their

00:08:42   basic strategy of of controlling the

00:08:46   whole experience doing the software

00:08:48   doing the hard

00:08:49   we're doing things their own way that

00:08:52   you could you know reasonably make a

00:08:54   data back argument then that it was

00:08:56   that's the wrong way to go and that

00:08:57   doesn't work and that the other way the

00:08:59   the pc way the open way of using you

00:09:02   know Microsoft operating system and

00:09:05   having a whole ecosystem of crazy you

00:09:07   know configurations of hardware that's

00:09:09   the way to go

00:09:10   when you can back that up there and I

00:09:12   feel people burn that into their mind

00:09:14   that Apple is stubborn and wrong and a

00:09:17   niche and designs for thuy design

00:09:21   aficionados and it's not successful and

00:09:24   that's the way it is and everything

00:09:26   that's happened since that seems to poke

00:09:29   a hole in that they just see that as a

00:09:32   fluke you know if it that you know

00:09:34   things will right itself things will

00:09:35   right themselves yeah thnkx will right

00:09:37   themselves eventually have a cute little

00:09:38   phrase for people to this kind of

00:09:40   thought process which is people cutting

00:09:44   themselves on Occam's razor because they

00:09:46   it's a simple explanation and usually

00:09:50   you know they say that simple

00:09:51   explanation is usually the right one

00:09:53   when it's not really i mean it's not

00:09:54   true in all cases and that's not true in

00:09:56   this case and there's the the idea that

00:09:59   the mobile landscape is exactly the same

00:10:02   as the pc landscape was and then in the

00:10:04   nineties is not it's really not the case

00:10:06   at all

00:10:07   there are certain similarities but it

00:10:11   yes definitely to say that it's playing

00:10:13   it's going to play out exactly the same

00:10:14   as just wrong it well and here's the

00:10:17   other thing I keep coming back to and I

00:10:18   feel like I should

00:10:19   this is that this is an idea that I

00:10:21   could expand into it pretty good article

00:10:22   maybe hang out i want to i want to take

00:10:26   that take that down i want to get this

00:10:27   down so i can just dealing primarily

00:10:29   with people worrying about today is iOS

00:10:31   its phones and the tablet and then when

00:10:33   they say that Apple is going to run into

00:10:34   the same problem that they did before

00:10:35   its basic argument that android is the

00:10:38   new windows and iOS is the new mac and

00:10:41   what happened to apple with a mac

00:10:43   against windows in the nineties is

00:10:45   repeating itself now but its Android and

00:10:47   Google instead of microsoft windows and

00:10:52   there's a couple of problems with that

00:10:54   1i Apple back in the nineties with the

00:10:58   mac never ever ever had this sort of

00:11:00   success that they haven't

00:11:02   out with iOS in terms of the millions of

00:11:05   users and brand awareness they didn't

00:11:08   have the retail presence because i

00:11:09   didn't even have retail stores even so

00:11:11   many things that are different right

00:11:12   they were not the world's most

00:11:13   profitable company at some point you

00:11:15   know when the mac was at its peak and

00:11:18   windows 95 hadn't come out yet they

00:11:20   weren't the most claiming they were

00:11:21   doing better than they were in those

00:11:23   dark years of 96 97 98 but they were

00:11:26   never the world's most profitable

00:11:27   company they were never the biggest pc

00:11:29   seller they never had hit you know

00:11:32   marketshare like they have with the ipad

00:11:34   tablets none of these things retro but i

00:11:36   would just say I would push all that

00:11:38   aside and and just go back and just

00:11:40   revisit the idea that something actually

00:11:41   went wrong for apple in the pc industry

00:11:44   they did have a couple of bad years but

00:11:46   they were had really bad management at

00:11:48   that right i just look at I mean look at

00:11:51   where the mac is today as 25 or 26

00:11:55   consecutive quarters of outgrowing the

00:11:57   pc industry as a whole

00:11:59   right like and it's very profitable I

00:12:02   like did Apple actually lose the pc Wars

00:12:05   yeah I mean I don't even see the

00:12:07   argument of that right you know that

00:12:08   they're yes there were a couple of years

00:12:10   where things were bad but in hindsight

00:12:11   and given the stability that that's

00:12:14   happened in the last 15 years with the

00:12:16   mac guy

00:12:18   how can you argue that they even lost

00:12:19   that if you add the ipad and now as

00:12:22   right consider that a computer is

00:12:25   there's you can't really say that I i

00:12:28   think and i think it let's just call the

00:12:29   pc industry let's let's separate the

00:12:31   ipad from right let's say that that's

00:12:33   post-pc and let's say the pc industry is

00:12:36   what we thought let's draw the line at

00:12:38   2007 and say before the iphone what we

00:12:41   thought of is the pc in this just tops

00:12:42   and lastly my laptop's running windows

00:12:45   or mac or linux and you know keyboards

00:12:49   and mice and pointers that that type of

00:12:51   thing i would guess that if you

00:12:54   separated out apples profits i'm in fact

00:12:57   I don't even think i have to guess i'm

00:12:59   almost certain that Microsoft is still

00:13:02   the most profitable pc company that the

00:13:05   microsoft makes more profits from what

00:13:08   that definition i just made of pcs than

00:13:11   apple and maybe Intel makes makes the

00:13:15   sex

00:13:15   the most i don't know but Apple

00:13:17   certainly makes a lot and i'm pretty

00:13:19   sure that they make more profit than any

00:13:21   other company that makes pc hardware

00:13:23   that they make more profit on it than HP

00:13:26   or any of those companies it's certainly

00:13:30   a very good interesting that nobody yet

00:13:31   I feel like there's still this

00:13:32   assumption that Apple Apple screwed the

00:13:34   pooch with pcs in the ninth year it's

00:13:38   interesting that nobody's done that that

00:13:40   you don't see somebody I mean everybody

00:13:42   focuses focuses so much on mobile right

00:13:44   now that nobody really is are you having

00:13:47   that argument anymore

00:13:48   no and I feel like it the time to make

00:13:51   it is fading too because the pc industry

00:13:54   is shrinking and now that it's shrinking

00:13:56   I mean like I I kind of Miss spoke just

00:13:59   before going on the air here i posted

00:14:02   the thing about about apple and what why

00:14:04   is Apple expected that was a argument

00:14:06   from some woman that Apple needs to

00:14:08   introduce something new and I just did a

00:14:11   brief piece and I just said well why

00:14:12   does Apple need to do something when

00:14:13   they the things that they've already got

00:14:15   all profitable the mac ipad and iphone

00:14:18   all profitable and growing and somebody

00:14:20   pointed out that the Mac isn't actually

00:14:21   growing anymore I feel like quarter

00:14:24   quarter sales might even be down a

00:14:25   little bit

00:14:27   I what I was thinking was that they're

00:14:30   still growing

00:14:31   it's still outpacing the npc industry as

00:14:33   a whole it's just that the pc industry

00:14:35   as a whole is starting to shrink so fast

00:14:37   that even with the mac doing well

00:14:40   relative to all other pcs it's still

00:14:42   actually shrinking quarter-to-quarter

00:14:44   but that's all it's actually you know

00:14:45   it's one of those like nice problem to

00:14:48   have because it's all about the ipad so

00:14:50   because so many fewer laptops are being

00:14:52   sold because people are buying ipads

00:14:53   right at I I want and I wanted to talk

00:14:57   to you about that I wanted to discuss

00:14:59   that as well as that which you had it

00:15:01   yeah i was just looking up the mac unit

00:15:02   sales numbers and there up there up

00:15:07   year-over-year but just barely

00:15:12   yeah it's close it's you know it's yes

00:15:15   it would be tough to say growing anymore

00:15:17   yet they're still strong and compared to

00:15:19   their historical knowledge they are they

00:15:21   are they are literally growing its its

00:15:23   but they'll have to have a pretty good

00:15:24   quarter to be I think they would do it i

00:15:26   think they do they are still growing but

00:15:28   it's not by

00:15:29   it's not a lot that's not right now and

00:15:31   they maybe maybe these numbers for this

00:15:33   last quarter will be pretty good because

00:15:35   they introduced a couple of new yeah you

00:15:37   know they had new imacs and they shipped

00:15:41   ladies I don't know I wonder how my

00:15:42   brother sure if the third i don't i

00:15:44   guess the 13-inch macbook pros their

00:15:46   best-selling laptop I don't know that my

00:15:49   lady might wanna think the answer retina

00:15:51   or at least you can get ready at the

00:15:53   animal mind if they might have a really

00:15:54   good number

00:15:55   yeah for for max you know anybody who

00:15:57   was holding out on a new imac god forbid

00:16:00   anybody wait until next week to find out

00:16:02   we should also know you're not a nobody

00:16:04   that it actually won't show up in the

00:16:06   quarterly results so because like the

00:16:07   imac didn't just another thing of

00:16:09   december so maybe they didn't yeah maybe

00:16:11   they're it wasn't because it wasn't

00:16:13   available the whole quarter maybe it

00:16:14   will be this next quarter where we'll

00:16:15   see you know that spike from the new the

00:16:18   new introduction yeah with the holiday

00:16:19   quarter usually does better than yeah

00:16:22   regardless you know computers at didn't

00:16:24   maybe it's not it's it's kind of a

00:16:26   big-ticket christmas gift but it still

00:16:27   is the sort of thing that people will

00:16:29   buy and call it a Christmas game

00:16:31   I'm but the thing that I think about

00:16:33   that I would i think is that it's fine

00:16:38   for them to go along for a while and

00:16:39   just and just try and ride the growth of

00:16:41   these existing products but eventually

00:16:43   the Apple that we know is more about

00:16:47   going into new markets and reinventing a

00:16:49   new market and staking out the high-end

00:16:53   and selling you know scooping up all the

00:16:55   profit and leaving the low end for

00:16:58   everybody else right and I'm certainly

00:17:01   not arguing that they never need to

00:17:02   introduce something a major new

00:17:04   disruption right I I just think though

00:17:06   that it's that it's goofy to say they

00:17:08   needed a media and that's the thing they

00:17:10   need that's the other right there's a

00:17:11   big difference between they need a major

00:17:13   new disruption eventually vs they need a

00:17:16   major new disruption now right now right

00:17:19   and that's something else I think I

00:17:20   touched on that and that column is that

00:17:22   the there's this myth that Apple under

00:17:27   steve jobs turned out and I think we've

00:17:29   talked about this before but turned out

00:17:30   a groundbreaking product pretty much

00:17:32   every quarter which is right in not

00:17:34   always gotta work yeah every single time

00:17:37   the guy came onstage sheet obliterated

00:17:39   and indeed

00:17:40   and Tim Cook still has a right and it's

00:17:43   been a whole year and Tim Cook stores

00:17:45   hasn't done it but if you know they they

00:17:48   did you could say the imac was

00:17:50   groundbreaking I guess even though the

00:17:53   operating system was exactly the same as

00:17:55   the previous operating system and so

00:17:58   they did the imac they did the ipod

00:18:00   three years later and then they did the

00:18:06   iphone 6 years after the ipod write

00:18:12   something like that right which is way

00:18:14   longer than the scope of period we're

00:18:16   looking at right now from the a brief

00:18:19   everybody points to the original iPad in

00:18:22   2012 10

00:18:25   yeah so that's what get we're coming

00:18:26   close to about three years we still have

00:18:28   it should hit the bare minimum for

00:18:31   coming up with something new

00:18:33   alright so and as somebody one of the

00:18:36   things i linked to recently said I think

00:18:38   it was this piece from harvard business

00:18:39   review by dim pelota who made the exact

00:18:42   same point you just did that they went

00:18:43   six years without a disruption under

00:18:45   steve jobs between the ipod and an

00:18:49   iphone is that when the ipad came out

00:18:54   with everybody now hails as the thing

00:18:55   that they need to do something like that

00:18:57   again a lot of these same people said

00:18:59   that just a big ipod 2g iphone that they

00:19:02   didn't even count it when it appears now

00:19:04   that's usually the hallmark I mean the

00:19:09   iphone is the the exception I've often

00:19:13   said this that it's like the holy grail

00:19:14   of Apple introductions because it was

00:19:16   the one that blew everybody away it blew

00:19:20   me away

00:19:22   you know I'd i'm assuming a blue you I

00:19:24   blew the people who get apple away and

00:19:26   it blew the people who don't get apple

00:19:27   away everybody even the people don't

00:19:29   understand the company were like wow

00:19:30   that's a thing

00:19:31   yeah that's amazing what why don't you

00:19:34   do that everything that was that was my

00:19:35   first mac world was that one but and so

00:19:39   I remember I kept saying I might've been

00:19:42   sitting next to yeah right over today to

00:19:44   glen freshman at the time and I think

00:19:45   this is that are they all like that's it

00:19:47   this is amazing

00:19:52   I that was the one where everybody

00:19:55   recognized it but all the other ones

00:19:57   usually are met like it's a good sign

00:19:59   that Apple's on something if it's

00:20:01   greeted with a collective man yeah

00:20:04   you're right it's getting I've kind of

00:20:08   pity the guy because I feel like it's

00:20:09   gonna go on his tombstone that you know

00:20:11   commander tacos famous slashdot reaction

00:20:14   that original ipod that wasn't apple

00:20:17   releases ipod this is from slashdot

00:20:19   october2013 2001 and here's here's what

00:20:22   commander talking road no wireless less

00:20:25   space than a nomad no man named better

00:20:29   than I remember

00:20:30   let him also he didn't capitalize no

00:20:33   matter I feel like there's like a sort

00:20:37   of disdain to that you have a giant

00:20:41   apple stuff is good

00:20:44   did you have an mp3 player before the

00:20:45   ipod yes I did not Amy Amy had a 30

00:20:52   something or another that's what I had

00:20:54   to and it was a flash-based job yeah and

00:20:57   it held ten songs 11 if you pick the

00:21:01   right song right so it was cool in the

00:21:07   sense like that if you are used to the

00:21:11   song restrictions of a CD or a tape you

00:21:15   know where you could have about one

00:21:16   album worth you could do it and it was

00:21:18   this device that was way lighter you

00:21:21   know then a the spinning disc player and

00:21:23   smaller and didn't you never had to

00:21:26   worry about jostling it and having it

00:21:30   skip or something like that but in

00:21:32   hindsight it was a collective

00:21:33   pain-in-the-ass where if you're sick of

00:21:35   the tents on Iran he had like connected

00:21:37   to your man it was but indicated i think

00:21:39   it you sound jam yeah yeah yeah but what

00:21:42   she used to manage right that's what I

00:21:43   did too and at the time i got it just

00:21:45   before going to Tokyo my wife and I

00:21:48   spent three months in tokyo i was

00:21:49   working working there and it was it was

00:21:53   actually I mean for me it was pretty

00:21:54   good because it was like it was like a

00:21:56   shuffle was like an iPod shuffle because

00:21:58   you just loaded up with a few saw

00:22:01   you know what obviously more size

00:22:04   constraint but I it i had a like a

00:22:07   20-minute commute and it was it was

00:22:11   perfect but you know it was funny the

00:22:16   interface was so bad that i really do

00:22:18   think no joke it was harder to find a

00:22:20   specific song even though there were

00:22:22   only ten or eleven songs total that down

00:22:24   and I ipod yet you might have loaded was

00:22:27   useless i'm at the interface for it was

00:22:29   it was useless which is something that

00:22:31   Apple rightly recognized there's no

00:22:33   point in having the screen are you know

00:22:35   what the songs are my hand right it

00:22:37   shouldn't you're gonna play them at a

00:22:39   random is going to land a random order

00:22:40   great probably just made it worse right

00:22:43   and it also comes to that thing it also

00:22:45   gets to the point that Syracuse i made

00:22:47   this week in an article about companies

00:22:50   you know that the the software being the

00:22:52   weak lincoln in all of these hardware

00:22:54   products at CES like you know and that's

00:22:57   the what was wrong with all the mp3

00:22:59   players before the ipod was their

00:23:01   software i mean the did the interface it

00:23:03   was just horrendous and this is what is

00:23:06   what i don't understand about this cheap

00:23:08   iphone thing it is the way Apple made

00:23:11   cheap ipods is by stripping out features

00:23:14   and making a better more restricted

00:23:16   device that just did less but did it

00:23:20   really well and easily and i don't see

00:23:23   how they're going to be able to do that

00:23:25   with an iphone you can't strip out the

00:23:28   platform you can't have one that's just

00:23:31   a phone so what exactly area removing it

00:23:37   and it seems like they're they're going

00:23:39   with this

00:23:40   you know to date they just been going

00:23:41   with this last year's model thing right

00:23:45   and how are they in and I don't

00:23:46   understand if they're going to do that

00:23:48   there's an intellectual laziness to the

00:23:51   argument this this

00:23:52   oh yes finally they're doing they're

00:23:54   going to make a cheap iPhone you know

00:23:56   and it's it's the same people who think

00:23:59   that that's good

00:24:01   welcome and good news you know but

00:24:03   they're their arguments in favor of it

00:24:05   are intellectually so lazy it really all

00:24:07   comes down to what I call that the

00:24:09   Church of market area it's just this

00:24:11   religious fervor

00:24:13   that market shares the most important

00:24:15   thing and anything that's a move for

00:24:17   market share is good in anything that

00:24:20   doesn't help your market share is bad

00:24:22   regardless of things like profitability

00:24:24   or consumer loyalty or building out the

00:24:29   platform in the same way from a

00:24:31   developer's perspective

00:24:32   none of that matters all that matters is

00:24:34   if they sold an iphone cheaper they gain

00:24:36   market share

00:24:37   it's john sculley says that you

00:24:39   shouldn't of itself that's it it's so

00:24:40   facto it would be good for apple and if

00:24:42   they don't do it it's bad and john

00:24:44   skelly says you should do it you should

00:24:45   not do it

00:24:46   what way I didn't read this goalie thing

00:24:49   that i have an opening basically say he

00:24:51   is well as point was that they should

00:24:53   make a small but I'm gonna cheaper

00:24:55   iPhone to do just that you know and

00:24:59   Scully is awesome so I know that he has

00:25:01   a thing i didn't read it yet but he gets

00:25:03   he's getting a bad rap because he he he

00:25:05   Apple we didn't leave Apple in too bad a

00:25:07   shape you know in the Newton thing

00:25:09   didn't work out but boy he was sure was

00:25:12   close to a thing you know I mean it's I

00:25:16   just think he's but his business

00:25:17   management is poorly suited to apples

00:25:22   strength right but if I were him that

00:25:25   said that if you know even given any

00:25:27   left the company in pretty good shape

00:25:28   and it was really Michael Spindler his

00:25:30   successor who ran the company into the

00:25:31   ground

00:25:32   we never hear of any more I don't know

00:25:34   what I cast he's the guy I'd like to

00:25:36   hear people get it you know what do you

00:25:37   think apples i get really good answer

00:25:39   out of him but if I were Scully I boy I

00:25:41   would never ever it get near those

00:25:43   questions I just you know it that don't

00:25:47   don't don't don't know what I mean

00:25:51   you're the guy around Steve Jobs out of

00:25:53   the company don't I would like to go and

00:25:55   maybe you know and it's such a long

00:25:56   complicated thing and maybe that really

00:25:58   was good for jobs because it really made

00:26:01   him re-evaluate things he learned

00:26:02   lessons and you know you could even

00:26:05   argue that that culturally next was more

00:26:08   of like a sibling to Apple then its

00:26:11   competitor and that the reunification in

00:26:14   1998 was really more like to have that

00:26:17   never should have been separated coming

00:26:19   together but it never would have

00:26:20   happened if jobs hadn't been kicked out

00:26:23   and you know they never would have had

00:26:25   next step which turned into OS 10 and

00:26:27   blah blah blah but it in a nutshell vout

00:26:30   to Scully screwed up you know anybody

00:26:33   like I feel like he should just say

00:26:34   not one nice sentence about apple and

00:26:37   and say I you know but I'm not going to

00:26:39   comment on our manager yeah it's like

00:26:40   it's like talking about an old

00:26:42   girlfriend right here it's like what was

00:26:45   his name Pete best talking about beetles

00:26:47   out

00:26:48   yeah you know what I mean like ghetto

00:26:51   given a critique of you know what was

00:26:53   wrong with the white album you know what

00:26:54   Pete best is doesn't do that and that

00:26:56   for a good reason

00:26:58   talking about management old management

00:26:59   of apple i would like to go back and

00:27:00   look at I haven't done this recently and

00:27:03   I don't know if there's a concise place

00:27:04   to look at this but what the product mix

00:27:07   looked like when jobs or when Emilio

00:27:10   took over because they had all those ink

00:27:15   and if you included the clones

00:27:18   well I mean most of it was just a mess

00:27:21   yeah it really was what yeah because it

00:27:25   did clones were in place before Emilio

00:27:28   came in right right Amelia wasn't there

00:27:31   that long now only there for like was it

00:27:32   less than a year maybe a year he gets a

00:27:35   dee gets a bad rap too because he'd

00:27:38   actually did a pretty good job

00:27:40   I mean he didn't he didn't introduce

00:27:44   anything new to fix the company but he

00:27:47   stopped a lot of he stopped a lot of the

00:27:50   bleeding yeah you know it was like a

00:27:51   triage surgeon you know I mean like an

00:27:54   ER doctor who came in and yeah and at

00:27:57   least fixed the stuff that was awful and

00:27:59   then it was up two jobs to come in and

00:28:01   and you know get some new stuff that was

00:28:05   going to you know turn it around yeah

00:28:06   but I yeah I would love to see like one

00:28:09   of the way I could just see it as one of

00:28:11   those things like on a tumblr site like

00:28:12   one of those posters but yeah and

00:28:14   instead of just like all apple products

00:28:16   in history just what was the product

00:28:18   lineup like in the summer and 96 right

00:28:21   did you will do what did you on back

00:28:24   then I had a a powermac 9600 which was

00:28:32   an incredible fish

00:28:33   and at the time and I somehow i think it

00:28:36   was a machine that like de beauté at

00:28:39   like four or five grand and it somehow

00:28:45   quickly got superseded i forget what

00:28:48   happened a lot but I got it brand-new

00:28:51   right after like the next thing and come

00:28:54   out and I got it for like twenty one

00:28:56   hundred dollars so so it is like six

00:28:59   months earlier it was like 40 it was

00:29:01   retailing for like 4500 and i got it for

00:29:03   2100 and use it for years it was one of

00:29:07   my one of the best computers i brung ya

00:29:09   I I performance 6400 which is widely

00:29:14   considered a road Apple but i really

00:29:19   liked that I really liked it it had

00:29:22   argued that the power was it a Power

00:29:24   Move was my thing called a parent

00:29:25   alright yeah yeah I could it would have

00:29:27   probably probably would again but a

00:29:28   pretty sure that it was a was only still

00:29:31   making always a 96 hardly swimming

00:29:32   cuadras now it wasn't a quadrant because

00:29:36   it was wasn't quadra a Quadra wasn't

00:29:39   powerpc and the locators powerpc right

00:29:42   okay i think there was power million and

00:29:45   I remember specifically that was in 9600

00:29:47   because i named my hard drive like how

00:29:49   9600 my hard drive icon on that machine

00:29:52   was how icon so I thought you know it's

00:29:56   9600 and how was the how 9000 you know

00:29:59   obvious obvious way to name your

00:30:01   computer

00:30:02   did you use a kaleidoscope and lots of

00:30:05   icon packs and I that's a great question

00:30:09   i did on and off for years

00:30:12   yeah I a kaleidoscope I didn't really

00:30:16   get into but i did use because I feel

00:30:18   like when collaborate on kaleidoscope

00:30:19   came out i had outgrown that right what

00:30:22   I had what I remember using was it

00:30:27   called Aaron maybe there was that we had

00:30:30   and it was by the guy who eventually

00:30:31   went on to make kaleidoscope with

00:30:33   somebody else but it was Aaron and he

00:30:35   also had one it was just an extension

00:30:37   you dropped in your folder and it

00:30:38   changed the look and feel of your

00:30:40   windows to look like any of this

00:30:45   this is crazy part is that Apple had

00:30:47   purposefully seated like to Macworld mac

00:30:50   user screenshots of the next generation

00:30:53   mac OS the copeland and whatever the

00:30:56   other Gershwin whatever the hell they're

00:30:57   coming out with and they were like

00:30:59   here's what it's going to look like like

00:31:01   the heck they were like so desperate for

00:31:03   publicity and and they're so stagnant on

00:31:06   the OS is that the key people excited

00:31:07   they revealed like two years in advance

00:31:10   what everything was going to look like

00:31:12   and so this guy was in Greg land weber

00:31:15   made extension called Aaron which gave

00:31:19   you that look and feel right now I think

00:31:22   I was like ten dollars shareware or

00:31:23   something yeah and then he came out with

00:31:25   one I forgot what it was called but it

00:31:27   did the same thing but made the mac look

00:31:28   like the BOS with the yellow tab style

00:31:32   windows right around that for a while

00:31:34   yeah but like I said I'd like you said i

00:31:36   think it's it's it's a niche that you

00:31:38   you get for a while and then once you've

00:31:41   scratched it you're done yeah all of a

00:31:43   sudden you feel silly yeah maybe it's an

00:31:45   age or maybe it's an agent of personal

00:31:47   yeah cost players i haven't had an

00:31:52   awesome time a lot of hydrogen i got

00:31:53   like that i don't know i always thought

00:31:56   that especially in those days with the

00:31:58   system extensions that the the curve for

00:32:02   power users was that as you got more and

00:32:04   more into your mac as an enthusiast in a

00:32:07   geek and someone who's just into it

00:32:09   you added more and more extensions and

00:32:11   when you you know for those of you who

00:32:12   don't remember when you booted your mac

00:32:14   in those days each system extension you

00:32:17   had would put a little icon up at the

00:32:18   bottom of the screen and you get this

00:32:20   usually would just go across one row but

00:32:22   if you were like really into it you get

00:32:23   two rows and if you really loaded your

00:32:25   system up with extensions you know you

00:32:26   get the third row or even a fourth row

00:32:28   and you can measure how much of a nerd

00:32:30   you were by how many rows of those icons

00:32:32   you got when you started your computer

00:32:34   but i always thought that when you got

00:32:35   to a certain point that it was like a

00:32:37   bell curve and it started going down the

00:32:39   other way and the people who really knew

00:32:41   the mac and really got into it ran with

00:32:43   his few extensions as possible because

00:32:46   there was always that that sense of

00:32:47   dread that it would stop as it was

00:32:51   loading because it was happens sometimes

00:32:53   yeah that that you'd be doing it and one

00:32:56   of the icons and come out and it was

00:32:57   just operate

00:32:58   which is the operating system which is

00:33:00   lockout while we're booting because

00:33:02   you've got the conflict i know i've

00:33:05   talked about this probably with dan on

00:33:07   old talk show but like one of the like

00:33:10   greatest software one of the greatest

00:33:13   apps in the history of mac OS was

00:33:15   content Hatcher yea which was a program

00:33:18   whose entire point was defined and help

00:33:21   you find and identify conflicts between

00:33:23   system extensions and identify them and

00:33:26   then you could have like you know if

00:33:28   extension a witch made your cursor turn

00:33:32   into a Snoopy dog when instead of a

00:33:35   watch on you were waiting for something

00:33:36   conflicted with the extension be which

00:33:41   gave you like a system-wide applescript

00:33:43   menu or something like that you could

00:33:45   like set presets and say ok when i'm

00:33:47   running this extension I'm not running

00:33:49   this one and when i'm running the other

00:33:50   one I'm not running this one and you

00:33:51   could like switch between them when you

00:33:52   started up and that the app I just

00:33:55   remember it's like you know it's like if

00:33:57   what were they doing that the app was

00:33:59   written by Jeff Robin who went on to

00:34:02   write sound jam which you may have heard

00:34:03   of is now called items and he still at

00:34:05   apple always really ok now because he

00:34:09   still does the demos he did the demo of

00:34:10   itunes a lot of how he still in charge

00:34:14   of itunes but conflict catches a huge

00:34:18   hit and it's just funny and hindsight

00:34:20   that it was necessary because we're

00:34:22   running these things do they eventually

00:34:24   well they made they made their own right

00:34:26   they made some sort of contract but i

00:34:29   wasn't i wasn't nearly as powerful I

00:34:31   don't like you could do it manually but

00:34:32   you couldn't save sets or something like

00:34:34   that

00:34:35   yes happen well the gist of it though is

00:34:38   that a you know ultimately long-term

00:34:41   they needed to move this something like

00:34:43   Mac os10 with a modern architecture

00:34:45   where one process isn't going to hang

00:34:48   the weather it's an extension or

00:34:49   whatever isn't going to hang your whole

00:34:51   computer but like the people who used to

00:34:54   complain about their max locking up

00:34:56   inevitably had like four rows of system

00:34:58   extensions and they were all using you

00:35:00   know api's that weren't meant to be used

00:35:02   by third-party developers whereas if you

00:35:04   just stuck to what apple gave uses ran

00:35:06   the stock OS it was very very

00:35:09   liable and and it was pretty hard dude

00:35:11   to do that though there were so many I

00:35:14   mean developers just began to ship those

00:35:15   things like crazy and and you get a new

00:35:18   you get a new box set of software and it

00:35:20   would install 15 extensions right

00:35:25   everything was an extension man you

00:35:27   needed like Adobe tight man just a

00:35:28   render PostScript fonts you needed an

00:35:30   extension from Adobe ATM adobe type

00:35:34   manager and you had the name adobe type

00:35:36   managers is we really have two weeks

00:35:38   here but remember you had the name adobe

00:35:40   type manager with the tilde oh yeah

00:35:42   there's have until the ATM because it

00:35:44   had a load last because if I don't even

00:35:47   know why but you had to make sure it

00:35:48   loaded last night loaded in alphabetical

00:35:50   order until the sorted to the bottom

00:35:53   whereas most punctuation characters

00:35:55   sorted to the top before the letters and

00:35:58   so is tilde ATM I don't miss that

00:36:02   no I don't miss that at all which was

00:36:04   sort of the one with thing that windows

00:36:06   I mean even as a Mac user we have to say

00:36:08   that windows 95 with protected memory

00:36:13   and none of that stuff was was actually

00:36:15   an improvement we would bitch about the

00:36:17   look and feel and how it was all stolen

00:36:19   from yeah there was your final actually

00:36:23   had only a stable mac that was

00:36:25   antithetical to apples the the way

00:36:29   things ought to it ran you know that you

00:36:31   really did have to be it's almost the

00:36:34   it's almost a complete polar opposite of

00:36:36   the appstore mindset where the appstore

00:36:38   mindset is look we vetted this stuff and

00:36:41   it's in a techno groups both two levels

00:36:44   of protection a we vetted it personally

00:36:47   before we allowed into the storm be

00:36:48   there is a sandbox that's technically

00:36:50   locks this software into an area where

00:36:53   it's not going to mess up your whole

00:36:54   system so we can't guarantee that the

00:36:56   app is going to be good but we can

00:36:58   guarantee you that it's not going to

00:36:59   you're not going to screw up your

00:37:00   computer in any way by installing

00:37:02   anything from the appstore whereas in

00:37:05   that those the nineties with the late

00:37:07   era of system 7 and system 8 you really

00:37:09   had to almost be an expert when you

00:37:11   installed anything to like make sure

00:37:13   that it wasn't going to hold your system

00:37:15   which was exactly the opposite of the

00:37:17   system seven and eight days we really

00:37:18   had to do like a before-and-after on

00:37:21   your extensions folder to make sure

00:37:22   that nothing sketchy had been stuck in

00:37:25   there and you set a new allocated memory

00:37:27   manually

00:37:29   Oh remember that that seems so

00:37:32   ridiculous as it's completely ridiculous

00:37:34   you the human being decided how much my

00:37:39   photoshop ram doubler and anyway we

00:37:45   should stop talking about that because

00:37:46   someone you know what though it doesn't

00:37:48   feel though that it does show that apple

00:37:50   yet

00:37:51   Apple was not in great shape in nineteen

00:37:53   ray six that's the point right and its

00:37:56   name anyways but I do want to talk about

00:37:59   the stock the whole stock thing

00:38:01   yeah I do but let's do it before you get

00:38:03   into the stock thing let's take a break

00:38:04   and i will do i'm going to do a sponsor

00:38:08   break yet i want to tell you about it

00:38:11   i'm going to tell you about a great new

00:38:12   app for the ipad is called infinite

00:38:15   refrigerator infinite refrigerator that

00:38:18   name is going to make total sense to you

00:38:20   as soon as I tell you what it does

00:38:21   infinite refrigerator provide you with

00:38:25   one or more personalized virtual

00:38:28   refrigerators and the ideas that you

00:38:30   make one for each of your kids and you

00:38:33   use it to display digital photos

00:38:36   pictures of artwork report cards notes

00:38:39   anything that you might put up your

00:38:42   real-life refrigerator in your kitchen

00:38:43   you can put up instead on your virtual

00:38:46   refrigerator in infinite refrigerator

00:38:49   why would you do this easy it eliminates

00:38:52   the guilt that sort of associate

00:38:53   implicit guild when you put stuff up on

00:38:56   a refrigerator and then time goes on you

00:38:58   get more pictures and you've got to take

00:39:00   the old stuff down to put the new stuff

00:39:02   up if you do an infinite refrigerator

00:39:05   instead you never have to take stuff

00:39:07   down you can just keep piling again

00:39:09   because it's a computer it can store all

00:39:11   and gives you a permanent digital home

00:39:15   for these type of mementos right photos

00:39:17   that you store on an infinite

00:39:19   refrigerator support full screen pan and

00:39:21   zoom just like the built-in Photos app

00:39:22   you can pick them from your camera roll

00:39:25   or you can take a new picture using the

00:39:27   app

00:39:30   put them up it looks like a thumbnail on

00:39:32   this little virtual fridge is a little

00:39:33   magnet tap the photo zooms to fullscreen

00:39:36   pan and zoom everything you want tap

00:39:38   again to close your back to the

00:39:40   refrigerator view you can supply a title

00:39:44   and a note for each photo you can even

00:39:45   record audio commentary or have your kid

00:39:48   record audio commentary describing the

00:39:50   photo or the picture of the image or

00:39:52   whatever it is in our own voice unlike

00:39:55   the real refrigerator in your kitchen

00:39:56   the an infinite refrigerator never

00:39:59   forget right and hanging next to each

00:40:01   infinite refrigerator is a calendar all

00:40:04   right there on screen tap the calendar

00:40:05   and you can go back in time and see what

00:40:07   the refrigerator look like before this

00:40:09   is the type of app where it's kind of

00:40:10   fun to use to keep you know to start

00:40:12   using but you're really not Yugi and you

00:40:15   can just imagine the benefits really are

00:40:17   going to come until you've been using it

00:40:18   for months or a year or even a couple of

00:40:21   years and you have a whole bunch of

00:40:23   mementos stored in this thing and then

00:40:24   you can use the calendar view to go back

00:40:26   and see what it looked like six months

00:40:28   or a year ago and just sort of page

00:40:30   through time like that bridges the whole

00:40:33   fridge the whole collage type layout

00:40:35   that you make or any individual photo

00:40:37   can be shared

00:40:38   if through the app via email I message

00:40:41   twitter facebook all the standard iOS

00:40:44   sharing stuff so how much does it cost

00:40:47   here's the deal it's an ipad app built

00:40:50   for iOS 6 download the app from the

00:40:53   appstore absolutely free free download

00:40:55   but here's the hitch you only get one

00:40:57   fridge to start with its place for blue

00:41:00   now you can make more than one of them

00:41:01   but if you want to use the other colors

00:41:03   they've got five other styles and colors

00:41:05   and fridges it's an in-app purchase 199

00:41:09   so it's a free app downloaded there's no

00:41:12   limits to it but you're using the blue

00:41:14   fridge you want to use other colors too

00:41:16   box-to-box to unlock the whole app super

00:41:19   cheap

00:41:20   what a great deal their website go to

00:41:24   infinite refrigerator dot-com that

00:41:28   infinite refrigerator calm you'll find

00:41:30   that all the information you need you'll

00:41:31   get to see how cool it looks really cool

00:41:34   built for kids

00:41:35   last thing I noticed is the in the

00:41:38   little virtual kitchen you get there's a

00:41:40   little virtual kitchen service around in

00:41:41   your fridge they even have a toaster and

00:41:44   you can write messages on a piece of

00:41:45   toast and keep that in there so I feel

00:41:48   like there's something in here and you

00:41:51   could tie this together with that Tim

00:41:53   Cook line last year about combining a

00:41:56   toaster in refrigerator but those things

00:41:58   are probably not going to be pleasing to

00:41:59   the user

00:42:00   well here's an app that combines a

00:42:02   refrigerator and a toaster and it's

00:42:03   actually pretty cool so maybe maybe Tim

00:42:05   Cook was wrong on that once again my

00:42:08   thanks to infinite refrigerator go check

00:42:10   them out at infinite refrigerator

00:42:12   dot-com so the stock

00:42:16   yes I'd what do you want what do you

00:42:18   want to say about this doc I try not to

00:42:20   write out the stock but I feel like

00:42:21   what's happened recently is so

00:42:23   extraordinary that it's so absurd that

00:42:26   you can't not talk about it right

00:42:28   I I nice try to spend at least a little

00:42:31   bit of time trying to understand the

00:42:34   situation with the options with the call

00:42:38   options on this why because you had

00:42:42   posted a link to something from november

00:42:46   explaining why they're there is a large

00:42:51   block of options out there so that with

00:42:55   with prices in the range of like 552 800

00:42:59   or something like that so it is it is in

00:43:02   the best interest of these money

00:43:04   managers who have those options out

00:43:06   there to try to keep apples price down

00:43:09   until they expire

00:43:11   I don't know what I don't know enough

00:43:14   about the stock market and what like an

00:43:16   option like that cost for cost but let

00:43:18   you know the gist of it though is it

00:43:20   back in the summer when the stock was

00:43:21   flying really high like up around seven

00:43:24   hundred dollars but in and spent most of

00:43:26   the summer and that 600 people who

00:43:30   bought these options bought them options

00:43:34   come with have an expiration date and it

00:43:36   seems like a lot of them expire this

00:43:38   week right

00:43:39   aah at price points let's say like you

00:43:41   said 550 to 650 or something like that

00:43:43   people who thought the stock would still

00:43:44   be like that so you'd buy the option

00:43:47   ah

00:43:49   or let's say i don't know i don't know

00:43:50   why I'm phone is out there ten bucks i

00:43:52   don't know maybe it's higher it's got to

00:43:54   be hot maybe it's higher but you by the

00:43:55   option for ten dollars you don't know

00:43:56   the stock you're not buying a stock

00:43:58   you're just buying the right to buy the

00:44:00   stock at a certain right price at a

00:44:02   certain date and you're betting that

00:44:05   come january nineteen apple stock will

00:44:08   still be up at like seven hundred

00:44:09   dollars and your option to buy the stock

00:44:12   at five hundred and fifty dollars means

00:44:14   you can buy a whole bunch of shares of

00:44:15   apple at 550

00:44:16   come January and it's already worth

00:44:20   seven hundred dollars because that's

00:44:21   what the stock is that and then you make

00:44:23   money you made money by betting that the

00:44:25   stock would be higher on that date then

00:44:27   the option price and on that could

00:44:31   converse side the person who sells these

00:44:33   options is making sort of the opposite

00:44:36   bet and if come the date that the

00:44:39   options expire the stock is under that

00:44:42   striking price for the option they win

00:44:45   because they keep the money that you

00:44:48   paid for that ten bucks per share that

00:44:50   you paid for the option to buy it and

00:44:52   they still own share that they had to

00:44:54   buy to cover these options if the person

00:44:56   that actually bought them but because

00:44:57   it's under the price they don't have to

00:44:59   sell it right is that did that sound

00:45:02   right that sounds right to me

00:45:03   yes right so that there's all these

00:45:06   institutional investors who in and the

00:45:08   guy you know and I guess these options

00:45:10   you can you can look up what the options

00:45:12   are mean it wasn't like he was making

00:45:13   stuff up like like we do he was actually

00:45:16   found on you know all these are you know

00:45:18   he was telling all the options that are

00:45:20   out there just at five hundred and fifty

00:45:22   dollars and it was like I don't six

00:45:23   hundred million dollars worth of them

00:45:25   and that wasn't counting the ones at

00:45:28   higher prices so it's easy to say that

00:45:30   there's well over a billion dollars at

00:45:33   stake if Apple's stock is like at 500 or

00:45:37   lower in the next two days

00:45:39   yeah which in turn leads to another

00:45:42   people who have those options certainly

00:45:44   motivates them to sort of poo-poo

00:45:46   badmouth the stock and make you know

00:45:49   these arguments like we've been talking

00:45:50   about earlier in the show about why

00:45:52   apple's and trouble and that they're not

00:45:53   doing too well and

00:45:54   stock is down and we should say that the

00:45:56   bulk of this this recent decline and

00:46:01   apples

00:46:02   well I don't know where it's at now

00:46:03   actually but the sort of the doldrums

00:46:06   that they're in right now is because a

00:46:08   couple of publications came out and said

00:46:10   that iphone 5 demand was soft based on

00:46:13   the fact that they had heard from some

00:46:15   people

00:46:15   nameless people that Apple had cut

00:46:19   orders for iphone 5 screens in half

00:46:25   right without really getting into what

00:46:29   exactly that means right i mean here's

00:46:32   the the wall street journal version of

00:46:35   it there are 22 publications that had

00:46:37   this I guess sunday night to monday

00:46:39   morning like it ran on the front page i

00:46:41   think of the journal monday and it was

00:46:43   knee-high and I kk e is Japanese paper i

00:46:48   don't know if it's like the Japanese

00:46:49   equivalent of the wall street journal or

00:46:50   what but then that but it's japanese and

00:46:52   so what I know about it is all

00:46:54   secondhand its people i guess can read

00:46:56   Japanese and and translating it and the

00:47:00   journal which seemingly had the exact

00:47:02   same information here's how the journal

00:47:04   story started and the headline was Apple

00:47:08   cuts orders for iphone parts Apple

00:47:12   incorporated has cut its orders for

00:47:14   components for the iphone 5 due to

00:47:16   weaker than expected demand people

00:47:19   familiar with the situation said monday

00:47:20   so there's like no if ands or butts in

00:47:24   that sentence right i mean they're not

00:47:25   saying who the people familiar with the

00:47:27   situation are never going to really

00:47:28   clarify but that's if you take that at

00:47:32   face value if you read The Wall Street

00:47:33   Journal ending that well it's the wall

00:47:35   street journal so you know if you read

00:47:36   it must be true there's no hemming and

00:47:38   hawing or well it you know there's two

00:47:42   things in there one that the components

00:47:43   were cut by half

00:47:45   no I didn't say that in the first

00:47:47   paragraph but it does say in the next

00:47:49   paragraph it says apples orders for

00:47:51   iphone screens for the january-march

00:47:53   quarter for example has dropped to

00:47:54   roughly half of what the company had

00:47:56   previously planned to order two of the

00:47:58   people said so half is a huge number

00:48:02   that's huge it doesn't matter what you

00:48:04   know what what it was from her too

00:48:07   and they don't hammer horror say maybe

00:48:09   it's or that it's a sign of weaker than

00:48:11   expected demand for the iphone 5 they

00:48:13   say that the journal says it's due to

00:48:15   weaker than expected demand and you know

00:48:20   the stock took a bath on that over the

00:48:22   next two days I mean really will trick

00:48:24   to get dropped by i forget like a market

00:48:27   cap why's it drop by like a hundred and

00:48:29   seventy million dollars billion dollars

00:48:30   which is like bigger than all but like

00:48:32   maybe like the 10 biggest corporations

00:48:35   in the world like they dropped in value

00:48:37   by more than the size of most big

00:48:39   companies and reunite originally they

00:48:43   used to be and i wrote a lot about it

00:48:44   this week i don't think the whole thing

00:48:46   is pile of horseshit

00:48:47   I really do at and at the the nikkei i

00:48:52   won from Japan gave actual numbers it

00:48:55   said that they said that the original

00:48:57   order was for 65 million displays

00:49:00   apparently apparently the journal had

00:49:02   that in there originally and then right

00:49:04   and then remove took it out like sunday

00:49:06   night online they had that in there and

00:49:09   I don't think it don't think it appeared

00:49:11   in print and by the time i read the

00:49:13   story monday morning it wasn't in there

00:49:15   that they had the same thing but they

00:49:17   didn't replace it with another number

00:49:18   which to me is a huge problem when you

00:49:21   say it's dropped by half but you don't

00:49:23   say what what you don't even give a

00:49:25   ballpark range for what the original

00:49:27   numbers were there's no way to ever

00:49:28   verify that right there because then

00:49:30   come next quarter apple can and will

00:49:32   release and say how many iphones they

00:49:33   sold and we can take a pretty good guess

00:49:35   that what percentage of them or iPhone 5

00:49:38   is based on the average selling price

00:49:39   and whatever that number is you could

00:49:44   say well the journal was right because

00:49:46   Apple expected to sell double that no

00:49:47   matter what it is because they didn't

00:49:49   give the number

00:49:50   yeah it's like when amazon says that

00:49:52   they've sold the most handles ever in a

00:49:54   quarter but they never tell you how many

00:49:56   they sold so who knows you know maybe

00:49:58   they went from 10 to 11 right or that

00:50:01   the you know I forget amazon always does

00:50:03   that they never reveal how many candles

00:50:04   they've sold but they'll say things like

00:50:06   it you know a hundred and fifty percent

00:50:08   higher than the previous record for

00:50:10   kindle sold in the quarter

00:50:12   yeah but it's you know a hundred and

00:50:13   fifty percent of ? and if they could

00:50:16   guess if the number add it's just none

00:50:17   of it is that makes sense because it's

00:50:20   it's unlikely that they would order 65

00:50:22   million screens for the current quarter

00:50:24   right it really makes no sense and

00:50:27   nobody seemed to question this hour

00:50:29   well I did but it seems like most people

00:50:31   people who should know better never

00:50:33   questioned it that it's such an unusual

00:50:34   number because there's the most i've

00:50:37   ever sold in a quarter is 37 million

00:50:39   that's iphones and a quarter and that

00:50:40   was last year's holiday quarter and this

00:50:44   year there's the consensus among

00:50:47   analysts both the wall street ones and

00:50:49   the independent analysts like Andy's a

00:50:50   ques you know have a much more accurate

00:50:53   track record is about 50 million so they

00:50:56   would go from 37 million last year 250

00:50:58   million this year year-over-year for the

00:51:00   holiday quarter and nobody is really

00:51:04   picking a number much higher than 50 and

00:51:07   the next quarter after the holiday

00:51:08   quarter they've always sold for less

00:51:10   than the holiday quarter because there's

00:51:13   so many people who buy them as holiday

00:51:14   gifts and now the last two years the

00:51:17   holiday quarter is when the new iphone

00:51:19   came out so you get the double whammy of

00:51:21   both the people who are like my gosh

00:51:24   you're like I want the new iphone as

00:51:25   soon as it comes out in order in that

00:51:27   quarter and you get the holiday gift

00:51:29   bump like so last year they went from 37

00:51:33   million in the holiday quarter 35

00:51:35   million in this January to March quarter

00:51:37   which is like I think roughly five

00:51:39   percent drop in all previous years

00:51:42   there's some level of dropped from

00:51:44   holiday to the next quarter but yet if

00:51:46   you take this 65 million number at face

00:51:48   value then somehow Apple expected thirty

00:51:51   percent growth in the january-march

00:51:54   quarter after the holiday quarter even

00:51:56   though there's no historical reason for

00:51:58   it and they're not introducing a new

00:52:00   model or anything like that it just

00:52:03   doesn't make any sense

00:52:04   like if they actually wanted to order

00:52:06   that many displays ah it seems like

00:52:10   somebody was drunk right

00:52:12   although i did I guess the other

00:52:14   argument i've seen which I hadn't

00:52:15   thought of the other argument i've seen

00:52:17   any horses did you you know and

00:52:18   typically the smart bed basket but

00:52:21   somebody pointed out that it could just

00:52:23   be that they're getting

00:52:23   higher-than-expected yields that maybe

00:52:26   they you know have expected that only

00:52:29   four out of every five displays they

00:52:31   ordered would be up to their stuff and

00:52:33   that they're finding that you know

00:52:35   ninety-five percent of them are passing

00:52:37   requirements so that they may be they

00:52:40   originally planned to order 65 million

00:52:41   not because they expected to buy sell 65

00:52:44   million iphones but that they needed 65

00:52:46   million to sell 45 million because they

00:52:49   expected 20 million of them to be duds

00:52:51   or something like that she's so there's

00:52:53   other arguments you can make but it's

00:52:54   still the 65 million thing just does not

00:52:56   it doesn't make any sense now and it

00:52:59   doesn't make any sense that they would

00:53:00   need to cut it in half due to this is

00:53:03   the bigger part I think we're regardless

00:53:05   of the actual number the bigger part is

00:53:07   whether such a cut-off would be due to

00:53:09   weaker than expected demand because

00:53:11   there seems to be no sign that there's

00:53:13   weaker-than-expected right now they only

00:53:15   want us across the border saying that

00:53:17   they expect 50 million iphones sold this

00:53:20   quarter with the quarter they're going

00:53:21   to announce next week verses 37 million

00:53:24   last year which is higher not lower and

00:53:26   they only caught up with demand about a

00:53:28   month ago right they spent most of that

00:53:30   the holiday quarter with you know you go

00:53:33   to the website with many times when you

00:53:36   ordered one they spent most of you know

00:53:39   up until I think December they you know

00:53:40   they hadn't production hadn't caught up

00:53:43   with demand they clearly been making

00:53:45   them as fast as they could this

00:53:48   ridiculous a minute of course the usual

00:53:49   collection of nerdy wells have been

00:53:53   saying seaweed we know we told you that

00:53:56   iphones nobody out nobody likes iphones

00:53:58   anymore right and the thing I got you

00:54:01   know an undated with his accusations of

00:54:03   you know I think what I sort of got one

00:54:05   guy called me Baghdad Bob but you know

00:54:11   it's like I don't know it's that guy

00:54:13   can't win

00:54:14   you know I mean there's no use worrying

00:54:16   about it

00:54:16   I mean but this is you know this is why

00:54:18   I drink but this is no way at you know

00:54:21   they're so convinced that doesn't matter

00:54:25   how many holes you logical solid holes

00:54:27   you can poke and say boy this just

00:54:29   doesn't add up

00:54:30   and.and point2 interesting ways of

00:54:32   looking at why it doesn't add up

00:54:34   it's it's the fact that there's so many

00:54:36   people and it gets back to you know what

00:54:38   we're talking with beginning of the show

00:54:39   who are so convinced that Apple it is

00:54:41   set to fall and that the iphone is

00:54:43   collapsing that they just took that

00:54:47   journal story and and that's it that's

00:54:51   the gospel right and so anybody who's

00:54:53   arguing otherwise just grasping at

00:54:55   straws because they're below an apple

00:54:57   yeah because it's a religion fall

00:54:58   because it's a religion

00:54:59   yeah so next week there's a couple

00:55:04   things to look for a little look to see

00:55:07   what happens with apple's share price

00:55:08   because of these options right and then

00:55:11   look to see at the conference call for

00:55:14   the conference call how many how many

00:55:16   iphones this is old which you should do

00:55:18   every quarter but right i do wish that

00:55:21   they would break it i guess you know I

00:55:23   can I mean we should be lucky because

00:55:24   Apple reveals a lot more sales data than

00:55:27   a lot of its competitors I mean like I

00:55:28   said amazon has never revealed how many

00:55:30   candles they've sold of any kind google

00:55:36   never reveals how many android phones

00:55:38   are so they just have that weird

00:55:39   activation number that they never define

00:55:41   what the hell yawns yeah

00:55:43   in the end you know they certainly don't

00:55:46   reveal numbers of their own nexus stuff

00:55:48   which they would no more than just

00:55:50   activation they should know exact sales

00:55:52   numbers nobody really reveals any of

00:55:54   that so it gives you wish I mean greedy

00:55:55   though I wish that apple would break it

00:55:57   down and say we saw this morning iphone

00:55:58   5 this many fours and this many 4 s's

00:56:01   yeah I guess so apparently i guess it's

00:56:03   not it's not required for audit purposes

00:56:06   to do that no but that you can kind of

00:56:09   backwards engineer at tho by at least

00:56:12   getting the ballpark estimate by looking

00:56:14   at the average selling price and right

00:56:17   through analytics but it's kind of weird

00:56:20   that app developers and website mobile

00:56:22   websites looking at their statistics can

00:56:24   kind of suss out how many although i'm

00:56:26   not sure if a website can tell if your

00:56:27   iPhone's and iphone 5

00:56:29   I think it would just know the version

00:56:30   number i guess it's only the app

00:56:33   developers that get the analytics that

00:56:34   they can kind of tell you know what the

00:56:36   cpu is you can tell my story you can

00:56:38   tell by screen you can tell by screen

00:56:40   size right can you do the and it doesn't

00:56:43   tell the screen size

00:56:44   oh it does i I don't know in that

00:56:46   instance you can I guess I'm but guess

00:56:49   what I'm saying is I don't know how do I

00:56:50   i know i said i guess that does report i

00:56:53   guess since the iphone it does report

00:56:55   the screen size you can tell because the

00:56:56   only iphone with the 1136 pixels height

00:57:00   is the iphone 5 but it's weird that

00:57:02   apple reports more than another million

00:57:04   apple which is famously close secrets

00:57:08   your damn serious and reports more about

00:57:10   what they sell them other companies

00:57:12   still yeah and we know part of it is

00:57:14   that they're not really secretive about

00:57:15   everything they're really mostly

00:57:16   secretive about what they're going to do

00:57:18   right and they're not so secretive about

00:57:20   way they don't have done you know and I

00:57:24   feel you know I've always said this to

00:57:26   that you know and then still continues

00:57:28   even now that jobs gone but jobs

00:57:29   explanations on stage talking about

00:57:32   products really i always thought they

00:57:34   were incredibly insightful and and

00:57:37   honest about where the where Apple was

00:57:39   coming from when they made the thing you

00:57:42   know that there was like an honest

00:57:43   explanation of here's what we were

00:57:45   thinking we could do and here's how we

00:57:46   did it

00:57:46   yeah i went back and watch the imac

00:57:51   unveiling which I'd never and i think

00:57:55   i've actually seen that before I don't

00:57:58   think i'm losing what's he wearing like

00:58:00   a weird suit yeah he was wearing ass 12

00:58:02   who's wearing a jacket

00:58:04   it was like a suit with us with a

00:58:06   button-up shirt button at the top of

00:58:07   that i was weird as I guess it's sort of

00:58:12   like if you ever thought like you know

00:58:14   in the heyday and that the whole decade

00:58:16   long run if you ever like cross your

00:58:18   mind like why does he wear the same

00:58:19   stuff every day on then you look at some

00:58:22   of the stuff he wore before we settled

00:58:23   on that and you're like maybe he was

00:58:24   right to settle on the black certain

00:58:28   genes and that's it

00:58:29   get some goofy outfits in this first

00:58:32   couple years

00:58:33   yeah he swore us like a sweater vest for

00:58:39   all for a long time right you have the

00:58:40   do you have a link to that youtube is on

00:58:42   youtube

00:58:43   yes it doesn't your i can find it for

00:58:45   you should tell me don't put that in the

00:58:47   show channel

00:58:48   yeah but it's interesting though it's

00:58:51   just funny how am I eat out the mouse is

00:58:53   like the best master never make it

00:58:55   you know you could get people fired up

00:58:57   around that you know this this is why on

00:58:59   is a enormous fan of the hockey puck are

00:59:01   you kidding me loved it and she African

00:59:04   she tweeted about it a couple months ago

00:59:05   and a couple of other of our nerd

00:59:07   friends a couple of them chimed in and

00:59:09   said you know I liked it too

00:59:11   it was not universally despised although

00:59:14   i think it was majority despised yeah I

00:59:19   had I had a little like they use this

00:59:20   old like this clip on things these

00:59:22   plastic like I think clip-on tie but

00:59:26   basically a piece of plastic you clicked

00:59:28   on it to make it a more like a normal

00:59:30   Mouse yeah I I never had a computer that

00:59:33   came with one of the brown my so I never

00:59:35   really spent a lot of time with it

00:59:37   I mean it's but i guess the argument the

00:59:41   main argument about it was that because

00:59:42   it was perfectly round there was no way

00:59:44   to tell which way it would when you just

00:59:46   held it right now looking at was the

00:59:48   necessary i was with the orientation was

00:59:49   yeah yeah and I did not a fast a lot of

00:59:54   other is uncomfortable to it was wide

00:59:59   width

00:59:59   width

01:00:00   I like because it just fit that felt

01:00:02   good but I couldn't couldn't tell which

01:00:03   one's going to let me do the second

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01:00:19   stalks coffee you drink coffee John i do

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01:00:26   tried the talks i have not yet but it's

01:00:28   on my list of things to see

01:00:30   but this is see this is why they're

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01:00:33   know you get me that there are a lot of

01:00:35   people out there just like you who are

01:00:36   coffee drinkers talk show listeners and

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01:00:42   think you know what I'm going to get

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01:00:51   sign up and try it and you're going to

01:00:52   thank me later and you're gonna look

01:00:54   here some of the tweets i still get I've

01:00:55   i save these tweets

01:00:57   here's a tweet from Terra man minn

01:01:00   alright trying out talks coffee your

01:01:02   sponsorship of groupers talk show worked

01:01:05   I'm excited well I guarantee she's gonna

01:01:07   be happy that she did it

01:01:08   here's another one Matthew rather long

01:01:13   time listener the talk show is ready

01:01:17   tweeted I thought the coffee from the

01:01:18   big-box membership store was ok then i

01:01:21   tried talks coffee can't drink that shit

01:01:24   anymore i'm too that's how good talks

01:01:27   that's the end I'm telling you that's

01:01:28   the biggest downside to talks is you

01:01:30   sign up for tongues they before you've

01:01:34   signed up they've gone around the world

01:01:36   source the best beans from all around

01:01:38   the globe

01:01:39   they've roasted them themselves just

01:01:41   write soon as they roast them they seal

01:01:44   them up and then they send them out to

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01:01:51   the only downside to this is the best

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01:01:57   downside is you get harder and harder to

01:01:59   drink stuff that not talks coffee

01:02:01   because everything else starts tasting

01:02:03   like like crap i can't say enough good

01:02:06   things about them i keep getting these

01:02:09   tweets and emails from people who are

01:02:11   you know why I listened to it I tried it

01:02:12   you were right it's great

01:02:13   I don't don't think about is something

01:02:16   going to eventually do it now you're

01:02:18   gonna thank me for it you can go there

01:02:19   you'd end the best part is a great deal

01:02:21   this is to me is the the genius of their

01:02:23   business model is this free trial

01:02:24   because nobody wants to sign up for a

01:02:27   subscription site unseen no matter how

01:02:30   many good things i say about them

01:02:31   they're not nobody why I feel like a lot

01:02:33   of people you need nobody wants to say

01:02:34   I'm gonna spend you know however much

01:02:36   money a month and then I've got if I

01:02:38   don't like it if I'm not satisfied i

01:02:40   gotta back out

01:02:40   you don't have to take my word for it

01:02:42   free trial they'll just send you some

01:02:44   and you're going to try and then you're

01:02:45   going to think when I was not I should

01:02:46   have just listened to him and paid for

01:02:48   it and signed up so go ahead talk story

01:02:50   do x.org go check them out if you drink

01:02:54   coffee you're gonna thank me later

01:02:56   what else we got left on the agenda

01:03:02   here's a question I and again I I this

01:03:05   is one of the reasons why i somehow i

01:03:07   sometimes feel out of place talking

01:03:09   about the stock is I'm not really a

01:03:10   stock expert and in my apples stock

01:03:13   price is not really the reason that I

01:03:16   follow them i don't own apple stock

01:03:19   because I don't feel like it would be

01:03:20   appropriate with what i do but i do feel

01:03:27   though that it's it is like it when it

01:03:30   really fluctuates like it has recently

01:03:32   it it's a level of absurdity that even

01:03:34   somebody like me is not an expert can

01:03:36   can see that this just is irrational you

01:03:40   know that it's not built on based on

01:03:42   what what investors called the

01:03:43   fundamentals meaning the numbers right

01:03:45   there's there's so many it's like 12

01:03:50   dimensional chip is like trying to

01:03:52   understand well dimensional chest

01:03:53   there's so many other things that go

01:03:55   into it so many and so many things based

01:03:57   there just straight-out gambling that

01:04:01   have nothing to do with the company at

01:04:02   all like these options like these option

01:04:04   calls that it it seems like they're just

01:04:08   better off not worry about it

01:04:11   I so there's a there's a measurement of

01:04:14   a company's stock price called the the

01:04:16   p/e ratio price-to-earnings and again

01:04:21   correct me if I'm wrong but the basic

01:04:22   idea is you take the company's profits

01:04:26   and you multiply it by a certain or you

01:04:29   take the company's stock price and you

01:04:30   divide it by what their prophets are and

01:04:33   that's the p/e ratio in other words the

01:04:35   price of the stock versus how much

01:04:36   profit they're making I guess quarterly

01:04:38   and like the average for the S&P 500 is

01:04:44   15 in other words the average stock

01:04:46   price of a big company is about 15 times

01:04:49   the profit of the company and you know

01:04:52   some companies hire some companies are

01:04:53   lower but you know 15 and to me seems

01:04:55   like a reasonable i did that somehow it

01:05:00   makes sense to me that seems about right

01:05:02   what 15 is a you know for years

01:05:07   quarterly you know so a company is worth

01:05:10   about four years times its profits I

01:05:12   don't know sounds about right

01:05:13   Apple's is it like 10 and if you

01:05:16   subtract the hundred billion dollars in

01:05:18   cash that they have in the bank which

01:05:20   seems fair because if you're just going

01:05:22   to say here's what the company's worth

01:05:23   which is what the stock price is

01:05:25   supposed to represent the cast you

01:05:28   should be able to just subtract from

01:05:29   that if you subtract that massive amount

01:05:31   of cash

01:05:32   it's nine so there-there p/e ratio is

01:05:35   way less than the average company yet

01:05:38   they've been in the midst of this

01:05:40   incredible growth over the last couple

01:05:42   of years and the number that gets me is

01:05:45   is Amazon Amazon p/e ratio and I'm not

01:05:48   making this up

01:05:48   it's it's like 2,600 this is I stood

01:05:53   it's not an exaggeration there you know

01:05:55   amazon lives in like this I i will link

01:05:57   to a magical acs article while ago that

01:05:59   Amazon lives in this world worth

01:06:01   investors and do not care about their

01:06:03   profits that their you know their

01:06:05   stories is not as bears no relation to

01:06:08   their profitability whatsoever there the

01:06:10   market share poster child right and a

01:06:13   little I think it's almost the opposite

01:06:14   right there is getting really didn't you

01:06:16   in front for you in the reason are they

01:06:18   have profits massive profits i just i

01:06:23   don't get that it's it seems like it's

01:06:25   still the same old dot-com bubble

01:06:27   mentality where do they do yeah they're

01:06:30   not making any money but eventually

01:06:31   eventually they'll make money on amazon

01:06:35   has been doing this for 15 years

01:06:39   yeah I feel like with amazon amazon too

01:06:41   interesting and I don't have to admit I

01:06:42   don't get that strategy like to me it's

01:06:45   just it's not just because it's apple

01:06:48   but I i do something and I think it's

01:06:50   part of what just appeals to me about

01:06:51   the whole thing is that I understand

01:06:53   what Apple's doing is making money every

01:06:56   time they sell something and then just

01:06:58   putting that money away and not

01:07:00   squandering it now i understand that

01:07:01   that's not how I behaved in real life

01:07:03   I'm a command that squander every dollar

01:07:05   but i wish that i had the discipline to

01:07:08   build up a huge you know

01:07:10   hundred-million-dollar dashboard and

01:07:13   then before the show when I was making

01:07:14   notes i anchor rope down the hundred i

01:07:17   want to talk about this and I wrote down

01:07:18   a hundred billion cash and I thought

01:07:19   that can't be right know that it it's 10

01:07:21   billion right can't be a hundred but it

01:07:24   is it's a hundred have a hundred billion

01:07:25   dollars in cash that they're just

01:07:26   sitting on that when I wrote it down it

01:07:29   seemed like a preposterous number right

01:07:31   it does seem preposterous seems crazy

01:07:36   right but it doesn't seem to have any

01:07:39   kind of value in it doesn't it doesn't

01:07:41   become valuable in the stock and you

01:07:44   know and I you know I guess you know I

01:07:47   you could argue maybe reasonably that

01:07:49   the run-up that Apple had last year over

01:07:52   the summer when the stock price reached

01:07:54   its peak maybe that was a little

01:07:55   irrational to just as irrational as the

01:07:57   dive that it's taken in the last three

01:08:00   months but even at its peak their PE

01:08:05   ratio was still like never got more than

01:08:08   like 12 or 13 it still never reach the

01:08:10   average p/e ratio of a company in the

01:08:13   SMP 500 that you could make a reasonable

01:08:16   case that only looking for a PE value of

01:08:19   the average company SMP 500 that Apple

01:08:21   stock should you know should be up and

01:08:23   around under 850 or something like that

01:08:25   i had a screen capture that I had for a

01:08:29   little while and finally eventually just

01:08:31   deleted because i didn't know where to

01:08:32   post it but it was a our local paper at

01:08:36   I follow their twitter account and I

01:08:38   think they're just they're point wire

01:08:39   stories for this stuff because they

01:08:41   don't they don't follow this correctly

01:08:43   themselves but it was back in october i

01:08:47   think when they when apple and both

01:08:49   Apple and Amazon

01:08:50   supporting their their quarterly numbers

01:08:53   and apple had a good quarter missed the

01:08:58   analyst estimates of course again it but

01:09:02   a amazon reported a loss if i remember

01:09:06   correctly

01:09:07   ya think the last quarter and also to

01:09:09   like a pretty big loss like 247 million

01:09:11   dollar yeah and both of that both of the

01:09:13   both of the tweets which came within 10

01:09:16   15 minutes of each other something like

01:09:18   that said what about each of them apple

01:09:22   mrs. mrs. analyst estimates amazon mrs.

01:09:26   analyst estimates that is as if the two

01:09:30   both had equally bad quarters right when

01:09:33   amazon reported a big loss and apple

01:09:36   made a whole crapped on a mine

01:09:39   yeah and you've written about this

01:09:41   pretty pretty well about the this this

01:09:44   that the one Apple does miss the

01:09:46   analysts projections that it it is so

01:09:50   the way that gets played in the stories

01:09:52   is so misleading it is and again it's

01:09:56   like the everyone to be a reflexive

01:09:57   defend apple at all costs and paint no

01:10:01   matter what the news is good for Apple

01:10:03   but it's this emphasizes miss miss miss

01:10:07   miss miss and doesn't mention that it

01:10:09   was the Miss involved 8.2 million

01:10:12   dollars in profit right and it's sort of

01:10:14   i mean i think the idea if you know if

01:10:17   you wanted if you want to take their

01:10:18   point of view is that it's an industry

01:10:19   shorthand for if you have money and

01:10:22   apple you might have over you might have

01:10:26   just overestimated because you know if

01:10:29   you were betting on what the analysts

01:10:31   said then they weren't quite right but

01:10:34   for the average person it doesn't they

01:10:37   don't they don't understand that you

01:10:39   just think Apple had a bad quarter right

01:10:41   and and it's up you know and it's

01:10:44   entirely yet because you don't they

01:10:46   don't put that context in their right

01:10:47   and it's it's emphasizes only they it

01:10:51   emphasizes only the mists and the missus

01:10:54   just of numbers an analyst pull out of

01:10:56   their hats

01:10:57   I mean I not entirely that you know i

01:11:00   spaced on something but it's the right

01:11:01   they've got spreadsheets that they're

01:11:02   looking at but they're just making

01:11:04   a guess and and I guess it hopefully in

01:11:06   most cases and educated guess but it's

01:11:08   still just a gas and you look at things

01:11:10   like well year-over-year how are they

01:11:12   doing and it's up you know even in the

01:11:16   corner with the miss it was op up it's

01:11:18   just that I it just wasn't up as high as

01:11:21   a lot of these analysts had guests and

01:11:24   it's just you know and again i'm not

01:11:25   saying that they shouldn't report bad

01:11:27   but it just seems like the way that they

01:11:28   presented is so heavy-handed and I think

01:11:32   part of it even if you don't even have

01:11:33   to be at having apple bias a specific

01:11:36   anti-apple bias but i think it's this

01:11:38   mindset that we've written so many good

01:11:40   things about apple and their success

01:11:42   that we need to emphasize anything

01:11:44   that's bad and the name of objectivity

01:11:47   you know I think that you know it gets

01:11:51   back to wide everybody jumped on this

01:11:53   antennagate story you know spice such

01:11:57   fervor that well here's something we can

01:12:00   say that Apple did that is imperfect and

01:12:02   now we're going to hammer it into the

01:12:05   ground

01:12:06   it's very strange to me that they come

01:12:09   up with such a vastly different numbers

01:12:11   it is and I'll tell you know here's the

01:12:14   point I wanted to make was that it seems

01:12:16   like apples getting hurt because for a

01:12:18   long time Apple would offer their own

01:12:20   guidance then they still do I think

01:12:22   they're legally obligated to that the

01:12:23   end after they report the last quarter

01:12:25   they offer guidance for the coming

01:12:27   quarter and apple notoriously offered

01:12:30   sandbag guidance you know in other words

01:12:33   you know they was not what Apple

01:12:37   honestly expected to report it was it

01:12:39   was a number that it was an unbeliever

01:12:41   shirts famous country hell where ya at

01:12:43   this

01:12:43   it was a number of analysts predict

01:12:44   their their numbers and maybe a little

01:12:49   you know somewhat higher than apples

01:12:51   project own projections but all of them

01:12:54   were short of reality and I think that

01:12:55   what's happened over the last year that

01:12:57   you know they've finally caught on that

01:13:01   Apple's right projections are so low

01:13:04   that they've adjusted their own to be

01:13:06   even higher to compensate and that

01:13:08   they've really more gotten good right

01:13:11   right it's take that even the miss that

01:13:14   they reported last quarter wasn't that

01:13:17   far

01:13:17   off it was actually so that gets really

01:13:19   not so much that Apple missed or four

01:13:22   came way below it was that these

01:13:25   analysts projections are projections you

01:13:27   want to be spot-on for once instead of

01:13:29   coming in way under and having apple

01:13:31   blow them away right which is another

01:13:36   yeah it's just another element of the

01:13:38   the whole thing that makes this all so

01:13:41   incomprehensible and I throw my hands up

01:13:45   that trying to figure this stuff out and

01:13:47   it doesn't seem like you know you always

01:13:49   think well maybe maybe the people who

01:13:50   are really into this stuff they know all

01:13:52   this and put it really i don't i don't

01:13:54   get that sense now and at the analytics

01:13:57   you know honest and I bet most of the

01:13:59   people to listen to the show you know

01:14:01   about a lot of doing some apple stock

01:14:03   and hopefully the way that they do it

01:14:04   it's just buy it when somebody you know

01:14:07   like last week like when somebody print

01:14:09   something stupid and then the stock

01:14:10   drops down by a dent and then just put

01:14:14   it away and don't look at it and and you

01:14:16   know assume that it's gone up that and

01:14:18   we'll keep going up in the long run over

01:14:20   time but that if you i-i've if i owned

01:14:22   apple stock and like looked at the

01:14:24   numbers and week-to-week and jackass by

01:14:28   jackass I i would have indigestion so

01:14:34   much of it and the thing is it it's

01:14:36   there's that famous phrase that's always

01:14:38   in if you get like a statement from your

01:14:42   mutual fund company it's like past

01:14:44   performance is no indication of future

01:14:45   future performance or something like

01:14:47   that right and it gets back to that

01:14:48   point about whether or not Apple needs a

01:14:51   hit and whether or not they sold a lot

01:14:56   of iphones this past quarter and that's

01:14:58   that's done it's right it's the stuff

01:15:01   that they're going to do in the future

01:15:02   that's going to get you

01:15:04   growth potential out of stock it will

01:15:08   provide provided the market doesn't do

01:15:09   something you know dumbass like it's

01:15:11   been doing the last last week so you can

01:15:15   I you kind of have to decide based on

01:15:18   the history of the company

01:15:20   I mean I guess you basically based this

01:15:22   judgment on the history of the company

01:15:23   and the management of the company

01:15:24   whether or not you think that they're

01:15:26   going to be able to do something in the

01:15:29   future that's going to be a big hit

01:15:31   going to get a lot of growth out of and

01:15:32   I don't understand in VA you could say

01:15:34   that Steve Jobs is the only one that

01:15:36   could innovate apple and so therefore i

01:15:39   don't think the company's gonna do you

01:15:41   know they're just gonna make iPhones and

01:15:42   iPads and then max for the rest of

01:15:44   forever and never will never have

01:15:47   another breakout product but I don't

01:15:50   that seems incredibly short-sighted to

01:15:52   me and I don't want to stop but just I

01:15:55   like the thing and it's I you know that

01:15:58   I I just feel like all of them all of

01:16:01   their executives but you know Tim Cook

01:16:03   in particular since he's the one you

01:16:04   know he's the one who sits on the throne

01:16:06   now I have my hat is off to him for just

01:16:10   not blowing his stack going nuts because

01:16:14   there's no way he can win and he surely

01:16:17   knows it right so he's getting

01:16:19   excoriated now because Apple hasn't

01:16:21   released a major new innovation

01:16:23   disruption since he took over as CEO

01:16:26   ah and if and when eventually they do I

01:16:30   did guaranteed 9 x 9 99 times out of a

01:16:34   hundred ninety-nine chance out of a

01:16:35   hundred it's going to be dismissed as

01:16:39   wow that's terrible

01:16:40   this guy's no Steve Jobs and even if

01:16:42   jobs had died two years earlier and the

01:16:47   ipad exactly as it is exactly as it

01:16:50   wasn't 2010 was introduced under tim

01:16:53   cook that whole it's just a big iphone

01:16:57   man you know that's it it's just it's 99

01:17:00   inside phone

01:17:01   it would have been ratcheted up to 11 as

01:17:04   it's nothing but a big iphone total turd

01:17:07   this guy is no Steve Jobs all he did is

01:17:10   take the iphone and make it 10 inches

01:17:12   guy's an idiot apples-to-apples do and

01:17:16   they still would have sold just as many

01:17:17   right because real people that soon out

01:17:20   to they go and yeah store for the most

01:17:22   part this is cool this is cool little

01:17:24   but i think it would have been you know

01:17:26   and and you know I i expect that

01:17:28   whatever in apple's next big thing is

01:17:30   it's you know like almost all of their

01:17:32   things that have been innovations are

01:17:33   don't look like innovations to the to

01:17:37   the people watching right away you know

01:17:39   to most people that they're you know

01:17:40   this is not how it works

01:17:43   and that's you know under jobs there was

01:17:47   enough faith that they would just say

01:17:48   you know kind of a kind of a turkey but

01:17:52   now that he's gone and everybody is

01:17:53   looking for this doom situation this

01:17:55   Apple can't function without Steve Jobs

01:17:57   the exact same thing is just going to be

01:17:59   turned up to 11

01:18:00   yeah so it'll be interesting to see when

01:18:03   they do release something and I i

01:18:06   personally don't have any doubt that

01:18:09   eventually within the next few years the

01:18:12   valenar some some new market i would

01:18:17   think they have to yeah i think it's

01:18:19   inevitable but i just don't know that

01:18:21   you you know it it'll happen when I

01:18:23   don't you know you can't make it happen

01:18:25   right you know it's it's there is no way

01:18:27   to make the iphone sooner yeah you can

01:18:29   argue that this is wow it took six years

01:18:31   between the original ipod until they did

01:18:33   the iphone why couldn't they do that

01:18:34   sooner but I did there was no way I mean

01:18:36   the iphone was so ahead of its time

01:18:39   technologically there was I just don't

01:18:41   think there was any way to make it

01:18:42   before and then you get hips are

01:18:44   touchscreen of the technology existed

01:18:46   you could argue that the fact that I

01:18:48   mean this is the i know people are gonna

01:18:50   roll her eyes with this but the fact

01:18:52   that they haven't introduced something

01:18:53   is that just proof that the company is

01:18:55   actually still the same because

01:18:57   companies that are bad throw crap out

01:19:02   the door every day right and responds

01:19:06   immediately to whatever is going on in

01:19:07   the market and try to match what's

01:19:10   happening whereas Apple sits on their

01:19:11   stuff and make sure they get it right

01:19:15   before they send it out the door which

01:19:18   is why these things only come out every

01:19:21   36 years were right and in the meantime

01:19:23   they're going to keep doing what they've

01:19:25   always done which is iterate on the

01:19:26   stuff that's already out there and

01:19:28   popular as aggressively as they can and

01:19:31   it iteration to iteration never really

01:19:34   making any single great leap forward but

01:19:36   yet you know and and with a little bit

01:19:39   even just a little bit of hindsight

01:19:41   making remarkable progress right i mean

01:19:43   three years ago they were still selling

01:19:44   the iphone 3gs I mean you compare the

01:19:47   iphone 5 2 3gs and it's you know it's

01:19:49   like night and day

01:19:50   you know that's the other thing that

01:19:52   kills me about these the the pessimists

01:19:55   on Apple that say that like

01:19:57   I keep saying over and over again that

01:19:58   innovation and smartphones over like

01:20:00   smartphones are done so they've got to

01:20:03   move on to the next big thing because

01:20:04   smartphones have been completely

01:20:05   commoditized and I got you nuts

01:20:08   it's it's like I can't believe anybody

01:20:11   would think that when there's so much

01:20:12   more room for faster computing and

01:20:16   faster graphics and thinner phones and

01:20:21   more durable materials and I mean just

01:20:25   look at the camera alone is making such

01:20:28   unbelievable progress year-over-year I

01:20:31   mean that's like the one thing where i

01:20:32   can almost tell like when I look back at

01:20:35   like family photos and stuff like that

01:20:37   like I look back at the ones i snapped

01:20:39   on my iphone two years ago and it they

01:20:40   look terrible

01:20:41   like just from a technical perspective

01:20:43   just camera technology alone is is it's

01:20:48   there's so much room for potential for

01:20:50   for you know new hardware and and stuff

01:20:53   going forward

01:20:54   yeah makes me not haaa i'm going to see

01:21:01   at macworld oh yeah i'm going back room

01:21:03   yeah I like that word thats that's worth

01:21:05   being on the show people everybody out

01:21:07   there everybody should go to macroplex

01:21:08   yeah what is that two weeks two weeks

01:21:10   ago been so we'll be there two weeks two

01:21:13   weeks from today I think I'm going on a

01:21:14   panel two weeks from today you want any

01:21:17   patterns or anything you speak I not

01:21:20   that I know of

01:21:20   not yet anyway usually i often get drawn

01:21:24   into something late because I always

01:21:25   book late are you looked you're going i

01:21:28   am booked i am now booked as of a couple

01:21:31   days ago but yeah looking forward series

01:21:35   have is no rare on the talk show where I

01:21:38   get to see i'll see you soon is too soon