The Talk Show

221: ‘Slathered in Incompetence’ With Ben Thompson


00:00:00   My laptop, I had to get a new one because I dropped my old one in a very unfortunate

00:00:04   turn of events.

00:00:05   And I ran that one from scratch because I stupidly didn't get a big enough hard drive

00:00:10   to just copy everything over.

00:00:12   And man, it's awful.

00:00:14   It's awful just trying to get everything.

00:00:16   I remember all the weird stuff you have installed.

00:00:18   Rookie move.

00:00:19   Well, no, because I had to buy it on an emergency loan.

00:00:23   I was traveling.

00:00:24   You had to get the one that's in the Apple store and they've only got like the 512 or

00:00:28   whatever.

00:00:29   - One with 512, yup.

00:00:30   And so I bought the biggest,

00:00:31   one with the biggest hard drive that I could get, so.

00:00:33   - Yeah, I could see that.

00:00:34   And that's really where it sucks

00:00:36   that you can't upgrade shit like that anymore.

00:00:39   - I don't.

00:00:40   (laughing)

00:00:41   - 'Cause I would just,

00:00:43   I would just,

00:00:44   I would just

00:00:45   buy the one, you know,

00:00:48   if you could. - I just sell it by doing.

00:00:49   - Yeah, you should just sell the whole machine.

00:00:51   But what I would do is,

00:00:52   if I had to buy like an emergency one

00:00:53   and got like 512 instead of one terabyte,

00:00:57   And in the hypothetical world where you could swap it out.

00:01:00   I would swap it out when I could and tell myself

00:01:03   I'll just sell that 512 and then the 512

00:01:06   will just sit on a shelf in my office for 10 years

00:01:09   until it's worth nothing because it doesn't fit

00:01:12   in any more computers.

00:01:14   - Oh, that's right.

00:01:15   I don't think I've ever actually,

00:01:16   I rationalize buying new things.

00:01:19   I say I'll buy the old thing,

00:01:20   but I never ever actually sell the old thing.

00:01:22   - I think I could actually profit

00:01:23   by hiring a personal assistant in at least the first month

00:01:27   and have this assistant just to sell your old stuff.

00:01:29   - Just sell my old shit.

00:01:31   I believe that I could hire an assistant

00:01:34   at a very generous hourly rate

00:01:37   and still come out ahead based on all the electronics

00:01:42   in my office that I really know you should sell.

00:01:45   Ben, how you doing?

00:01:47   - Yeah, I'm doing okay, how are you?

00:01:50   - Good, you didn't take this box.

00:01:51   The box lost too hard, did you?

00:01:54   You knew there was.

00:01:55   - It's complicated. I'm refusing to deal with it emotionally and stuffing it into a dark

00:02:02   place that will come out in an unexpected way ten years down the road.

00:02:05   - For those of you who don't know, Ben is a lifelong, well his favorite sport is basketball,

00:02:11   and pro basketball at that, and his favorite team is his home team, Milwaukee Bucks, and

00:02:18   they were in the playoffs this year. First time in a while, right? I mean, the Bucks

00:02:21   have...

00:02:22   No, they're there last year. The problem with the Bucks is they are a beacon of mediocrity.

00:02:28   They've regularly, they're either not in or they're in like the eighth seed for many years.

00:02:34   Or pick up the seventh seed, you know.

00:02:36   Right, which is fine. The problem now is we have Giannis Antetokounmpo, who is like one of the top,

00:02:42   you know, I think everyone agreed to top 10.

00:02:44   How would you, how do you pronounce his last name? I just know, I just say Giannis.

00:02:48   honest to God I don't even try and I've got on my wife's side we've got family

00:02:52   that's Greek so I mean I'm used to trying to pronounce Greek names but man

00:02:55   how do you say it so because it's not a Greek name it's Nigerian I've done the

00:02:59   kumpo so the original spelling is actually it's very it's very easy to

00:03:04   it's very easy to spell because it's quite straightforward let me look it up

00:03:09   here so the official spelling was or is it Oh a D E T OK you and Bo so you just

00:03:17   You just say it how it was.

00:03:19   Well show me that.

00:03:20   Paste that into the chat because I can't spell it verbally.

00:03:23   You know, you can't tell me how something is spelled and I can't I can't see it.

00:03:27   That makes so much sense.

00:03:29   So they so what they did is they took his Nigerian name and then they,

00:03:32   you know, his family, they moved to Greece.

00:03:34   Greasiest it. Oh, that's great.

00:03:37   Oh, man, that name.

00:03:38   Oh, man, if I were doing it play by play, I would just have that.

00:03:40   I would have that on the paper in front of me spelled like that.

00:03:44   That's like a phonetic spelling.

00:03:46   It's actually right. It's actually not that hard to pronounce it. That was come boss. Is that right am I saying right?

00:03:51   I got a kumba you emphasize the yeah, it's more the you said it right, but it's more the emphasis of the syllable

00:03:57   I don't know kumba I did a calm. I don't know kumba I

00:03:59   Did a kumba I've dead out. Yeah, I did a kumba yeah, so he was um yeah

00:04:05   So when he got Greek citizenship he did the spelling of his name change which wasn't until actually May May 2013, but um

00:04:12   So yeah, that's why

00:04:15   Well, he's definitely top ten. I don't I don't think that could be if they if they decided to have a new draft and every

00:04:21   You know like every player is eligible for the draft again. I would say he'd go before ten easily

00:04:26   Especially there's a new draft. He'd be top TV top three

00:04:30   Yeah, he might even be top one just because he's only 23 years old

00:04:32   Well, what what if what but what if they did it every year like like the age thing is unfair if we're gonna if we're

00:04:38   Gonna have a hypothetical we're gonna draft again

00:04:40   You know, I'm saying though if you were gonna pick up a play

00:04:43   you know, like if every season started as a pickup game,

00:04:46   and you only had him for one year,

00:04:48   'cause the next year you're gonna do the same thing,

00:04:50   I still think he'd be top 10.

00:04:52   - Yeah, I think he'd probably be five or six.

00:04:56   You know, LeBron, Curry, Durant, and Harden go first.

00:05:00   - Yeah. - And then,

00:05:01   I think Anthony Davis and Giannis would be the next two.

00:05:03   - Yeah. - In some order.

00:05:06   - Yeah. - I think Giannis' advantage

00:05:07   is he handles the ball more than Davis,

00:05:09   whereas Davis needs someone to give him the ball more,

00:05:10   but I mean, Davis has just been, he's a year older,

00:05:12   or a couple years older and it's really showing he's been absolutely incredible these playoffs.

00:05:16   But if you were starting from scratch again just given his age he would probably be the

00:05:20   number one pick.

00:05:21   Yeah, that's a good bet.

00:05:22   23, I mean geez.

00:05:23   I mean it's, you know, in the old days that's when the players, that was when they were

00:05:28   rookies, you know what I mean?

00:05:29   I mean you just gotta, you know, he has a whole career ahead of him.

00:05:32   Yep, absolutely.

00:05:33   But the point is it makes it way worse.

00:05:36   It makes the Bucs organizational incompetence and lack of queers of command and ownership

00:05:42   in fighting and like just no plan, having no plan for the future, just kind of scruffing

00:05:47   along season by season. That's fine when you're just kind of resigned to being a small market

00:05:51   middling team you can enjoy the rest of the league, which is how my basketball viewing

00:05:54   experience has gone. It is five million times worse when you, like the most difficult piece

00:05:59   in winning a championship in the NBA is the most difficult feat in team sports by far.

00:06:03   Like there's only five teams I think that have won more than three championships and

00:06:07   like 70% of the championships have been won by those five teams. Like the reality is it's

00:06:11   very, very, very hard to win. And because you need a few ingredients, first and foremost

00:06:16   is you have to have like a top five player, maybe a top 10 player, but realistically a

00:06:21   top five player. And we have that. And yet everything else with the team is just slathered

00:06:26   in incompetence. And this series is a perfect example. Just terrible coaching, terrible

00:06:31   habits, lots of mismatch pieces, and we lost to a team missing two of its best players.

00:06:38   And it's embarrassing.

00:06:39   - Friend of the show, Paul Kofasis and I were talking about this. Paul and I are not as

00:06:45   into pro basketball as you, but Paul is a Boston Celtics fan. That's his home team.

00:06:49   And when I was a kid, I was a big time Celtics fan because I loved the bird era Celtics.

00:06:56   And basketball was my sport that I played. It was the only one that I had really had

00:07:00   to... I liked baseball and I wished to hell, oh, how I wished I could hit the baseball.

00:07:04   I can't everything I hit was and I got like a practice ground ball right to the shortstop every every goddamn time

00:07:12   I'm the exact opposite as you I

00:07:16   Definitely want to be good at at basketball, right?

00:07:18   But I was much better at baseball baseballs by far was it was probably the sport

00:07:21   I was best basketball was my it was my game and I could shoot and I was a little slow

00:07:26   And I would play pickup games in college and and as soon as I saw for whoever I am a little tall and and so

00:07:33   Drexel we'd be I would play a pickup game and immediately like, you know, like, you know five minutes in

00:07:39   People who I'd never played with before would start calling me bird

00:07:43   Because you know, it's a lot of black people a lot of black guys

00:07:47   and I'm you know, maybe like two or three of us were white and I could shoot the three and I could pass and

00:07:53   They're like check out Larry Bird and it was I would be like a comma and then inside my was like, oh, that's my dream

00:08:01   So I love the bird era Celtics, but I you know once it once Jordan retired

00:08:06   I got away from the NBA for a long time, and you know I root for the Sixers now

00:08:09   I like the way these this team plays so anyway

00:08:11   Sixers are in the playoffs Bucks are in the playoffs Sixers won

00:08:14   Bucks were playing the Celtics took it to seven and if they would have won game seven it would have been Bucks

00:08:19   Sixers and I before that game seven I tried to entice Ben into booking

00:08:25   booking a trip to Philly where we could go

00:08:29   Go see the Bucks and Sixers play and to

00:08:32   To book it before the game and I couldn't get Ben to bite

00:08:36   Probably I'm a Bucks fan. I

00:08:40   anticipate the worst

00:08:42   always

00:08:43   The the the light at the end the tunnel is always an oncoming train. So the yeah, it's interesting

00:08:48   It's gonna be a replay the 80s

00:08:49   I think because the 80s it was always the

00:08:51   Selt it was the Celtic Sixers and the Hawks that were the top of the conference every year

00:08:55   And then either the Celtics or Sixers would knock the Bucks out in the second round of the playoffs and they'd play in the conference finals.

00:09:00   And then the Celtics would usually win but the Sixers won occasionally.

00:09:03   Yeah, but I think it's gonna be the same except the Sixers are gonna be the best of the three.

00:09:07   So in this case, I think the Bucks, one of those two will knock the Bucks out, the honest Bucks out in the second round every year.

00:09:13   And then the Celtics and Sixers are gonna play and the Sixers are gonna win most of the time.

00:09:16   That's my prediction of the Eastern Conference for the next two or three years.

00:09:19   I was too young to remember specifically the era except just, you know,

00:09:24   I was like my dad would be flipping through and would you know would you know my dad's a sports fan would watch but in the

00:09:28   Early years of that rivalry the Sixers actually had the better of the Celtics because the Sixers

00:09:32   Beat the Celtics in the final in a con Eastern Conference Finals in the 80

00:09:36   Then went on to lose to the rookie Magic Johnson Lakers and then 81 the Celtics won it all

00:09:43   But then in 82 was the year the Sixers won it all

00:09:46   So two out of those three years 80 and 82 the Sixers beat the Celtics in the fight in the Eastern Finals

00:09:51   That's right. Well, maybe it could turn out that way, particularly if we'll see how Imbead's

00:09:58   career goes. I mean, if he's in the long run, unable to stay on the court, then that could

00:10:03   end up being the case. I mean, Celtics are obviously set out phenomenally well. The Sixers

00:10:06   are. They all have a long-term process, a plan. That's the other thing about winning

00:10:10   a title. You need that key player, but then to get all the pieces to fit under the salary

00:10:15   cap and all that sort of stuff, it requires a multi-year plan. And the Bucs can barely

00:10:20   plan their next five minutes, much less, like quite literally if you watch their games,

00:10:24   much less the next five years.

00:10:25   So Paul Kefasas and I were talking about this the other day about this, and I think that,

00:10:32   I think this is, I don't know enough about hockey, so forgive me those of you who are

00:10:36   sports fans and who are hockey fans, but I kind of think hockey is more like baseball,

00:10:41   basketball, pro basketball, in the regard that I'm about to talk about, which is that

00:10:47   the best team as very likely, the better team is way more likely to win in basketball than

00:10:57   in any other sport.

00:10:58   Baseball, there's so much luck involved in the postseason.

00:11:04   And a single person, a pitcher, and how well that pitcher does in any given game.

00:11:09   And it's just the nature of baseball, you know what I mean?

00:11:11   Like it's, there's nothing quite like it where you know, you could have two guys on base

00:11:17   and a guy hits a home run right down the line and two feet one way it's fair and a three

00:11:22   run homer and two feet the other way it's foul and you get nothing.

00:11:26   There's just nothing like that in basketball.

00:11:27   There's no one possession in a game, you know, where so much can swing on such small variants

00:11:33   like, you know, which way is the wind blowing?

00:11:36   So baseball, it really takes a lot of luck.

00:11:41   I think hockey, because hockey you have the goalkeeper, or this goalkeeper, the goalie

00:11:46   that can get hot and can impact the game like hugely.

00:11:51   So I think hockey's probably more in the middle.

00:11:53   But basketball is, that's why it's the hardest sport to win, because it consistently the

00:11:58   best team wins.

00:11:59   And if you're the best team one year, you're extremely likely to be the best team the next

00:12:03   year.

00:12:04   It's a sport of dynasties.

00:12:05   the and especially because the thing with basketball is there's so much return to having

00:12:11   the best player. I mean like so it's but it's not like a goalie where you can get hot and control

00:12:15   the game but if you have the best player over a seven game series you're just gonna win most of

00:12:19   time and again that's that's why it's so frustrating watching that last series where we had the two

00:12:23   best players and still gonna win but I digress. Well the problem with football in terms of having

00:12:28   a better team win and it is pretty likely but because it's a one game one and done that you

00:12:34   you know, one or two bad things can happen to the better team.

00:12:37   And because you only get one game in the playoffs in football, you know, that adds to the luck.

00:12:43   Whereas basketball, you get seven games, it's best to seven.

00:12:46   And then in each individual game, you're talking, you know, somewhere in the order of 50 to

00:12:52   60 scoring attempts per team.

00:12:55   So there's...

00:12:56   - No, closer to more than that, closer to, I mean, closer.

00:12:58   - Well, I mean, scores, actual scores.

00:13:00   I'm sorry, not scoring attempts.

00:13:01   - Oh, yeah, yeah, yeah.

00:13:02   - Yeah, all right.

00:13:03   a better number. You get what? Over 100 scoring attempts per team. And so you kind of get

00:13:08   into the long run in each individual game in a way that you don't in baseball. Or football.

00:13:14   But anyway. And so anyway, what Paul and I were talking about, how in a way it can make,

00:13:20   it makes basketball the most fair of the pro sports because the best team in the league

00:13:24   is by far more likely to win the championship than the best team in the other leagues is.

00:13:31   But it actually makes it a little bit less exciting, especially to the casual sports

00:13:35   fan who's like, "Oh, I want to watch the playoffs."

00:13:37   It's like, baseball can be terribly exciting because a team with a relatively mediocre

00:13:44   record who slipped into the postseason with a wild card has a pretty good chance of beating

00:13:49   the best team in the league.

00:13:51   Whereas in basketball, the eight seed is not going to beat the one seed unless there's

00:13:54   some kind of injury to a star player.

00:13:56   Yep, that's exactly right.

00:13:58   And that's why I think with basketball,

00:14:01   Golden State's gonna win the title this year.

00:14:02   Everyone's kind of known that for the beginning of the season.

00:14:04   So I think there's an aspect of people,

00:14:07   if all you care about is just the outcome,

00:14:11   then it's gonna be a less fulfilling sport.

00:14:14   But if you love the sport though,

00:14:18   it's like the ride is the journey, right?

00:14:21   And there's an aspect of, the NBA in particular,

00:14:24   'cause the NBA has been so incredibly,

00:14:27   There's lots of things the NBA has done right.

00:14:28   One big thing is their social media policy.

00:14:31   You can post whatever clips you want of the NBA on YouTube or on Twitter or whatever,

00:14:36   and they don't police it at all.

00:14:38   You can go back and watch old games from the '80s on YouTube.

00:14:42   I just sent you a clip of this crazy dunk in this Houston, Utah game.

00:14:47   And unlike the NFL, which just police everything, you can do whatever you want.

00:14:50   And part of that is, what's come up is, there's a huge, especially among young people and

00:14:55   in general, and you follow that House of Highlights channel, right?

00:15:00   It's all NBA clips, one, because they make great clips, and two, there's no restriction

00:15:04   on it.

00:15:05   And so just kind of being a part of the ... particularly among, I think, younger people, just part

00:15:10   of the zeitgeist, like the NBA is so much more a part of it.

00:15:13   And then the NBA too, you also have that aspect where the star players are super visible,

00:15:16   they're not behind a mask, they have a big impact on the game.

00:15:20   And then the off-season and player movement and trades becomes almost as big a deal as

00:15:25   what's happening in the season.

00:15:27   It really is sort of like the soap opera, most soap-ra-esque of all the leagues.

00:15:34   And all that stuff.

00:15:35   And Twitter is such an amazing experience for the NBA in particular.

00:15:44   The NBA lives on Twitter.

00:15:46   They are sort of inseparable.

00:15:49   And yeah, if you're sort of into that, it's one of those things where it's easier to get

00:15:54   deeper and deeper and in a very sort of enjoyable way, in the best sort of way.

00:15:59   Yeah, that's true too.

00:16:00   And now that I'm easing my way back into a little bit more NBA fandom, not just this

00:16:05   year but in the last few years, but last summer I paid a lot more attention to the off-season.

00:16:10   And it really caught on on Twitter as to just how almost, like if there was an NBA show

00:16:16   about a fictional version of the NBA,

00:16:21   the off-season episodes would be better

00:16:25   than the in-season episodes.

00:16:28   I really mean it, no joke, in terms of intrigue

00:16:31   and stuff to argue about on Twitter,

00:16:35   it goes, "Alright, post-season's the most interesting,

00:16:38   "but the off-season is more interesting

00:16:40   "than the regular season."

00:16:41   It really is.

00:16:42   - Right.

00:16:43   Well, it also involves all the teams, too, right?

00:16:45   and hope springs eternal and everyone's like, "This might be the year."

00:16:49   And also, I think the other thing that's really interesting too is going back to that, if

00:16:53   you're a certain sort of person, because there is that sort of long-term nature to winning

00:16:57   a championship, it really does take years.

00:17:00   And you have Sam Henke in Philadelphia in the process and we're gonna tank, it'll be

00:17:03   bad for many years.

00:17:04   There's so many opportunities for genuine disagreement, you know what I mean?

00:17:08   You could have a philosophical debate about that, you could have a tactical debate, you

00:17:11   have a strategic debate, you could have a, "The world is falling apart" debate.

00:17:14   There's so many angles to just argue about endlessly.

00:17:18   It really is tailor made for Twitter.

00:17:20   What is Twitter, if not a forum, to argue endlessly?

00:17:22   All right, let's get into the show.

00:17:26   I got some follow up from last week's show.

00:17:27   I was Jim Dalrymple on.

00:17:29   I have two points I want to clarify.

00:17:31   One, when we were talking about this new Google chat, RCS thing that they're pushing as sort

00:17:37   of a successor to ... Or not even sort of.

00:17:40   They're pushing it as a successor to SMS.

00:17:43   I think I got lost in the--

00:17:46   - It literally is a successor to SMS.

00:17:48   I think that's the thing that people get,

00:17:50   are kind of got lost in the details a little bit.

00:17:53   Like it's not a chat service.

00:17:55   - Right. - It is literally--

00:17:56   - But they're calling it chat.

00:17:58   (laughs)

00:17:59   So there's two things that are confusing about it.

00:18:00   And I think they threw me off.

00:18:02   One is that it's from Google,

00:18:05   and we're just used to Google coming out with,

00:18:08   on an annual basis a new, all right, here's our new,

00:18:13   we're not putting a new name on the old thing,

00:18:14   we've got an altogether new idea to get people to chat.

00:18:18   And so I'm used to that, and so I attribute

00:18:21   way too much of it to Google as a possible

00:18:23   centralized role in this thing.

00:18:28   And then two, the name chat, right?

00:18:32   But it really is just like a next generation SMS.

00:18:35   But the thing that I think I would like to whatever, adjust my statement on, is on quote

00:18:46   unquote encryption versus end to end encryption.

00:18:49   End to end encryption is the only encryption that would matter in a messaging service.

00:18:53   And if it's not end to end encrypted, it might as well not be encrypted at all.

00:18:57   Like some kind of encryption that only takes the first hop from the device to some, you

00:19:01   you know, wherever it goes before it gets to the destination but isn't encrypted after

00:19:04   that is better than nothing but barely better than nothing.

00:19:09   Really all that matters is if it's end to end encrypted because otherwise you're, and

00:19:12   it's not just, I think Jim and I got too caught up thinking about like the protection from

00:19:17   like law enforcement and government snooping and stuff like that.

00:19:21   There's all sorts of bad actors that could get involved, including whoever it is that

00:19:25   runs your wifi if it's not you, if you're like in an airport or a coffee shop or even

00:19:30   just somebody in your family that you don't trust.

00:19:35   If you're the kid in the family and maybe you've got a problem with the stepfather or

00:19:39   something like that, if you don't have end-to-end encryption, you really can't trust your communication.

00:19:46   If end-to-end or bust is the point I would like to make, and I think I was kind of mushy

00:19:51   on that last week.

00:19:54   - Yeah, the other thing that I would say,

00:19:56   'cause I didn't talk about it on,

00:19:58   I wrote about it last week,

00:19:59   but I didn't talk about it on next one,

00:20:00   so this is a chance for me to talk about it too,

00:20:02   is the point that I was trying to make

00:20:04   when I was writing about this is,

00:20:06   I think folks were a little hard on Google

00:20:10   in that there's a theoretical world

00:20:13   and there's the real world that we actually live in.

00:20:16   And what I mean by that is,

00:20:17   all these current end-to-end encrypted chat services,

00:20:22   they're all centralized.

00:20:23   And that centralization is critical to how they work

00:20:26   because it's a centralized player

00:20:27   that handles the key exchange.

00:20:29   And we won't give you the vagaries

00:20:30   of how encryption works,

00:20:32   but basically the person sending you a message

00:20:34   has to have your key.

00:20:36   And in this aspect, the RCP is sort of like

00:20:38   communication before the communication,

00:20:40   and it can't be initiated by the sender,

00:20:42   it has to be initiated by the recipient.

00:20:43   It's very weird, right?

00:20:44   I have to give you the means to contact me

00:20:48   for you to contact me,

00:20:49   but how do I know that you want to contact me?

00:20:51   Like, what Apple does, for example, or WhatsApp,

00:20:55   or whatever it might be, or Signal, they all work this way,

00:20:57   is they have a centralized server where

00:21:00   that key is associated with a username or an ID,

00:21:03   like your Apple ID or a phone number.

00:21:05   And that centralization is how it works.

00:21:07   And that's how, you know, LL worked,

00:21:09   like Google's previous sort of chat offering.

00:21:11   And the issue is that that is ideal.

00:21:15   But if the carriers and OEMs are never, ever going

00:21:18   to make all of the default messaging servers

00:21:20   or whatever else Google puts out there, then the only alternative-

00:21:22   There's no way they're gonna agree on a centralized provider, right?

00:21:26   Exactly, exactly.

00:21:27   And yeah, and people are like, "Oh, well, what about HTTPS?"

00:21:30   Well, HTTPS depends on centralized certificate authority.

00:21:33   Like, there has to be a central player.

00:21:36   That's the only way it's gonna work.

00:21:37   And also HTTPS, you know, HTTPS is really only possible because Netscape introduced

00:21:44   it in 1994, whenever it was.

00:21:46   It had to be there at the beginning and sort of built in.

00:21:49   The question is how are you gonna build something

00:21:51   into the system as it is?

00:21:53   And my point is that it's not theoretically possible

00:21:55   to have a decentralized encryption sort of method,

00:21:58   'cause HTTPS shows you could.

00:22:00   It's that realistically, for all practical purposes,

00:22:03   it's never ever going to happen,

00:22:04   which meant Google was in a very sort of difficult position

00:22:07   because their choice was, the choice is not

00:22:11   an end-to-end encryption or not an end-to-end encryption.

00:22:14   It's stick with SMS as crappy as it is

00:22:18   or make it better, but just like SMS,

00:22:21   it's gonna be unencrypted.

00:22:22   And you could say that maybe they should stick with SMS,

00:22:25   and that way customers will,

00:22:27   themselves, voluntarily go out and use something

00:22:30   like WhatsApp, and that's better for customers.

00:22:31   But I think you could be a little sympathetic

00:22:33   to Google's position, why they would prefer

00:22:36   to not have that outcome either.

00:22:38   - Yeah.

00:22:39   The second point of follow-up from this,

00:22:40   same discussion with the same show

00:22:42   is Jim and I, at my prodding, were speculating

00:22:45   on how many active iMessage users there are.

00:22:49   'Cause Apple doesn't talk about that,

00:22:53   and they haven't really talked about iMessage numbers,

00:22:56   period, in a couple of years.

00:22:58   The most recent was actually Eddy Cue on this show,

00:23:02   like two years ago, I think,

00:23:04   and he said that they were doing a peak

00:23:06   of 200,000 messages a second,

00:23:08   but I think that was from like March 2016.

00:23:11   So who knows where that number's at now,

00:23:14   I haven't said anything recently, but I think the problem Jim and I made is

00:23:18   We're ball parking well how many active users of like iPhones are there and

00:23:25   You know maybe let's guess that half of them are using iMessage or something

00:23:31   I think Jim was a little bit more bullish than than me

00:23:35   But I think the thing that both of us sort of overlooked on the fly and and our American Central

00:23:41   centrism

00:23:43   Is to blame is that we I knew this, but I really didn't think of it on the spot is just how

00:23:50   Different messaging is used country by country around the world and you know this you know we've you've you're the one who opened my eyes

00:23:58   to it

00:24:00   But it's I think the best word to phrase it is balkanized. You know it's here in the US SMS is

00:24:06   hugely popular

00:24:11   But amongst iPhone to iPhone users, iMessage is. iPhone to iPhone, you know, communication is, in my experience, largely iMessage.

00:24:20   But there are places in countries in Europe, a lot of countries in Europe,

00:24:26   maybe most countries in Europe, that are dominated by WhatsApp. And I was talking to people on Twitter about it this week, and

00:24:32   and my question is, well, is in this mixed group of people you're talking about, are there a lot of Android users? And the answer

00:24:38   Yes, there's a lot of Android users. So therefore iMessage really can't be the thing, you know

00:24:43   It wouldn't work like it does for me where almost everybody I chat with is on iMessage

00:24:48   So it's like by being on iMessage and ruling out Android people

00:24:52   I don't know. I can't remember the last SMS I got that wasn't from like

00:24:58   Some kind of automated service that still uses SMS for you know confirmation codes or something like that

00:25:05   but for actual personal communication, I

00:25:08   Honestly think I really do I think it's been months since I've gotten an SMS

00:25:12   I I don't I don't know people who have Android phones

00:25:15   Yeah, oh, sorry well, but I'm just saying certain countries in Europe. It's whatsapp

00:25:20   Other places Facebook messenger, I know Facebook messenger it gets a lot of use in the u.s.. To

00:25:27   But not among people I know and then in you know countries like

00:25:31   like

00:25:34   In Asia, there's there's apps like line and China has we chat, right?

00:25:39   Yeah, no, I think you're exactly right about the balkanization and and I would say in the vast majority of countries in the world it is

00:25:48   Something other than SMS because the other one thing that's weird of the US because the US

00:25:53   Was behind in SMS, but then the carriers all bundled

00:25:57   most people end up getting unlimited talk in tax plans and

00:26:00   And that's kind of like when SMS really exploded,

00:26:03   because people in the US weren't paying for it.

00:26:05   But in most other countries in the world,

00:26:06   people have always paid for SMS messages.

00:26:08   And that's why when WhatsApp came along--

00:26:10   WhatsApp's biggest feature by far

00:26:12   was that it was basically the exact same as SMS,

00:26:16   but it was free.

00:26:17   And there is no greater feature when

00:26:19   it comes to acquiring customers.

00:26:20   And that's the challenge with all these services

00:26:23   is the number one feature of any of these services,

00:26:26   beyond being free of course, is are your friends on it.

00:26:29   And so once one sort of gets a hold, it's very, very difficult for something else to

00:26:33   come along.

00:26:34   So I think the line is kind of Japan, Thailand, Taiwan, WeChat is in China, South Korea is

00:26:42   Kakao, and basically the rest of the world is all WhatsApp.

00:26:44   Like WhatsApp is super, super dominant, and the one big exception is the United States.

00:26:48   The United States, because of that sort of weird SMS remains stronger, is very sort of

00:26:54   a fractured.

00:26:55   iMessage is obviously a big deal there.

00:26:57   And I think in the context of Google and this chat/RCS sort of effort, it's really, I think,

00:27:03   first and foremost about the North American market.

00:27:05   It's about having a competitive offering to iMessage, because right now the Android experience

00:27:10   for messaging is terrible, unless you use a third-party service.

00:27:14   But using a third-party service is challenging in the States in particular, because it's

00:27:18   not like everyone already has WhatsApp installed.

00:27:21   And so I think it's really about the U.S.

00:27:25   And so in that respect, your US-centric experience is actually really all that matters when it

00:27:32   comes to RCS, I think, in general.

00:27:33   Because the rest of the world, it's all kind of ... That battle's been fought.

00:27:37   It is what it is.

00:27:38   And the funny thing, it's funny because I don't really think about it because it seems

00:27:41   like such ancient history where you paid a noticeable amount for SMS.

00:27:49   And I'm not quite sure when it-

00:27:51   Well, when I came to Taiwan, I had to pay.

00:27:54   Even though in the US I had not paid for a long time.

00:27:56   So the US is unique here.

00:27:58   And that's one of the reasons why the US remains fractured in the messaging market, because

00:28:03   there's never been that impetus to get away from SMS.

00:28:07   There's no greater motivation to find an alternative to SMS than if you're paying for SMS and you

00:28:11   don't have to pay for the other one.

00:28:13   Whereas that's never been the case in the US.

00:28:14   And it really changes behavior.

00:28:16   If you only get 100 SMS messages from...

00:28:18   I mean, I used to see those stories like 10 years ago.

00:28:21   see stories of people who had a family plan with 500 text messages a month, and the teenager

00:28:28   sent like 5,000 of them, and they get a $600 phone bill or something like that. It was

00:28:36   a noticeable amount of money. And in hindsight, it seems crazy that you would have just a

00:28:43   mere hundreds of text messages to send per month. You get like six a day, and then after

00:28:51   You start paying and it reminds me of you know, and when I think back to the days

00:28:55   I just think like oh my god, it is comical and I you know

00:28:59   It makes me feel old is is long-distance phone calls even like when I was in college

00:29:05   I I spent a literal fortune me and Philly and Amy in Pittsburgh. I

00:29:11   Spent almost every dollar I had to my name other than like rent and ramen noodles on long-distance

00:29:19   Phone bells

00:29:21   Yeah, and so it's so for us who wanted to talk a long time on the phone it we paid a lot

00:29:27   And then when I was a kid, it would be like if my grandparents called it would be like, you know

00:29:32   John come here say hi and it'd be like hi and I'd start telling a story and they'd like yank the phone and they'd say

00:29:37   nope

00:29:39   Like I remember my dad actually like watching the clock in the kitchen like because he knew that it was built

00:29:45   It wasn't by the second it was by the minute

00:29:47   So he was damn sure to get off after you know before two minutes went by

00:29:51   Right one minute and 58 seconds, right?

00:29:55   it like totally

00:29:58   informed like he's over it now my dad is

00:30:00   80 and you know, he's gotten past it but even up until like 10 years ago

00:30:06   He would still if I talked to him on the phone. He'd be talking fast

00:30:10   Even though we were no longer paying long-distance

00:30:15   Phone does he'd still you know, he just had this sixth sense of this is cost. This is gonna cost me a fortune

00:30:21   I'm this is gonna be one minute or less

00:30:23   That's funny

00:30:26   God, can you even imagine what you would pay to like talk to your family from Taipei to to Wisconsin if you were there like

00:30:33   25 30 years ago

00:30:35   Yeah, I think you just didn't do it. I mean what I

00:30:42   I mean, I first came here 15 years ago and you would go to the 7-Eleven and get a calling

00:30:47   card and then you'd roll up to a pay phone and use your calling card because that was

00:30:52   by far the cheapest way to call back.

00:30:55   That came down, I think, pretty quickly when I was there.

00:30:57   I discovered within a couple of years that you could actually just call direct and it

00:31:00   would be reasonable.

00:31:01   But yeah, but obviously now it doesn't really cost, it's totally free.

00:31:06   I've told both of these stories before, but they're worth retelling.

00:31:10   When I was at Drexel in the early to mid '90s, we had a 7-Eleven on campus.

00:31:16   I'm sure it's still there.

00:31:18   Incredibly busy, incredibly popular.

00:31:20   Perfect location for a 7-Eleven on a college campus.

00:31:24   Two or three pay phones out front.

00:31:27   And somebody told me the one day, like middle of the school year, that the pay phone on

00:31:33   the right was giving out free long distance.

00:31:37   And I said, "Who told you that?"

00:31:38   and he said, "Someone's already told him."

00:31:39   And I was like, "What the hell?"

00:31:41   But I was going, you know, I had to walk by it anyway.

00:31:43   And so I picked it up and I got the dial tone

00:31:46   and I called Amy's number and she picked up the phone

00:31:50   and I was like, "Holy shit!"

00:31:53   I just, all I did, it just worked like a regular phone.

00:31:56   I just picked it up, dialed her number,

00:31:59   and we had like, I had nothing,

00:32:00   I wasn't really ready to talk to her,

00:32:02   but I told her, you know, "Hey, this is amazing."

00:32:06   And I literally, the very next day,

00:32:09   I swear to God, the next day, I walked by

00:32:12   and it was like the line to buy Pearl Jam tickets.

00:32:17   There must have been 30 people in line to use that phone.

00:32:23   And they had chairs. - That was amazing.

00:32:25   - They had chairs, they had mugs, thermoses of coffee.

00:32:29   And it was like all of the Drexel,

00:32:35   Like any school with its strong math and science department had tons of students from all over

00:32:40   Asia.

00:32:41   You know, it looked-

00:32:42   Oh, it worked internationally.

00:32:43   Oh yeah, yeah.

00:32:44   Yeah, it worked anywhere in the world.

00:32:47   So it was all of these, you know, like grad students from India and China and wherever

00:32:54   else they were from, but they were, you know, it looked like the United Nations.

00:32:57   It was crazy.

00:32:59   And then like later on that same day, I walked past again and there was nobody there.

00:33:03   (laughing)

00:33:05   - It got fixed.

00:33:05   - It got fixed.

00:33:06   (laughing)

00:33:08   Oh my God, it was so funny.

00:33:10   But like words spread.

00:33:12   - So why, why, why did, why did, why did,

00:33:13   why did it, it was preparing you for your future career

00:33:16   covering people winding up for the iPhone.

00:33:17   - Yeah, exactly.

00:33:19   All right, let me take a break and thank our first sponsor

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00:33:48   No, man, they, when they, they roast it

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00:37:20   Ah, got lots to cover. It's a good thing we don't waste time. I wanted to talk about this

00:37:25   just briefly at least. This, there's a new book out from Ivan Seidenberg and I'm obsessed

00:37:32   with this. This is one of the things, this is why I love my having my own website and

00:37:37   I can just write about what I want to write about and I don't have to pitch somebody on

00:37:40   this because I imagine if I had to like pitch this as something I'm going to spend a day

00:37:44   day obsessing over it, they'd be like, what the fuck are you talking about, John? But

00:37:48   former Verizon CEO, Ivan Seidenberg has a book coming out. He was the CEO, I don't know,

00:37:54   until like 2011, something like that. So he was there. He was the CEO at Verizon when

00:37:59   the iPhone came out in 2006. And he tells this story in his book that he was at the

00:38:05   Allen and Company Conference. You know, you ever see that kind of site, that conference

00:38:10   where Jeff Bezos was pictured looking like a badass with his sunglasses and a vest on.

00:38:16   Forget where the hell it's held. But Tim Cook goes there now. All these industry big shots

00:38:20   go there. And he tells this story in the book that he was, July 2006, he was walking up

00:38:27   to Bob Iger and Bob Iger had some kind of phone in his hand that he didn't recognize

00:38:31   and then he kind of tried to put it away and he says, "Hey, what was that, Bob?" And he

00:38:36   ah man it's gonna change the world but I guess you know can't show it to you. And he, Seidenberg

00:38:45   thinks it was an iPhone because Iger, Bob Iger knew Steve Jobs. Steve Jobs is on the board at

00:38:52   Disney. They have the whole Disney Pixar relationship. I think that's crazy. The more I think about it,

00:38:59   the crazier I think it is. And I don't know if Seidenberg is being just being a fool by,

00:39:08   you know, that he had, I don't know, like a ESPN phone or something like that. Or if he just made

00:39:16   the whole story up. But there's no way in my mind, there is no fucking way that Steve Jobs is letting

00:39:21   anybody outside Apple have an iPhone six months before it was even announced and a full year

00:39:27   before it actually came out. No way.

00:39:30   Yeah, no. The iPhone didn't even work at the introduction. That was what made the introduction

00:39:39   part of what made it so amazing.

00:39:40   Well, you know what? So it definitely struggled to get through the demos, and the stories

00:39:45   I've heard-

00:39:46   Yeah, I'm being a bit hyperbolic.

00:39:48   Well, they had-

00:39:49   There's no way it was usable by anyone not at Apple.

00:39:52   Right.

00:39:53   But six months before it was even unveiled.

00:39:55   I've heard since I started obsessing on this, I've heard that it's plausible, or possible.

00:40:02   It's implausible, but it's possible.

00:40:06   That it wasn't as bad as you might think, and that the press demo units in January 2007

00:40:14   might have been crippled in different ways.

00:40:19   I didn't get to see one then, I was too far out of the loop, but Jason Snell and Andy

00:40:23   and out Co and Glenn Fleischman all got to see and I think like do little hands-on with

00:40:29   with the iPhone in January 2007 and when those guys all said was that there were certain

00:40:34   apps like the ones that you would think of more as like widgets quote-unquote like calculator

00:40:38   in the stocks and a few others were literally just screenshots like you'd tap the app and

00:40:43   it would show a screenshot of the calculator but you there was nothing you could do it

00:40:47   It was just a screenshot of the calculator UI.

00:40:52   I heard yesterday from somebody who would definitely know that that's not really a reflection

00:40:57   of what Apple themselves were using in January 2007.

00:41:03   Those units were set up that way because the ones that Apple was using had so much other

00:41:08   stuff they didn't want people to see.

00:41:11   It was almost like there were two kinds of iPhones in January 2007.

00:41:14   That makes sense.

00:41:15   Apple themselves were using internally, and then a special version of the OS cooked up

00:41:20   for the press, and probably a third version, which was the ones that were cooked up for

00:41:24   the on-stage demos, you know.

00:41:26   But it-

00:41:27   Yeah, and that makes sense too, because there's no way they could go from like non-functional

00:41:29   to shipping in five months either.

00:41:32   That's exactly-

00:41:33   That's a good point.

00:41:34   That's almost exactly word for word what the little birdie I talked to yesterday said.

00:41:38   But still, like he said, July 2006, he said it was wrong.

00:41:43   But the other thing too, and this just came out today, there's a guy on Twitter, I've

00:41:48   only got his handle here, Johnapple235, let me see if he's got his real name on Twitter.

00:41:54   Nope.

00:41:55   Sounds like his real name.

00:41:56   I don't think it's his real name, but Johnapple noted, I'll put this in the show notes, that

00:42:03   it's Scott Forstall's excellent interview at the Computer History Museum last year with

00:42:08   John Markoff, formerly of the New York Times, and he told some great stories about the development

00:42:13   the iPhone, but he said like in the early days for a long stretch, there were only two

00:42:17   people in the world who had iPhones to carry around and uses their daily driver phone,

00:42:25   Steve jobs and Scott forestall. I'll put a link in the show notes to that part of the

00:42:29   video, but he tells this funny story where he said like, he'd have his iPhone and you

00:42:35   know, it'd be getting ready to go to bed and get like a fry or Saturday night, you know,

00:42:39   get a phone call at 11 and he'd be like, "Scott, it's Steve."

00:42:42   And he'd say, "I'm at this party, I'm bored."

00:42:44   So I went in the bathroom and he goes,

00:42:46   "I've been looking at the calendar

00:42:47   "and I'm thinking about where we're putting these labels."

00:42:50   And for Stahl, I don't wanna go too far into it.

00:42:53   He tells me better than I could, but he's like,

00:42:55   "So I opened my calendar app and I start looking."

00:42:57   And I'm like, "Okay."

00:42:58   And he's like, "Yeah, and this icon,

00:42:58   "I don't think the shade of blue is right.

00:43:00   "I think we gotta move it in this direction," or whatever.

00:43:03   And then he'd be like, we'd talk for like half an hour

00:43:06   and he'd be like, "Aw, damn, somebody's knocking

00:43:09   on the door, they probably think I'm constipating. I gotta go.

00:43:15   It's not just ... Another data point here too is there was a Wall Street Journal story

00:43:22   in February 2007, a month after the announcement about how Apple showed the phone to Singular

00:43:28   Wireless, which was AT&T was then called Singular Wireless. The CEOs of Singular Wireless did

00:43:37   not see the iPhone until a month before.

00:43:40   So they had been negotiating the deal and they'd been working together for two years.

00:43:45   So like, Singular knew it was coming, but they were not allowed to even see the finished

00:43:50   device until December, and Apple was announcing it in January.

00:43:54   So if Apple's not showing their cell phone partner the phone, what are the chances they're

00:43:58   showing Bob Iger?

00:43:59   It seems quite low.

00:44:02   And even if it's, you know, like, why would you show Bob Iger and why would you trust

00:44:06   him to keep it secret when even in the anecdote that claims that this is what happened, he

00:44:10   was using it at this conference where he was in eyesight of the Verizon CEO.

00:44:17   If the story is true, the story itself would explain why Jobs would have been an idiot

00:44:23   to let Bob Iger have one.

00:44:25   Well, not just that, but Apple, if there actually ever were negotiations with Apple and Verizon,

00:44:30   it would have happened before that point because the decision about what wireless radio to

00:44:34   use would have had to have been made long before then.

00:44:38   Especially given that Apple ... It already takes two years to build an iPhone today.

00:44:42   When Apple's building the first one and they have to actually learn how to do cellular

00:44:45   transmission for the first time, it sure as hell took longer than two years to figure

00:44:50   that out.

00:44:51   So if there were ever any sort of negotiation with Verizon, it would have had to have happened

00:44:55   before July 2006.

00:44:57   Yeah, it's just a weird story and I find it very, very hard to believe.

00:45:01   And I think it's bullshit.

00:45:04   he's lying about it or whether he's just being an idiot and that it was like a sidekick,

00:45:08   you know, or some one of those phones or something like that, who knows?

00:45:12   But I really, I would bet heavily that it was not an iPhone.

00:45:15   And I'm going to take Scott Forstall's word that there were only two people, because the

00:45:22   two people who he says had it are the two people who I would believe.

00:45:26   Yeah, that also sounds like a very Forstall sort of story to stay, to emphasize that it

00:45:31   was him and Steve Jobs that had it.

00:45:33   - That's a very in-character anecdote for Scott Forsstahl.

00:45:37   - Right.

00:45:38   I don't have anything more to add about that, though.

00:45:44   All right, next topic I've got here is

00:45:46   airport base stations are now end of life.

00:45:49   I actually knew about this last week,

00:45:53   the day that Jim and I recorded,

00:45:55   but it wasn't out yet,

00:45:57   so we just didn't talk about it.

00:46:02   And it's funny because I think if I had talked about it last week, I would have had a slightly

00:46:07   different take than I do now that I've had a week to think about it.

00:46:10   Interesting.

00:46:11   Give us both.

00:46:12   What was the original?

00:46:14   Well, the original take I think is almost best summarized by a ... There's a tweet by

00:46:22   Dr. Drang.

00:46:23   Do you follow Dr. Drang on Twitter?

00:46:25   He's like a- Oh, of course.

00:46:26   One of my favorites.

00:46:27   Yeah, and boy, that guy's fantastic.

00:46:28   So here's his tweet.

00:46:29   I'll put it in the show notes.

00:46:30   The airport is like the Laser Rider, something Apple had to make to push computing in a certain

00:46:35   direction.

00:46:36   Both products hung around well after that push was no longer necessary.

00:46:39   And I would say, saying that, and if you don't remember the Laser Rider, and when Apple was

00:46:45   in the printer business and how revolutionary the Laser Rider was, it was remarkable.

00:46:50   It really was.

00:46:51   In 1985, Apple introduced the Laser Rider and fundamentally altered the nature of printed

00:46:58   business communications. In 1986, the Laser Rider Plus was introduced, bringing even greater

00:47:05   flexibility to the printed page. With the Laser Rider and the Laser Rider Plus, Apple

00:47:13   has today become the leader in the desktop laser printer market. However, new opportunities

00:47:20   are developing in the areas of higher throughput, lower cost, and greater flexibility. As application

00:47:28   areas grow, so does the demand for more sophisticated laser writers.

00:47:35   To meet this need, Apple has created the LaserWriter II family of printers, the second generation

00:47:43   of laser writers. The LaserWriter II NTX, a high performance, expandable, network laser

00:47:52   printer. The LaserWriter II NT, the mainstream network laser printer. And the LaserWriter II SC,

00:48:03   an entry-level single-user laser printer. NTX, for networkable and expandable. NT, for networkable.

00:48:14   SC, for SCSI interface. It was like the first thing was that most printers back then were like

00:48:21   dot matrix printers and they were loud and noisy and so low resolution is to be

00:48:26   almost laughable. I mean you actually get better resolution output out of like a

00:48:30   cash register with the heat transfer and you could you know like yeah you can

00:48:36   still see the pixels on those things even today. It was like you could see

00:48:39   that not only could you see the pixels they weren't really even aligned right

00:48:42   and then you all of a sudden you have this $300, 300 DPI laser printer where

00:48:48   Every is always a lot more than $300 not 300 DPI I said

00:48:52   And also, you know setting up the idea of an of a printer on a network

00:48:59   And if you were gonna spend as much as a laser writer cost in the mid 80s

00:49:03   So just drop it in it launched in 1985. It was

00:49:07   $6,995 which is the equivalent of

00:49:11   $15,916 today so

00:49:13   It was the price of a small car, basically.

00:49:16   Right.

00:49:17   So, yeah, imagine spending $15,000 on a printer today, but in certain environments, like some

00:49:25   kind of shared computer lab at a college or an office, or especially if you worked in

00:49:35   the graphic design industry, it was worth it.

00:49:38   It was almost a no-brainer, but you'd need to...

00:49:41   You wouldn't want to have it hooked up to one computer.

00:49:43   Like imagine if Ben was the guy who had the laser writer.

00:49:47   Hey, Ben, I need you to print something for me.

00:49:50   Hey, Ben, print this again.

00:49:53   Ah, shit, I had a typo, Ben.

00:49:54   Give me another copy.

00:49:56   It had to be networked.

00:49:58   And setting up a network printer in 1985 or 1986

00:50:02   was like, forget about it.

00:50:04   And then Apple came up with local talk

00:50:07   and it's relatively inexpensive.

00:50:09   and normal, you didn't need any kind of IT pros

00:50:12   or computer experts.

00:50:14   It was everything that the Macintosh exemplified.

00:50:18   You'd buy these things, you'd hook them up

00:50:19   into the serial port on the back of your Macs,

00:50:23   and you'd go to the chooser,

00:50:25   and there as an output was the laser writer.

00:50:29   And you'd click on the icon,

00:50:30   and then every time you hit Command + P in any app,

00:50:34   it would show up as the output.

00:50:36   and you'd hit the print button,

00:50:39   and you would get this unbelievable 300 DPI output.

00:50:43   - And this was mind blowing.

00:50:47   It's hard to convey how utterly mind blowing

00:50:50   this was at the time.

00:50:51   And I'm projecting 'cause I was five years old,

00:50:53   but by all accounts, I should say it was mind blowing.

00:50:56   - Well, I didn't see,

00:50:57   I don't know when I first saw a laser writer.

00:50:59   It certainly wasn't 1985.

00:51:01   I don't remember.

00:51:05   I might've--

00:51:05   It's interesting though because it was an integral piece.

00:51:08   I think the ATP guys talk about the various heydays of Apple.

00:51:11   And one of the ones that naturally--

00:51:14   Syracuse would pick four instead of picking one.

00:51:16   But one of the ones he picked out

00:51:17   was the birth of desktop publishing

00:51:21   and when that became a real thing.

00:51:23   And The Wager Rider was a critical piece of that.

00:51:25   It was a really great example of Apple giving birth

00:51:29   to an industry by virtue of creating

00:51:31   a critical piece of hardware that

00:51:33   made that industry possible.

00:51:35   And the GUI and the Mac was a big part of it.

00:51:37   But the fact you could instantly print it out and see

00:51:40   what it looks like and make sure everything was right

00:51:42   was a major part of it as well.

00:51:44   And Apple had to make it themselves.

00:51:45   Yeah.

00:51:46   And it was-- even into the '90s, even into my time

00:51:50   at the Drexel's student newspaper,

00:51:55   my beloved Triangle, we would put the output together

00:52:01   for the entire-- it was like a tabloid-sized newspaper.

00:52:04   And every page was put together from our laser writer output.

00:52:09   Actually, we had an HP by that time, by the '90s.

00:52:12   But we'd laser print the pages, put them together,

00:52:15   and then we'd have them on-- I forget what we--

00:52:17   I forget the hell we called it.

00:52:19   I can't believe I've forgotten.

00:52:19   But it was like this sticky stuff

00:52:21   that we'd put them on cardboard.

00:52:23   So it would be-- we printed on nice paper, just

00:52:27   regular paper, though.

00:52:28   And then we had this like spray stuff.

00:52:30   You had to do it in a special room because it was such a mess.

00:52:33   But it was like, we had this room that was sort of like,

00:52:36   instead of feeling like it was like a newspaper office,

00:52:38   it was like a art room, because it had that smell

00:52:40   of like, aerosol, sticky stuff.

00:52:43   And you'd be very careful and nicely, neatly press it.

00:52:47   And then, you know, the last thing we'd do

00:52:49   before we'd close for the week is, you know,

00:52:51   like the editor-in-chief and the managing editor

00:52:53   would sit there and read every page

00:52:55   from corner to corner again, you know,

00:52:56   make sure everything's right.

00:52:58   And then a guy from the printer

00:52:59   would come and pick up those boards.

00:53:01   Like, so that's our delivery.

00:53:02   Our delivery wasn't like a disk.

00:53:04   It wasn't like a zip disk or a PDF or anything like that.

00:53:09   It was laser printed output.

00:53:12   And then they would just take it and it was photo ready.

00:53:14   They'd, you know, I don't know what the hell they did, but you know, a couple hours later

00:53:17   we'd have thousands of copies of an actual newspaper.

00:53:21   But the fact that we are cell, I remember asking, I remember at one point like asking

00:53:26   like, "What the hell did they do before this?"

00:53:28   And then like, you know, I kind of found out and I was like, "I don't think I would have

00:53:31   have been in the newspaper before the laser rider.

00:53:34   That was too much work.

00:53:35   It was ridiculous.

00:53:36   Yeah, I did the student paper thing, too.

00:53:41   And we still had that room where that was done.

00:53:45   But it had since been retired.

00:53:48   At that point, we were laying out in Quark.

00:53:50   Well, we used Quark, but the output was paper.

00:53:52   We printed the pages.

00:53:53   No, but we would put it out to PDF,

00:53:56   and then we could submit it over the internet to the printer.

00:54:00   But it was still fresh enough to that era

00:54:04   where that room was still there,

00:54:05   and the markup table, or cut-up table,

00:54:07   or whatever it was called, was still in there.

00:54:09   But we were no longer using it.

00:54:12   I know what you're talking about,

00:54:14   but I never actually cut up a paper.

00:54:16   - Most of the ads we got, we got as paper.

00:54:19   We'd get ads, and they were paper,

00:54:21   and we would scan them.

00:54:25   It wasn't like we would cut them out

00:54:27   and paste them on the thing.

00:54:28   We'd scan them at high resolution,

00:54:30   so we could have the whole, everything was in Quark.

00:54:33   But still, that's how people delivered stuff to us

00:54:36   because it was a wild, I mean, PDF,

00:54:39   sort of like in the time when PDF was starting to take off.

00:54:41   But there just was no reliable interchange.

00:54:44   And you'd send somebody an EPS file,

00:54:46   and God help them if they didn't have the right font.

00:54:49   It was just too hard.

00:54:50   - Oh yeah, we were still very much

00:54:53   in the font headache phase, for sure.

00:54:56   - Oh my God, it's like, what version of Futura do you have?

00:54:59   Futura STD. Oh, STD? Nobody's using that anymore.

00:55:04   Oh, that one spread like crazy.

00:55:08   I thought I was trying to think of a joke. I did. There was a version of Futura called Futura that was Futura STD.

00:55:17   But anyway, that was my take on AirPort a week ago where it's like, "Well, I kind of miss it."

00:55:23   And in a way that I still kind of wish Apple made printers really just because I think they'd be better than the ones that you

00:55:29   You know, it's I think they would still be the best

00:55:31   But I get it and you know, like I don't eat my house has been wired up with heroes

00:55:38   You know for at least two years now

00:55:40   And our heart wasn't in it and you know

00:55:44   You know

00:55:46   Gurman reported back in November 2016 that they were no longer developing them.

00:55:50   And so it's from then until now when they officially pulled the plug.

00:55:53   But now that I think about it after a week and talking to seeing a couple of other people's things,

00:55:58   I think I agree with the drag take insofar as why Apple created airport in the first place.

00:56:05   Because in 1999 or 98, whenever that was, remember when Schiller jumped off the, in the demo?

00:56:12   There was like a on stage demo where Phil Schiller jumped off like a 10-foot. All right, so you'd be yes, you'd be disconnected

00:56:19   Yes, it was this tip. Yeah and to prove that it wasn't that it wasn't connected anything

00:56:23   Oh, yeah

00:56:23   I remember I remember having to decide whether you want to add an airport card or not to to write your laptop, right?

00:56:29   You had to add a card but Apple made something that would you know, I've they foresaw that wireless, you know Ethernet

00:56:36   You know Ethernet speeds over wireless, you know is that's the future, you know

00:56:41   They're still pushing towards wireless technologies today, but they saw that wireless networking

00:56:50   was the way of the future.

00:56:51   Networking's always been hard to set up, and so if they did it all themselves, they could

00:56:55   make it easy, and they could make their own nice app for managing the base station, et

00:57:01   cetera, and so forth, and that's not necessary anymore.

00:57:04   But I think the difference with laser printers and the airport today is, okay, there's other

00:57:09   ways to easily set up a network today and you know like Eros and other brands

00:57:14   you don't have to go through. Frankly for most people it's it's the one that

00:57:18   their cable provider gives them. Yeah well. Which are still crap but they're

00:57:22   less crappy than they used to be and you know if you don't think too

00:57:26   much about it it seems like it's it's sufficient. Well but I think the

00:57:31   main reason Apple I wish Apple were still doing it is security and privacy

00:57:36   That I still, I trust Apple more, and I certainly trust them more than the shit boxes you get

00:57:41   from cable companies.

00:57:48   If you look, there's tons of, if you just start searching for security problems with

00:57:54   like consumer grade wifi routers, they're all over the place.

00:57:59   It's really, really common.

00:58:03   And I just think that with the renewed focus, or not renewed, but just the way that the

00:58:10   whole industry has gotten focused on security and privacy and encryption, et cetera, over

00:58:16   the last 10 years, I feel like, you know, not that I, you know, that it would take a

00:58:23   renewed, what I'm talking about would take Apple to actually be interested and actively,

00:58:28   you know, making airport radically new

00:58:33   and better than ever before.

00:58:34   But I think they had a role to play there

00:58:38   and they sort of abdicated it.

00:58:39   - Maybe, I mean, but I mean, honestly,

00:58:43   what is your, if your ISP is problematic

00:58:48   and tamping with your communications,

00:58:50   that like they can do that just as easily,

00:58:53   you know, internally as opposed to using your modem.

00:58:56   I mean, I'm not sure, or your router, I should say, I'm not sure how much of a difference

00:58:59   that would make, and I guess I don't find that super compelling.

00:59:02   What I do find compelling, and was, did you see that piece by M.G.

00:59:06   Siegler?

00:59:07   I think he called it "Airports" or something like that.

00:59:10   But his argument is that Apple should have moved to integrate sort of the router and

00:59:17   air capability with the Apple TV and with sort of the HomePod or with a Siri sort of

00:59:23   center in the house.

00:59:25   And I think that's where this is much more compelling, and I think is a very strong argument

00:59:31   to make.

00:59:32   I mean, you can understand why Apple wanted to get out of it, not just because solutions

00:59:36   were good enough, but it actually does make it slightly more challenging to set it up

00:59:40   initially because when the technician comes in and installs your internet, they have the

00:59:45   expectation because 95% of their customers just use whatever they give them, that they

00:59:48   set it up and it's good to go.

00:59:50   And if you want to add on a router, often you have to do like PPPoE or you have to do

00:59:53   some sort of like configuration or if you set it up as a bridge mode. There are challenges.

00:59:58   I think Apple might have been getting more. I bet part of the calculation was the amount of

01:00:03   customer support they were having to do with people just trying to get these things set up

01:00:06   with sort of like a Wi-Fi network that was already being set up for them. And that probably went into

01:00:12   it. But the payoff of overcoming that complexity is you have a very sort of privileged position.

01:00:19   It's like the laser writer being compelling because of that networking built in, right?

01:00:23   Because HP actually came out with a laser printer first, but it didn't have networking.

01:00:27   And the networking is what made the laser writer so incredible, as you just kind of

01:00:33   just explained.

01:00:34   And to have the same sort of thing when it comes to home automation, when it comes to

01:00:39   TV, when it comes to music and streaming and all that sort of stuff, I think would be a

01:00:45   very compelling place to be going forward.

01:00:48   And so my take, I think, would be much more along the one that MG had, where they just

01:00:52   kind of just kind of gave up on on on a great place to be and accepted being

01:00:57   just another device in the network instead of sort of the device yeah and I

01:01:02   completely agree I'm glad you brought I just added are you added mg's thing to

01:01:07   the show notes so it'll be there I completely agree and you know a good

01:01:10   example of that where they started going down that path was with a time capsule

01:01:14   where it was more than just a router it was also a destination where your max

01:01:18   all your Macs in your house could could use for Time Machine because Time Machine is a great feature

01:01:25   but it needs it can't use you know for good reason it can't use your startup drive as the place where

01:01:35   it stores your backup information because that's what it's backing up and I don't know if you're

01:01:44   aware of this, an awful lot of people have Macbooks. They don't use desktop Macs. And

01:01:51   so it's not really all that convenient to have a USB drive plugged into the side everywhere

01:02:00   you go at all times so that Time Machine can run.

01:02:03   So having Time Machine be able to back up to a network device like Time Capsule is a

01:02:10   a brilliant device for most Mac users because most Mac users are on MacBooks. And even the

01:02:15   ones who aren't, you know, having one device that everybody in the house can back up to

01:02:21   is better than buying a USB drive for everybody. So that's just, you know, now what are you

01:02:28   supposed to do for Time Capsule if you're one of these people? And then Time Capsule's

01:02:32   a great feature.

01:02:33   Well, the other thing is, you know, the trend in general has been towards these sort of

01:02:37   networks. You mentioned you have a Euro. I have one of those hardcore sort of ubiquity

01:02:43   systems, like Marco has. But what's so interesting is if Apple had been more sort of forward

01:02:51   thinking about this, they could have used a mesh network and integrated that with a

01:02:57   Siri type device, like the Amazon Echo Dots, the small ones. And imagine if those were

01:03:03   were both like a part of a Wi-Fi mesh network

01:03:07   and also were sort of embedding Siri throughout the house.

01:03:10   I mean, this idea of like, there was a real opportunity

01:03:13   for sort of integrating all these sorts

01:03:15   of different services, which is sort of

01:03:16   Apple's bread and butter, and there was just,

01:03:19   I think it really was just a lack of vision.

01:03:21   I mean, I've written about the thing with,

01:03:23   you know, about the HomePod in Siri

01:03:24   or the HomePod in general.

01:03:26   I mean, remember the Echo came out,

01:03:29   I think it was in 2014, and I'm very proud of it

01:03:32   because it came out on the heels of the Fire Phone,

01:03:35   which was just truly, it's honestly the worst phone

01:03:38   I've ever used in my life.

01:03:39   It was truly horrendous.

01:03:41   And so they come out with this Echo device,

01:03:43   and everyone's like, "Oh, Amazon, what are they doing?

01:03:47   "They're terrible, horrible, blah blah blah."

01:03:48   What people didn't realize is the Echo

01:03:49   was not a hardware device.

01:03:50   It was a conduit to an online service,

01:03:53   which Amazon is much better at than they are,

01:03:56   sort of like a product that you hold in your hand.

01:03:58   But, and I was very, 'cause I was the only person I knew

01:04:01   first day, I was like, "I think this is pretty compelling. It's going to be a big thing."

01:04:04   And I think the problem for Apple and Google both was they were so dominant in smartphones

01:04:10   that they couldn't imagine a world where the smartphone wasn't the most sort of important,

01:04:15   dominant device because why wouldn't it be? It's amazing. It's awesome. It's always with you.

01:04:19   And it turns out, I've probably seen this in your show before because I've made this point

01:04:22   previously, but the one place where you're most likely to not have your phone happens to be when

01:04:28   when you're at home because you're charging it, right?

01:04:31   And, but Apple and Google, I think,

01:04:33   were just so blind to it that Amazon got this

01:04:36   multi-year head start building this stuff out.

01:04:39   And if you think about the timing,

01:04:40   Apple stopped development in two,

01:04:41   like when the current, the last version of the airport

01:04:45   came out, it had to have been around 2014 or so,

01:04:47   sometime around that, I'm just guessing.

01:04:50   But, you know, if they had sort of not had this blind spot,

01:04:53   you know, you could imagine a world where they have

01:04:55   all these eero-like devices distributed through your house

01:04:57   have Siri all enabled, and it's just sort of embedded in your house, and then it's combined

01:05:03   with Apple TV and has this whole sort of like ... Where the iPhone, you're less dependent on

01:05:10   this device in your pocket, and you're more sort of living in this sort of Apple-controlled universe.

01:05:15   But they didn't. They had that blind spot, and now they're basically, in many respects,

01:05:21   when it comes to the home, back where they started. Yeah. And think about how long ago

01:05:25   that was. They had original, you know, they started shipping machines for the Wi-Fi in

01:05:31   1999. So, you know, we're talking like 18 years. I think that's when their first airport

01:05:35   came out, right?

01:05:37   - I am looking it up right now.

01:05:39   - It's close. It's gotta be close to around 18 years. Like, that's 18 years.

01:05:43   - Yeah, they watched it in 1999, and then the last version came out in, well, 2011.

01:05:50   Sheesh.

01:05:51   - It is, I think ultimately it's just,

01:05:53   that's a, and it is sort of what I'm thinking.

01:05:56   It's not just security and privacy,

01:05:57   but it's just all of, there's just a lost opportunity,

01:06:01   you know, to have 18 years of it,

01:06:04   and that it really only got better in that 18 years

01:06:07   by adopting, you know, ever faster Wi-Fi standards,

01:06:11   and time capsule.

01:06:14   Time capsule's the only thing they ever did

01:06:16   along the lines of, hey, if we've already got a device

01:06:19   plugged in and networked and connected to the internet by definition, right?

01:06:25   That that's the fundamental role that this thing plays.

01:06:29   And before mesh networks, they had the Airport Express, which was--

01:06:34   Right, which has kind of accomplished sort of the same thing.

01:06:38   Because their app-- if you actually want to have multiple Wi-Fi devices in a house

01:06:43   and you didn't know what you were doing, the only feasible way to do it

01:06:47   was with multiple Apple Airport Expresses.

01:06:50   Because at least Apple had the app

01:06:52   that made it somewhat approachable

01:06:54   for a sort of regular person to set up.

01:06:56   - And I guess, I shouldn't say that Time Capsule

01:06:58   is the only time they extended it,

01:06:59   'cause the Airport Express is a good example too,

01:07:02   where they had audio out from it

01:07:03   and you could use that to connect

01:07:07   like a non-networked audio, like your stereo system

01:07:10   to make it a destination for playing music from your Mac.

01:07:14   - Yeah, it was awesome.

01:07:16   It was awesome.

01:07:17   I mean, speaking of Paul Kefasis,

01:07:20   I mean, like "Rogue Amoeba" made some amazing things

01:07:23   that took advantage of that in terms of audio.

01:07:26   But that's another, you know, so like in the early years,

01:07:30   they were thinking of, hey, you know,

01:07:32   we've got these things, what else could we do with it?

01:07:35   And it's like, you know,

01:07:36   I'm sure that the way "Airport Express" came about

01:07:39   was they were thinking, well, look, one base station,

01:07:41   there's God, there's just no way in certain houses

01:07:44   that we can make a signal strong enough to fill the whole house with Wi-Fi.

01:07:47   What could we do?

01:07:48   And they thought, "Well, what if we sold...

01:07:50   All right, we still sell a main base station, but we sell a cheaper, smaller thing that

01:07:53   you could put another one upstairs, and it'll set up a secondary network that the same devices

01:07:58   will automatically connect to."

01:08:03   It's not a mesh network, but still sort of solving the same problem.

01:08:06   And mesh networks is like years later a better idea of do it.

01:08:10   But if they had kept pressing forward, they should have gotten to mesh networks first.

01:08:14   And they could have kept thinking of more and more ideas.

01:08:19   Because ultimately, the difference is, in the early years, in the 2000s, they couldn't

01:08:25   make, you know, these devices were more like traditional consumer electronic devices.

01:08:30   Whereas all the stuff they've been doing in the last five, six years are making little

01:08:35   devices that are actually iOS computers, right?

01:08:39   AirPods are literally tiny little iOS computers running a system on a chip inside your ear.

01:08:50   Apple TV is an iOS computer.

01:08:56   I'm sure I'm missing a couple.

01:08:57   Almost everything they make now.

01:08:59   HomePod is an iOS computer.

01:09:03   What else could they do if they could make the router into a little iOS computer?

01:09:07   Well obviously, like you said, the Amazon Echo and Echo Dots and stuff like that show

01:09:13   you the direction you could go.

01:09:16   It just, I don't know, it just seems like a missed opportunity.

01:09:20   And I think you're very, very astute that they got blinded by the fact that the phone

01:09:28   is your everywhere computer.

01:09:31   I

01:09:33   Sorry if you heard of acne in the background I just stepped away

01:09:36   to stop that but I

01:09:39   Sorry, I missed your last like well. I just said I just said that I think you're exactly right

01:09:44   The last I heard was you were talking about everything was an iOS computer and you well

01:09:47   I was just listing some examples of it and everything you know that everything

01:09:50   But I think you're ultimately you know that they should have been thinking of that and if they had been on top of it

01:09:56   You know once they started making everything into iOS computers

01:09:59   Boy, something like making echoes and echo dots type devices would have been obvious

01:10:06   if they hadn't been like, I think, and I think you're spot on, blinded by the fact that they

01:10:09   saw the iPhone as the computer that you would have everywhere.

01:10:14   Yeah, it's a perfect example that you see in company after company after company after

01:10:20   company where it's impossible to not get blinded by your success.

01:10:28   You see this again and again, like Microsoft could not imagine a world that did not have

01:10:32   the PC at the center, right?

01:10:35   And it's the same sort of thing.

01:10:36   And they could have still created a world where the iPhone was the most dominant piece

01:10:42   in the center.

01:10:43   What's interesting is Steve Jobs, if you remember, his last keynote was about iCloud being the

01:10:47   new center of your life.

01:10:49   But the reality is that never actually happened.

01:10:52   The truth is the iPhone has become ever more the sort of, for practical purposes, the center

01:10:58   of your life.

01:10:59   And it's the center of your life in terms of the way Apple thinks about their business,

01:11:03   where they're going to get you to buy a morphos of iPhone.

01:11:06   They're going to get you to do more things on the iPhone or on morphos services.

01:11:09   They're going to sell you AirPods.

01:11:10   They're going to sell you a watch, all of which sync with the iPhone.

01:11:14   And, on one hand, I fault them because they got this wrong.

01:11:19   On the other hand, it's sort of like, well, that's the way it works.

01:11:23   Even Apple, as well-run as they have traditionally been, are not immune to the mistakes that

01:11:29   befall every single successful company.

01:11:31   So I think this is an example of that.

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01:14:59   - I'm here. I am here. I successfully took the dog to the restroom. Maybe you were reading

01:15:04   the ad.

01:15:05   - You're multitasking.

01:15:08   I am multitasking.

01:15:10   Apple's quarterly results.

01:15:11   I don't know if I want to spend a lot of time on this,

01:15:14   but we have to talk about this Samsung OLED thing.

01:15:20   There is a lot of pessimism about Apple's iPhone 10

01:15:22   results, or iPhone 10 sales.

01:15:25   And I think it's a couple of factors.

01:15:28   I think one of them is that-- I think

01:15:30   it's every year in this quarter.

01:15:32   Because the holiday quarter, the one that ends in December,

01:15:36   is all about the new phones.

01:15:38   And the new phones are so much excitement, blah, blah, blah.

01:15:40   And then the March quarter, January, February, March,

01:15:43   I think on an annual basis, there's just,

01:15:46   you can just set your clock to it.

01:15:48   Next year, starting around January, February,

01:15:51   there's gonna be reports that the new iPhones

01:15:53   from September 2019, especially the flashiest ones,

01:15:58   are a disappointment, sales are down.

01:16:01   Suppliers of certain things are saying that Apple has slashed

01:16:07   their estimated orders.

01:16:09   - No, there's a good reason for that though.

01:16:11   That was because two years ago, the second quarter of 2016,

01:16:15   is where the bottom fell out of the iPhone 6S.

01:16:18   And in a real meaningful way.

01:16:21   Not only were sales down 16% year over year,

01:16:25   which was the first time iPhone sales

01:16:27   I think had been down ever year over year,

01:16:29   but also it was actually far worse than it appeared

01:16:32   because Apple built up a huge amount of inventory

01:16:35   to the point they had to take down a $2 billion

01:16:37   write down later that year.

01:16:38   So like quarter two 2016 was a complete disaster for Apple,

01:16:43   for its suppliers, for its--

01:16:46   for anyone who held the stock at that time.

01:16:49   So I think it's only been one year or two years since then.

01:16:53   So I think there was more going on than just--

01:16:56   like there's a reason for this quarter

01:16:58   to be a little nerve-wracking.

01:17:01   Again, and the other thing was in the last quarter,

01:17:03   there was some inventory questions again, which gave some hints that is there going

01:17:09   to be a similar sort of thing to 2016.

01:17:11   So I think it's a little more justified than sort of just a usual Apple's Doom sort of

01:17:18   narrative sort of thing.

01:17:20   All right, fair enough.

01:17:25   And even I published a piece a week or so ago saying maybe there is something to this

01:17:32   linking to a Bloomberg report on Samsung's result where Samsung said, "Hey, we're seeing

01:17:38   significantly less business in our flexible OLED displays than we expected."

01:17:46   And that's-

01:17:47   Is this where I throw myself on the story?

01:17:50   Well, it was-

01:17:51   It was pro-

01:17:52   No, I won't do it.

01:17:54   I won't do it.

01:17:55   It was pro-do-it.

01:17:56   It was-

01:17:57   You had posted a post saying that someone was a jackass, saying that iPhone X sales

01:17:59   were down.

01:18:00   Right.

01:18:01   I think little worried about that phone X and then and then a few hours later that article dropped and I

01:18:06   Forged I'm the one that forage you that article and said yes look at here

01:18:11   And then you posted and then and then I woke up the day after earnings and I sent you

01:18:14   There's this story

01:18:17   I did it's not like well you sent me the link and you send me a link and then I go posted to during fireball

01:18:22   You but you sent me the link and you had said I don't know

01:18:24   I think there's something to it and I trust your opinion

01:18:25   I had seen this story before and I just didn't link to it

01:18:29   I was like, "Eh."

01:18:30   And you made me look at it again and I read it and I thought, "Hmm."

01:18:34   And my regret isn't that I linked to it.

01:18:37   My regret is that it's the exact language I used.

01:18:42   And I'm not going to go back and edit it because I think it's disingenuous.

01:18:47   But I'll tell you what I wish I had written.

01:18:50   What I wrote was, let's see here, under the headline, "Samsung Sees Slow Demand for OLEDs

01:18:58   used for Apple's iPhone X. Well, I regret that headline. I should have just said they

01:19:03   see slow demand for flexible OLEDs. Because that used for Apple's iPhone X makes it sound

01:19:10   like they're only used for the iPhone X and they're not, even though they're very expensive

01:19:13   displays and therefore aren't used for most phones. But my first sentence after quoting

01:19:18   from the Bloomberg article was starting to sound like iPhone X sales really are falling

01:19:25   short of expectations.

01:19:27   And I wish instead of the verb "are," I had said "might be," because that's really what

01:19:32   I was thinking, and I think it would have held up better a week later.

01:19:37   So here's the thing, though.

01:19:39   So here's the thing.

01:19:40   I mean, so one, I think it's a little more complicated, though, than Bloomberg got it

01:19:46   wrong and everyone else got it right.

01:19:48   Because I actually, the truth is actually, I think, in the middle.

01:19:52   Because I think what happened was Bloomberg really ran with this, like, "It's going to

01:19:57   be a big problem, blah, blah, blah."

01:19:59   And then you had all the spillover articles saying, "It's going to be terrible, it's going

01:20:02   to be awful, blah, blah."

01:20:03   And then it comes out and it's fine, it's the best selling phone every week.

01:20:06   And everyone's like, "Ah, you were wrong."

01:20:08   But that also is not totally right either.

01:20:13   There was a drop off.

01:20:15   Last year, the average selling price, it always drops after the first quarter, because the

01:20:20   first quarter is when all the enthusiasts buy the phone.

01:20:22   They always buy the best possible phone they can.

01:20:24   And last year, the drop off was 6%.

01:20:27   And that was pretty normal.

01:20:28   The year before it was 7%.

01:20:29   The year before it was 4%.

01:20:30   So that's kind of a, it's normal

01:20:32   for average selling price to go down.

01:20:34   This last quarter went down 9%,

01:20:36   which means there was for sure,

01:20:39   there was for sure a more of a drop off

01:20:42   from the high end than there has been in previous quarters.

01:20:45   Now, was it a disaster?

01:20:46   Of course not.

01:20:47   It wasn't even close to being a disaster.

01:20:48   But it was, you know, and there's this quote

01:20:51   that Cook had where he's like, yeah, maybe you'd like to win the Super Bowl by more points,

01:20:56   but you still won the Super Bowl. It's a great phone. That sure sounds like Tim Cook saying,

01:21:00   well, we thought we could have done more, but we still did pretty good, which means

01:21:05   your quote was right. It was short of expectations, but it was not a disaster.

01:21:09   No, I don't know about expectations. I think maybe short of hopes, right? Like realistic

01:21:14   hopes. You know what I mean? I think it was exactly within expectations. And the other

01:21:19   And I think you're right that the drop off quarter to quarter, in other words going from

01:21:24   the first two months, because it wasn't on sale for the whole quarter in the holiday

01:21:31   quarter, right?

01:21:32   The iPhone X was-

01:21:33   Right, but all we could look at is the whole quarter though.

01:21:36   That's the most information.

01:21:37   But I actually think that's kind of interesting because it was only available for two months

01:21:41   in that quarter.

01:21:42   And it's so clear that so many of the people who wanted to get an iPhone X right away bought

01:21:47   it right away, that even though it was only available for two months in that quarter,

01:21:51   it still was a bigger drop off quarter to quarter from the December quarter to the March

01:21:59   quarter than, like you said, the last two or three years.

01:22:03   It was still a bigger drop off.

01:22:04   - It's really weird because the other thing that's weird is they were in supply demand

01:22:08   balance or something or close to it by the end of the quarter.

01:22:12   And that was also, that was the other big warning sign for the iPhone X, is usually

01:22:15   when Apple launches a new phone, the most successful ones,

01:22:18   by the end of the quarter, there's still not

01:22:19   what they call supply-demand balance,

01:22:21   where they're selling more than they can make.

01:22:24   And the problem was the iPhone X,

01:22:26   within literally like five weeks, was already in balance.

01:22:29   So there was a lot, so even last quarter,

01:22:31   and I think I wrote this after last quarter,

01:22:33   I was very worried about this current quarter,

01:22:36   because wow, if they're already in supply-demand balance,

01:22:39   like how much more demand is there for the device?

01:22:43   So I will say from my perspective,

01:22:45   it did better than I expected because I was worried about that specific point from last

01:22:49   quarter.

01:22:51   But that said, you can't say it was ... There was a drop off.

01:22:59   It was so oversold and overhyped by, I think, Bloomberg in particular.

01:23:04   But it's had a profound effect on the average selling price of iPhones because even with

01:23:10   that drop off from the last quarter, if you look at the year over year, January, February,

01:23:15   March of last year, in January, February, March this year, the average selling price

01:23:19   went to, I don't have notes, I'm doing this from my memory yesterday, but I think it went

01:23:23   from 659 average selling price to 729, or something.

01:23:29   That is pretty good, it went from 656 to 729.

01:23:32   All right.

01:23:33   So an 11% increase, which is huge.

01:23:37   Last year, the year over year increase was 2%.

01:23:40   For a 10 year old product.

01:23:41   ten-year-old product to all of a sudden have an average selling price increase

01:23:46   you know in an industry where as is you know three or four years ago everybody

01:23:52   thought that the average selling price for everything iPhone included was going

01:23:55   to sink you know that it was going to and who knows that still may happen

01:23:59   eventually I mean I'd you know in a long enough run it's probably going to happen

01:24:04   you know but you know the way that the PCs Oh PCs constantly got cheaper like

01:24:10   The average selling price of PCs didn't go up 10 years

01:24:14   into the PC revolution.

01:24:17   PCs used to cost $6,000, $7,000.

01:24:20   And now they cost $200.

01:24:24   No, you're hitting the exact right point.

01:24:27   It's so easy it's stuck in the weeds of where is it,

01:24:29   relatively speaking.

01:24:31   If you just step back for a moment,

01:24:33   the iPhone X is an unbelievable triumph,

01:24:35   from a financial and business perspective.

01:24:38   We are 10 years into smartphones, 11 years into smartphones.

01:24:41   And Apple, I kind of wrote about this week,

01:24:44   like when I first started to tech, it was 2013,

01:24:46   I got a, wrote about the iPhone 5C so much.

01:24:50   'Cause it was such, it was this huge deal.

01:24:51   Apple has to release its cheaper phone,

01:24:52   has to release its cheaper iPhone.

01:24:53   Here we are five years later,

01:24:55   and Apple has jacked up the price of the highest end iPhone

01:24:58   by what, 33%, and they're selling gobs of them.

01:25:03   And yes, we can quibble about the relative amount

01:25:06   of those gobs, but the fact remains that they are absolutely defying gravity in a way that

01:25:12   if you didn't really think about how Apple works and why they could accomplish that,

01:25:15   would seem totally preposterous.

01:25:17   Yeah.

01:25:18   Yeah.

01:25:19   I noted that in your daily update today, that that was a great callback to the 5C, which

01:25:24   was just a couple of years ago.

01:25:26   But yes, the 5C was seen as a big WTF by the industry because the rumors had linked that

01:25:33   they're making a phone it'll be plastic instead of metal and everybody quote

01:25:38   unquote everybody assumed that Apple had to make a quote cheap iPhone so

01:25:44   obviously the plastic one would be the cheap one and so it's gonna have some

01:25:47   kind of you know the most exciting thing about it is gonna be this exciting low

01:25:50   price point and it came out at exactly you point out exactly the price that it

01:25:56   they would have had if they had just kept the original iPhone 5 around for

01:26:02   another year. Which little birdies say was really hard to manufacture and very high return

01:26:07   rates, and there was a very good reason to retire it.

01:26:09   And had an anodization problems that customers weren't happy with. The black, if you recall,

01:26:17   the iPhone 5 had a black variant, and those chamfered edges and the iPhone 5s went to

01:26:26   space gray, I think, and it was a much lighter dark, darkening to the aluminum.

01:26:33   Wasn't really that dark at all.

01:26:34   No, it was, yeah, it was true.

01:26:36   No, in the five, I believe I had a black one.

01:26:40   Yeah, it was amazing when you bought it and looked like absolute garbage with it.

01:26:43   But I kind of like that.

01:26:44   You would get that chipping and stuff on it.

01:26:46   I like it.

01:26:47   I agree, I agree.

01:26:48   I don't placate, like, I like the sort of like beaten, weathered look, so I don't mind

01:26:52   it.

01:26:53   But I know that some people don't, though.

01:26:56   with their $700 iPhones that they're hoping to resell eventually.

01:27:00   So yes, there were problems with it.

01:27:02   But anyway, it's such a good, from there to here difference, where everybody expected

01:27:11   Apple to make a cheap phone and they didn't and they thought it was a mistake.

01:27:15   And now they've made a more expensive phone than ever.

01:27:20   And it's, you know, it's maybe not the biggest hit it possibly could have been, but it's

01:27:25   clearly selling well enough that it has significantly altered the average selling price of an iPhone.

01:27:31   Right.

01:27:32   And I mean, Apple, to be fair, Apple did raise the price of the iPhone 8 and 8 Plus.

01:27:37   Compared to the 7 and 7 Plus when they were brand new a year ago.

01:27:41   Right, exactly.

01:27:44   But that kind of makes the point even further, right?

01:27:47   They're also raising their second-tier phone prices, and it doesn't really matter.

01:27:51   The other thing is, yes, unit sales have flattened, and people are right to point that out, but

01:27:58   I think there's a difference.

01:28:00   This is something that people just have ... There's a difference between saying Apple has saturated

01:28:05   ... This is why the phone market's so great.

01:28:07   I think it's fair to say Apple has largely saturated the high-end phone market, and to

01:28:11   the extent they pick up new users.

01:28:13   They have always picked up switchers because people are far ... Apple customers almost

01:28:18   always buy ... iPhone customers almost always buy new iPhones, whereas the average Android

01:28:23   purchaser, their likelihood of buying the same phone is significantly lower.

01:28:26   So if you just work out the math, by definition, Apple's going to be picking up switchers over

01:28:29   time.

01:28:30   But that's counterbalanced by the fact people do hold onto their phones longer than they

01:28:34   used to.

01:28:35   But at the end of the day, phones wear out.

01:28:38   They break, they get old, they're personal accessories that people carry with them.

01:28:42   They want to have the hot new thing.

01:28:44   And so that makes us a great market to be in because sure, there may be a limit to how

01:28:48   large Apple can grow as far as their base, and they may be close to it, but they're not

01:28:54   losing anyone.

01:28:55   And this is the ... When I first started to techery and very much into things like disruption

01:29:01   and sort of business theory and stuff like that, and I was so sure that there was something

01:29:07   wrong there because you remember there was all the predictions.

01:29:10   Apple is gonna be disrupted and the low-price competitors

01:29:12   are gonna come along.

01:29:13   And that was one of the reasons I wanted to start

01:29:15   to checkery is, obviously you and other folks

01:29:18   were writing that this makes no sense,

01:29:19   but for me, coming from the sort of business theoretical

01:29:22   perspective, I wanted to put sort of like the theory around

01:29:25   why it doesn't make sense.

01:29:26   And a big thing there was all these analysis,

01:29:31   we're all taking examples from the enterprise market, right?

01:29:34   Where yes, you come in and you buy, you sell something

01:29:37   cheaper that has the same features,

01:29:39   and you can convince the CIO to buy it,

01:29:40   and he doesn't care how it works.

01:29:42   Someone else has to actually deal with it.

01:29:44   But the consumer market's totally different.

01:29:45   People like nice things.

01:29:47   And it's so bizarre because you look at

01:29:49   basically every other category of products people buy,

01:29:52   and there are successful products at the high end.

01:29:55   It's not like luxury bags get disrupted,

01:29:58   or nice clothes get disrupted, or nice shoes get disrupted.

01:30:01   No, they continue to sell and will always sell

01:30:04   because people like nice things.

01:30:05   And why that shouldn't apply to your phone

01:30:08   doesn't make any sense.

01:30:09   - Right, and isn't one of,

01:30:10   Clayton Christensen, am I right?

01:30:14   - Clayton Christensen.

01:30:15   - One of his examples from his theory

01:30:16   is like steel suppliers and how like the big,

01:30:21   you know, like US Steel got like undercut by like,

01:30:24   you know, micro--

01:30:26   - Yeah, mini mills, yeah.

01:30:27   - Great example and it's, you know,

01:30:30   and I think he's, I think his, you know,

01:30:32   I've read it and it's like I'm nodding my head

01:30:35   and it's, you know, a little bit outside my wheelhouse

01:30:37   but I'm like, this makes a lot of sense, I agree with this.

01:30:40   But the way that a manufacturer who buys raw steel

01:30:44   evaluates who they're gonna buy the raw steel from

01:30:47   is very different than the way that individual people

01:30:50   buy their personal, the things they use

01:30:54   in their personal life.

01:30:55   - I made a list somewhere of all the industries

01:31:00   that Christensen uses as examples,

01:31:02   and they were all like airlines

01:31:03   and like all these sorts of things.

01:31:04   Like they were all business to business,

01:31:07   businesses where there was a buyer buying a product for a fleet of people or whatever,

01:31:13   and they were not the user of the product.

01:31:16   They weren't going to care about the consumer user experience.

01:31:20   And the other thing I know at the time, there were actually lots of other examples of products

01:31:24   where people did care, where the buyer was the user.

01:31:27   Things like game consoles, things like clothes and accessories, I just talked about a moment

01:31:31   ago.

01:31:32   Things like cars.

01:31:33   cars as an analogy for why Apple would succeed, and it's a totally legitimate analogy, right?

01:31:38   Because people buy nice cars.

01:31:40   Does everyone buy nice cars?

01:31:42   Can BMW take over the entire market selling high priced cars?

01:31:45   No, they can't, but can they sell ... Are they going to be disrupted because Chevy comes

01:31:51   out with something cheap?

01:31:52   No, they're not.

01:31:53   The second most successful retailer, I don't know if it's worldwide, but certainly in the

01:31:57   United States, year after year, and they've been around for a while by square footage.

01:32:05   Second dollars of profit by square footage of retail space is Tiffany & Company.

01:32:11   And you can go in there and if you've ever bought a diamond and you get the color and

01:32:16   the clarity and the cut and the grade and the certified, and you can buy a cheaper diamond

01:32:23   Ring probably at any, almost any other store. And Tiffany is the second most profitable

01:32:33   retailer in the world by square foot. Yeah, and not just that, but even there, you

01:32:39   can buy the same quality jewelry for much cheaper somewhere else. So it's not just a

01:32:44   matter of it being jewelry. You're paying more for the Tiffany brand, but that's how

01:32:48   brands work. But I mean, that's- But you also get, it's more than just the brand note. You

01:32:52   You also get, and I can vouch for this firsthand, you get some of the best customer experience

01:32:59   you'll get anywhere in the world in terms-

01:33:01   Oh, absolutely.

01:33:04   And people thinking about this in such black and white terms and putting it on a spreadsheet,

01:33:09   that stuff matters.

01:33:10   I mean, one thing I learned when I started flying a lot, for example, and I remember

01:33:14   when I first got United 1K here.

01:33:17   And yeah, it's great.

01:33:19   I really wanted to get it because I get all the upgrades.

01:33:22   You get like six international upgrades or something like that, which is a huge deal.

01:33:25   But I realized actually the upgrades aren't that big of a deal.

01:33:28   It's the fact that I can pick up a phone and dial a number and a human picks up immediately.

01:33:32   And like I remember I was in Korea one time and something happened with my flight and

01:33:35   I just dialed the number, pick it up, and boom, it was all fixed for me in like 10 minutes.

01:33:39   And like that is worth so much.

01:33:41   At the time my whole family was with me.

01:33:43   And that was worth 100 upgrades, right?

01:33:46   That's what actually matters when it comes to these sorts of experiences.

01:33:50   Yeah, oh, I found though I found the list by the way the original article the original disruption article looked at disk drives

01:33:57   PC's mortgage banking micro processors and software and I think it's in also like air

01:34:03   Visual aircraft medical devices things like that. I think it's interesting that PCs is in there because I think

01:34:09   Have we talked about this on this podcast? I certainly talked about on mine that the

01:34:14   So much bad analysis and technology comes from people that don't actually understand what happened in the PC industry in the 80s

01:34:21   Like people have this vision of Apple being this sort of dominant force than Microsoft coming along and disrupting them by being open and closed

01:34:28   And it's just utter it could not be more wrong like Microsoft the IBM PC came out first in

01:34:36   1981 and did have a Windows GUI. No it had you know it had a

01:34:40   text-based operating system

01:34:42   But the point of Windows coming along

01:34:45   was Windows was backwards compatible with DOS.

01:34:48   And so DOS built up a huge user base,

01:34:50   built up a huge amount of software,

01:34:51   built up developers, the entire ecosystem

01:34:53   before the Mac even launched.

01:34:55   Like the Mac never had a chance relative to IBM PCs

01:35:00   and it turned out that adding a Windows GUI,

01:35:02   it was a feature.

01:35:04   Like obviously it was a feature that changed the world,

01:35:07   but it was still a feature.

01:35:08   It didn't change the way the business model worked.

01:35:10   and to say that Apple lost because they were closed

01:35:14   and Microsoft is open is to utterly and completely

01:35:16   miss the point and it's so damaging,

01:35:18   not just because it misses the point,

01:35:20   but also the only reason Apple succeeded

01:35:23   was because they were closed.

01:35:25   When Apple actually opened up in the 90s,

01:35:28   it almost killed the company.

01:35:30   Being closed made them a viable company

01:35:32   in the midst of sort of the Microsoft dominance.

01:35:35   >> I think you would agree with this.

01:35:36   I've written, this is a topic we've both written about

01:35:39   I love it, but and it's so doesn't matter how much we write we could write about it every day for the rest of world

01:35:45   And it's not gonna change the perception of everybody who there's no way you're gonna shake people off that open and closed argument

01:35:50   But the one thing that I believe firmly was that and and me personally I was I've all I to this day

01:35:58   I'm repulsed by Windows, but especially in that in like the late 80s and there throughout the whole 90s

01:36:04   I thought Windows 95 was garbage

01:36:06   I agreed it looked better than Windows 3.1, but I still didn't think it looked good.

01:36:11   And just the way that it was built off DOS and you still had like a stupid C drive and

01:36:17   all the ridiculous file name restrictions, blah, blah.

01:36:20   I mean, the thousand, thousand things that were ungodly because of the way that it was

01:36:25   built off DOS.

01:36:26   But I also firmly believe that business-wise, if Windows, like to make Windows actually

01:36:32   be good, it couldn't have been built on top of DOS.

01:36:36   would have needed to have been an all new operating system.

01:36:39   And if they had done that and done a graceful job and made something like, let's say, that

01:36:44   was at least as elegant and self-contained as the Macintosh, I don't think it would have

01:36:49   … I think it would have failed.

01:36:51   Because it was the fact that Windows built on top of DOS that made it palatable to the

01:37:02   people in IT.

01:37:03   Because I remember the time that the mentality of the people who I knew who were PC

01:37:08   enthusiasts and would it be the type of people who would be making these decisions at a business or a company is

01:37:13   They might think well, this is great because you know these people who are confused by DOS

01:37:19   They can run windows and they can get this gooey thing

01:37:22   But I'm not you know

01:37:23   Their machines still booted into DOS and they only ran windows when they typed win at the command prompt

01:37:29   You know they didn't have their machine set up to boot into windows their machines booted into DOS

01:37:33   because they were quote-unquote real computer users and

01:37:37   If they would have had to buy a different machine and

01:37:41   Run an incompatible operating system to get the GUI they would they wouldn't have bought into it

01:37:46   It was the whole reason they they scoffed at the Mac

01:37:48   Yeah with your you one you're completely right to the other thing is you know

01:37:55   There was lots of software written for DOS and it needed to be able to run and and I would go further than you

01:38:01   it's not just that it would have failed because

01:38:03   because, but it would have failed because Microsoft was fundamentally unsuited to write

01:38:09   a graceful, beautiful computer that was easy to use.

01:38:13   That's not at all a criticism.

01:38:16   The foundation of Microsoft is responding and hustling to give consumers exactly what

01:38:21   they want.

01:38:22   Bill Gates and Paul Allen started a company in New Mexico because they wanted, basically

01:38:27   someone wanted to write a basic compiler and they said, "Oh, we got one.

01:38:30   We'll write it."

01:38:31   and they said, "Okay, you give it to us,"

01:38:33   and they hadn't written it yet.

01:38:34   They had to go and write it.

01:38:36   And same thing with IBM.

01:38:38   Microsoft won the IBM contract for an operating system

01:38:40   without having an operating system.

01:38:42   They actually bought DOS from a company called

01:38:44   Seattle Computer Company or something like that,

01:38:46   renamed it to MS-DOS, and then gave it to IBM.

01:38:50   And again, it's easy to sit here from a product perspective

01:38:53   and an Apple perspective and criticize that and mock it.

01:38:56   You know what, there are all kinds of ways

01:38:58   to build companies, and Microsoft from the beginning

01:39:00   has given customers exactly what they want,

01:39:02   for better or worse.

01:39:03   And they have made a whole lot of money doing it

01:39:06   and enabled a whole lot of things.

01:39:07   And implied in that is, you know,

01:39:10   you're gonna layer a GUI on top of a operating system

01:39:13   that you bought from someone else

01:39:14   and is a mishmash and stuff,

01:39:16   and it's gonna be clunky and hard to use.

01:39:18   But you know what?

01:39:19   It got the job done.

01:39:20   And you know, Mike, this is the mistake,

01:39:24   huge mistake they made with the phone.

01:39:25   They just wanted to come and be like,

01:39:26   oh yeah, we're gonna compete with Apple

01:39:28   on the user experience.

01:39:29   No you're not, you have 30 years of papering over,

01:39:33   glommed together crap because it's what the customer wants.

01:39:37   You're not gonna suddenly develop the skills and mentality

01:39:40   to build a beautiful, easy to use operating system, right?

01:39:44   I mean, it blows my mind that Windows Phone

01:39:47   had far worse support for enterprise features

01:39:50   than the iPhone did from the day it launched

01:39:52   until the day it went out of business.

01:39:53   Like, it's like they were crazy, they totally forgot.

01:39:56   And this was Balmer's, one of his biggest mistakes.

01:39:58   I mean, he had a whole bunch of them,

01:39:59   but he completely forgot, he got so wrapped up

01:40:02   in Microsoft being big and powerful,

01:40:04   and completely forgot the nature of the company

01:40:07   and what they were actually good at.

01:40:08   And to the extent that Adala has been successful,

01:40:10   he's been phenomenally successful,

01:40:12   it's been in going back to and embracing that Microsoft,

01:40:16   what they are good at.

01:40:17   And you know what, they go to enterprise customers,

01:40:19   like, we will help you, we'll go to the cloud with you,

01:40:20   we'll have a hybrid environment,

01:40:21   you can run some of your stuff on your on-premise,

01:40:23   or you're running some of your stuff in the cloud,

01:40:25   and it's gonna be a big mess, and it's gonna be messy,

01:40:26   but we'll be messy together.

01:40:27   And they're being extremely successful doing it,

01:40:30   because that's what Microsoft does.

01:40:32   And anyhow, sorry, that was a rant.

01:40:35   But I completely agree with you that if Microsoft

01:40:37   tried to compete with a Mac in a user experience perspective,

01:40:41   they would have failed completely

01:40:42   for all kinds of reasons.

01:40:44   I think that complaining about Microsoft, especially Bill

01:40:47   Gates era of Microsoft not producing elegant Mac

01:40:54   caliber elegance

01:40:56   Intuitive software would be like complaining that you know you just went in the butcher shop and the guy

01:41:02   Here's a guy who's supposed to be a professional and is wearing a smock covered with blood

01:41:06   You know it's like that's not who they are you know

01:41:10   I mean like Microsoft is the butcher who's you know is to get their hands are dirty and their their work clothes are covered with blood

01:41:17   You know and they got the job done right and then them you know trying to make Windows Phone was them like you know after

01:41:24   doing that, that's their expertise, that's who they are.

01:41:26   And then they're like, "I'm gonna be on the cover of GQ."

01:41:28   And it's like, "No, you're not!"

01:41:30   (laughing)

01:41:31   You are not suddenly gonna become a sharp, snappy dresser.

01:41:35   - Right, and that's the thing with Apple.

01:41:37   Apple, the key to Apple coming back

01:41:40   is not Steve Jobs' genius directly.

01:41:44   What was key was the shift in the market

01:41:47   to the consumer market.

01:41:48   Because the thing is, Jobs was always a consumer guy.

01:41:51   So Mac was a consumer product.

01:41:53   The problem is the Mac was a consumer product in a world where only businesses bought computers.

01:41:57   The big difference for the iPhone relative to the Mac is not open versus closed.

01:42:02   It's that by 2007, the consumer market mattered far more than the business market, was far

01:42:08   larger and Apple had always been the right company for that market.

01:42:12   They were just 30 years too early.

01:42:15   I agree completely.

01:42:17   I don't know if we've talked about this before, but I love talking about this.

01:42:20   I agree completely, and I think even Steve Jobs himself overlooked that aspect.

01:42:29   And if, you know, that, that it, you know, and I think that that's why the Mac in the

01:42:38   first two years was sort of problematic for Apple because it wasn't a failure, but it

01:42:43   wasn't the success that they had envisioned.

01:42:46   And I think that the success they'd envisioned

01:42:49   was that they themselves knew how amazing it was,

01:42:53   both compared to everything else on the market

01:42:56   and just in and of itself how successful they were

01:42:59   at the hardware, at the software, just everything about it,

01:43:03   that they were, you know, I think they were blinded

01:43:07   by how can, you know, and even the slogan,

01:43:09   the computer for the rest of us.

01:43:11   - There was no rest of us.

01:43:12   - Right, there was no rest of us.

01:43:13   There was nothing for them to do.

01:43:14   It would have been the computer.

01:43:16   And the things that were good about the Mac in 1984

01:43:21   are, if you just pick out a bunch of adjectives,

01:43:26   there, those, I would wager that 98% of those adjectives

01:43:30   apply to the iPhone in 2007.

01:43:33   Like, they're all the things that made, you know,

01:43:37   kindred spirits, same cultural DNA, same priorities.

01:43:43   It's just that the difference wasn't that one was more elegant or more ahead of the

01:43:48   competition, years ahead of the competition, and sweated more details and more pixel by

01:43:56   pixel precision of how far away should these things be and all of that.

01:44:02   Both were the same way.

01:44:03   The difference wasn't that one was better than the other.

01:44:05   The difference was that in 2007, there was a tremendous reason for anybody and everybody

01:44:11   to want to have an iPhone and there were things they would find it very useful for every single

01:44:15   day and in 1984 that just wasn't true of a personal computer.

01:44:21   It's spot on.

01:44:22   It really is the case.

01:44:24   The Mac versus Windows really is like the iPhone versus Android in every respect.

01:44:30   It's the same in terms of market share.

01:44:32   The iPhone is a little bigger than the Mac even today, but it's still only like 10 or

01:44:38   12% worldwide.

01:44:39   It's really quite small relative to Android.

01:44:41   And it's the same from the user experience.

01:44:44   Windows has some nice features.

01:44:45   Android has some nice features.

01:44:46   I've used both.

01:44:47   I've worked at Microsoft.

01:44:48   I use it every day.

01:44:50   I've said before, I'd actually be fine using Windows every day.

01:44:52   It's the third party app system that is the problem, which

01:44:55   blows people's mind because they associate apps

01:44:57   being with Windows.

01:44:59   But it's the details.

01:45:03   It's the ease of use.

01:45:04   It's the scrolling.

01:45:05   It's all the stuff that you can't put on a spreadsheet,

01:45:09   and you can't measure, and you can't put in your

01:45:12   sort of calculation about, oh, it's now good enough,

01:45:14   so what's gonna matter now is price,

01:45:16   because people can feel it and use it,

01:45:19   and that matters, again, it matters when the buyer

01:45:22   is the user, which is the case in the consumer market,

01:45:25   and Apple's just found the right market.

01:45:27   - Right, and I think in hindsight, too,

01:45:29   it's exactly why the entire, the entirety of the existence

01:45:34   of Next was effectively just an exile.

01:45:39   They were just lost in the weeds in terms of ever

01:45:42   having any hope of getting any traction whatsoever

01:45:45   because they were building these--

01:45:46   - It was the Mac 2.0.

01:45:49   There was no lesson learned about why the Mac failed.

01:45:51   - Except by pricing it the way they did

01:45:54   and they made it a way more amazing computer.

01:45:58   But initially it was targeted at academia.

01:46:03   - Well how the hell did they ever think

01:46:04   that was gonna be a big enough market

01:46:07   to build a successful computer

01:46:08   by only selling it to universities,

01:46:11   computer science departments?

01:46:13   I mean it's kinda crazy.

01:46:14   I mean I know that--

01:46:16   - Jobs just wanted to make the best possible computer.

01:46:19   And so he was gonna find

01:46:22   that was the justification for doing it.

01:46:24   And that's the thing why you have to keep the market in mind.

01:46:28   Again, Jobs didn't change from that perspective.

01:46:31   When he made the phone,

01:46:32   He wanted to make the best possible phone.

01:46:33   It's not like he said, "Oh, now the consumer market's ready.

01:46:35   Let's do it."

01:46:36   No, he just wanted, like, Apple has just always wanted

01:46:39   to make the best possible computers,

01:46:40   and those computers have shrunken in size over time,

01:46:43   and the market has come to Apple much more

01:46:45   than Apple has sort of gone to the market.

01:46:48   - Yeah.

01:46:49   All right, let me take a break here

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01:50:34   new Casper the Podcast, sponsored by Casper.

01:50:39   That's the name of their podcast.

01:50:40   Casper the Podcast, sponsored by Casper.

01:50:43   It's an entire podcast about Casper, sponsored by Casper.

01:50:48   It's very meta.

01:50:51   I'm intrigued by this.

01:50:52   I can't imagine what the hell it's about.

01:50:54   So I have to say I'm going to give it a listen.

01:50:56   It's available now on Apple Podcasts, SoundCloud, Stitcher, and anywhere else where you listen

01:51:02   to podcasts.

01:51:04   I'm damn curious about that.

01:51:06   And the only thing I hope, I just hope it doesn't mean that they're gonna stop sponsoring

01:51:10   other podcasts.

01:51:11   But I'll check it out.

01:51:12   Casper the podcast, sponsored by Casper.

01:51:16   I wish they would have asked me advice on the title of their podcast.

01:51:22   It's a little bit of a mouthful.

01:51:25   What else do we have to talk about?

01:51:26   We've got rolling out of these quarterly results.

01:51:30   You wrote about this.

01:51:32   Everybody's talking about this.

01:51:33   Who's going to be the first trillion dollar company?

01:51:35   And what do we mean by that?

01:51:37   I'll wait.

01:51:38   Ben?

01:51:39   Ben

01:51:39   Oh, sorry, I was muted. I just had the world's best explanation of market cap. But alas,

01:51:46   gone to history. No, basically how many shares you have times the share price. That's your

01:51:51   market cap, how much your company is worth.

01:51:52   Right. So you couldn't actually use it. In theory, it would be the price you'd have to

01:51:56   pay to buy every share of the company. But that's not possible. By the time you start

01:52:03   buying this, nobody's going to buy every share of Apple.

01:52:08   It's theoretically possible.

01:52:09   Theoretically possible, but that's the price you would pay number of shares outstanding times the current price. That's your market cap

01:52:15   So in other words what the company's worth and there's a couple of the who are the companies who are in the running for this

01:52:20   It's the they're all fairly obvious

01:52:22   Yeah

01:52:23   Well, I mean this is the will actually actually get the updated numbers because Apple's share price was was up a lot today a lot

01:52:30   today five percent real quick and

01:52:32   On a day when the market was literally like dead even at least last I checked

01:52:36   It was a right at like zero for this and p500. We got apples tops a second is

01:52:42   Amazon I think Microsoft is now slipped into third Microsoft and Google are very very close Microsoft and Google

01:52:50   Yeah, Microsoft has been they passed Google a few weeks ago

01:52:52   Which is which is interesting and then in fifth place. Oh, I got it. Yes. So the big five Apple is now at

01:52:59   894 billion dollars Amazon 761 billion

01:53:06   Green on my chart here is Microsoft at 716 billion,

01:53:10   Google at 712, I am ignoring rounding here.

01:53:13   And Facebook is at 508.

01:53:15   What's interesting is that Facebook and Amazon

01:53:18   in last fall were about the same price.

01:53:21   They were both worth about $520 billion.

01:53:25   Facebook is slightly down since then,

01:53:27   and Amazon has increased by 50%.

01:53:29   - Well, no, and if you look at your graph,

01:53:32   You go back to, all the way back to Facebook's IPO, really,

01:53:37   they tracked with Amazon very closely,

01:53:40   where for the first year or so, they were under Amazon.

01:53:44   And then starting in 2014, they crossed paths,

01:53:47   and then they actually surpassed Amazon, but not by a lot.

01:53:50   And then for the most part, throughout 2016 and 2017--

01:53:55   - To basically the end of 2017.

01:53:59   - Yeah, they were effectively,

01:54:01   I mean we're talking about like the just looking at this graph clearly the type of thing where like one day's bad news

01:54:06   You know like Jeff Jeff Bezos has a hangnail

01:54:09   Could you know could alter it where they were dead even and then all of a sudden? Holy hell they they're separated by a lot now

01:54:17   Yeah, two hundred and two hundred sixty billion dollars, which you know

01:54:22   The no one knows anything is probably part of the answer and it's all a bit of a power game, right?

01:54:28   I mean, it doesn't really matter.

01:54:30   It's kind of breaking rights more than anything, and who's actually doing the breaking, other

01:54:33   than fans, as it were.

01:54:36   But I thought it was a useful ... The reason why I thought it was interesting to look at

01:54:39   it from this perspective is, one, Apple and Amazon are the top two, and I wanted to kind

01:54:45   of draw out a point about how these companies are similar.

01:54:48   But two, the fact that a round number, $1 trillion market cap, it doesn't really mean

01:54:54   anything.

01:54:55   It's kind of irrational.

01:54:56   Yet, we attach all kinds of importance to it.

01:54:57   I think gets at the broader point about the consumer market that we talked about previously,

01:55:02   right?

01:55:03   People care about silly stuff, and quote unquote, "silly stuff."

01:55:07   And maybe-

01:55:08   Well, and like you said, it's like you said, is it really different if you're worth a billion

01:55:11   or if you're worth 999 billion?

01:55:15   No.

01:55:17   But yeah, it doesn't really matter, but we think it matters.

01:55:21   We care.

01:55:22   We do care.

01:55:23   matter if your phone doesn't scroll absolutely buttery smooth? It doesn't actually matter.

01:55:29   You can still see the same content, you know what I mean? You've had this debate a million

01:55:34   times with Android fans or Windows fans. Does that stuff actually matter?

01:55:38   That was kind of...

01:55:39   I'll tie it back.

01:55:40   I'll tie it back to the opening of the show. Would it really have been any less amazing

01:55:47   athletically if Wilt Chamberlain had scored 98 points in an NBA basketball game?

01:55:53   No, it would have still been as

01:55:57   not, you know, at least 98% as much of

01:56:00   unbelievable, it doesn't seem mathematically possible achievement, but guess what?

01:56:06   We wouldn't talk about it as much because he scored a hundred points in an NBA basketball game, right? Those,

01:56:12   Right those two are 99 points right if he died 99 points it it would not have been as special

01:56:18   Yeah, I mean Russell Westwick basically won the MVP last year because he averaged a triple-double which is a total sort of like meaningless

01:56:25   stat in the grand scheme of things and I think it was a

01:56:28   You shouldn't have won it, but you know it. It's a great story, right?

01:56:31   It's a it's a great story and stories matter and humans like humans run on stories

01:56:37   I mean yeah

01:56:37   I look at my own site, the articles that often resonate are not the ones with the brilliant

01:56:44   analysis or something clever.

01:56:47   It's the ones that tell a story.

01:56:50   That matters in a way that people know it implicitly, but they have a very difficult

01:56:57   time articulating that.

01:56:59   I think it's in the software to talk about disruption in analyzing companies.

01:57:05   If you're selling to consumers, there's so much that goes into it that it doesn't go

01:57:10   on a spreadsheet, and that sort of stuff matters.

01:57:13   Anyhow, so the point of this article was, these companies, Apple and Amazon, are really

01:57:20   polar opposites.

01:57:21   Everything about them is different.

01:57:23   I mentioned the Fire Phone before.

01:57:26   It was predictable that it was a failure because Amazon is even more extreme of a service company

01:57:32   than Apple is a product company, if that's even possible.

01:57:34   Well, let me hear it.

01:57:35   I'm just going to read your words from today's Daily Update, because I think this is perfect.

01:57:41   Here's what you said.

01:57:42   "I mean it when I say these companies are the complete opposite.

01:57:44   Apple sells products it makes.

01:57:46   Amazon sells products made by anyone and everyone.

01:57:49   Apple brags about focus.

01:57:51   Amazon calls itself the everything store.

01:57:53   Apple is a product company that struggles at services.

01:57:56   Amazon is a services company that struggles at product.

01:57:59   Apple has the highest margins and profits in the world.

01:58:01   Amazon brags that others' margin is their opportunity and until recently barely registered

01:58:07   any profits at all.

01:58:09   And underlying all of this, Apple is an extreme example of a functional organization and Amazon

01:58:14   is an extreme example of a divisional one.

01:58:17   I mean, that's perfect.

01:58:18   I mean, I, you know, you're never going to come out with a better thing like that, speaking

01:58:22   here extemporaneously on the podcast.

01:58:24   So I've just got to say it right there.

01:58:25   I thought that was my favorite paragraph I've read in a while.

01:58:28   Because that is...

01:58:29   Well, thank you.

01:58:30   spot on though. They really are opposites. Yeah, and it gets back to the Microsoft point,

01:58:37   right? There's no one way to succeed in business. And I think it's easy for Apple fans to fall

01:58:44   into the lens of everything should be like Apple because Apple is super successful.

01:58:47   When the reality is, is most people should not be like Apple because what Apple does is really

01:58:52   difficult and hard to accomplish and has so much that goes into it. I think I've mentioned this on

01:58:57   on the podcast previously, but I was talking to a Windows engineer back when I was at Microsoft

01:59:03   about why, again, I always mention the Android scrolling thing because it's my single least

01:59:07   favorite thing about Android and I don't want to hear about it even though the latest phones

01:59:10   still have problems.

01:59:12   But I was complaining about it way back then.

01:59:14   I'm like, "Why is it that Windows phone can come out in V1, it has good scrolling and

01:59:19   iPhone obviously is amazing and the Android one is so bad?"

01:59:22   And he went into some technical stuff about some of the Android implementation details

01:59:25   and the, wow, it's running a virtual layer on and stuff.

01:59:28   But he's like, honestly, the real answer is,

01:59:31   at the end of the day, Microsoft and Apple

01:59:34   have been writing graphics drivers for 30 years,

01:59:36   and Google has been writing them for three years.

01:59:38   He's like, there's just stuff you learn that pays off,

01:59:43   and certainly that goes into all sorts of Apple's advantages.

01:59:47   But again, that's not the only way to succeed,

01:59:50   and heaven knows, having great scrolling

01:59:53   is not the only way to succeed in the phone market,

01:59:54   as Google sort of clearly demonstrated.

01:59:56   And it's useful to think about these two companies

01:59:59   in that context.

02:00:00   Like, there's no one right way to do it.

02:00:02   - Yeah, that's very true.

02:00:05   That's very true.

02:00:06   - I cast myself very far afield with that anecdote,

02:00:09   but hopefully you came back in.

02:00:10   But I think, what was interesting though,

02:00:13   about these two companies is, you know,

02:00:14   both are really fanatical from sort of the top down

02:00:19   about emphasizing that they're focused on the end user,

02:00:23   on the customer.

02:00:24   and what makes the customer happy.

02:00:25   And the reason why I think that's interesting was,

02:00:29   one, it's always been striking

02:00:31   that both would speak the same language,

02:00:33   yet go about their business so completely differently.

02:00:36   But two, like I said,

02:00:39   I like to think about this sort of disruption thing.

02:00:41   And I wrote that article around the iPhone 5C

02:00:44   that was saying why Apple would not be disrupted.

02:00:46   And my take there was,

02:00:48   if you're focused on the user experience,

02:00:50   on making something that's great to use,

02:00:52   The great thing about it is you're never going to perfect it.

02:00:56   Nothing is ever going to be perfect.

02:00:58   - Or good enough.

02:01:00   Right?

02:01:01   - Right.

02:01:02   Yeah, there is no good enough when it comes to

02:01:04   the experience of using something.

02:01:06   Good enough is like a disruption term.

02:01:07   And there's good enough and overshoot.

02:01:10   This idea that the incumbent overshoots what customers want

02:01:13   and customers stop caring about that feature

02:01:16   and they start focusing on other things like price.

02:01:18   But you can't overshoot how great it is to use something.

02:01:22   You're not like, "Oh, this phone is too fun to use.

02:01:24   I want to get a different one."

02:01:26   And it's as you point out, you quote from, I forget if it was Bezos shareholder letter

02:01:31   this year or his original one that he always reprints from 1997.

02:01:36   But one of the great things about customers is they're never fully satisfied because once

02:01:42   you've delighted them with two day delivery, for example, for free, and they're like, "Holy

02:01:49   crap.

02:01:50   I just ordered this two days ago and I didn't pay anything extra."

02:01:51   Ding-dong here it is at my door

02:01:53   They're amazed and they're happy and they think that's this Amazon is great

02:01:56   And then like by the time the third box arrives like that they expected two days, right?

02:02:00   We've showed up at 7 p.m. Why wasn't it here at 4 p.m.

02:02:03   And then you've got to do one day delivery and now they've got to get same-day delivery and to get you know

02:02:09   the wow factor in

02:02:11   That you know you you get you know

02:02:13   Bezos emphasize it but it's true and everybody knows it should we get used to everything right? I mean up

02:02:19   Are you amazed that you get to?

02:02:21   Go to the bathroom and indoors with a electric light electric light over your head

02:02:28   and have a

02:02:31   Water system where you can hit a button or pull a dial and the waist just goes away

02:02:36   Are you amazed by that? No, we're talking about we're talking about calling home, right? Like I

02:02:41   Started this call to be complaining about Skype as usual within with 15 years ago

02:02:47   I was standing at a payphone trying to call home using a calling card, right? I mean,

02:02:51   it's so true. And that was sort of the key addition. That was the point of this article.

02:02:55   I wanted to sort of go back to that article I wrote five years ago. And it's like, you know,

02:03:00   I actually didn't have this quite right. It's not just that a user experience can never ... Because

02:03:04   I always thought about it as like you approach a perfect user experience, but you can never get

02:03:08   there. But actually, it's different. The consumer expectations, like the phrase moving the goal

02:03:14   Go-posts are constantly changing.

02:03:17   What is great today is totally blase tomorrow.

02:03:20   It follows that if your business is predicated not on a product, and this is where Apple

02:03:28   arguably went wrong with the ... We talked about it earlier with the airport.

02:03:33   If your focus is not the product, but on the user, on making them happy, meeting their

02:03:40   needs, and you're able to let go of the means by which you do it and keep that as you're

02:03:44   or North Star, that is the best possible way to build a long-term sustainable business.

02:03:49   Because it's like having, it's like those Greyhound races where they have the bone going

02:03:54   around and they're all chasing it, right?

02:03:56   And you never catch it.

02:03:58   You're never going to catch it.

02:04:00   And from a business perspective, that's great because to achieve your goal is often the

02:04:05   worst thing that can happen to you as a company.

02:04:07   Because then you're like, "Okay, what's next?"

02:04:10   And that's never gonna happen if your goal is making people happy on a consistent basis.

02:04:15   Yeah, exactly.

02:04:16   I mean, just people, everybody listening to us talk.

02:04:19   I mean, the average episode of the talk show, I think, is somewhere over 100 megabytes.

02:04:25   And yes, I could, if I really were constrained, I could, you know, and I were doing this 15

02:04:29   years ago, I'd use a lower bit rate.

02:04:32   But whatever size I would have got to where we were still, it sounded decent enough that

02:04:36   people wouldn't mind listening to us.

02:04:39   big that MP3 file is, Times, how many people download this show, it would have bankrupted

02:04:46   me.

02:04:47   I don't know, 15 years ago when I started Daring Viable, there was no way for someone

02:04:52   like me to host a podcast.

02:04:54   It wasn't possible.

02:04:57   That's just 15 years.

02:04:58   Yeah, and it's like this with everything.

02:05:01   You look at the phone and there's complaints about, "Oh, portrait mode is kind of lame.

02:05:07   You have weird artifacts in your picture."

02:05:09   It's like, one, you're taking a picture on your phone.

02:05:11   Two, it looks amazing.

02:05:13   Three, the computer is simulating thousands of dollars

02:05:17   worth of equipment and doing a passive challenge.

02:05:19   - Yeah, it looks like terrible.

02:05:20   It looks like standing here, whatever.

02:05:22   - But it's a great thing.

02:05:24   And honestly, I mentioned this,

02:05:27   I don't think in this article, but in Daily Update,

02:05:28   there is a very, that phrase about consumers

02:05:31   being divinely discontent is a very inherently optimistic

02:05:36   sort of phrase about humanity in general,

02:05:38   because you think about automation coming along,

02:05:41   and people are so worried about people losing their jobs

02:05:43   and computers taking over.

02:05:44   Well, if you look back, you had the same concerns

02:05:47   with the agricultural revolution,

02:05:48   the same concerns with the industrial revolution.

02:05:50   And not to say the transition wasn't painful and difficult,

02:05:53   and it was, and there were wars,

02:05:55   and it was terrible and awful.

02:05:56   So I'm not at all overlooking that,

02:06:00   and I think we should take that to heart

02:06:02   when we think about the internet revolution, what's happening.

02:06:05   But if you zoom out, like you and I,

02:06:08   you are getting paid for this podcast,

02:06:10   and I get paid to write these articles,

02:06:14   and those jobs didn't exist, and yeah,

02:06:16   maybe we are on the sort of the cutting edge

02:06:19   of new jobs enabled by the internet,

02:06:21   but you look around you at the next 100 people

02:06:25   you meet on the street, how many of them are doing jobs

02:06:27   that existed in any shape, way, or form 100 years ago?

02:06:29   And why, because humans are divinely discontent.

02:06:33   We're always figuring out problems and ways to fix them.

02:06:35   Right, and both, I think your key insight in that update is that in their own ways,

02:06:40   and they are different ways, but in their own ways, Amazon and Apple at their fundamental

02:06:44   level are both keyed in to take advantage of that and to push the limits of, you know,

02:06:51   to push that ahead.

02:06:54   You know, I was just talking to somebody, a couple guys, Glenn Fleischman and a couple

02:07:02   of others about the original, I forget what we were reminiscing about on Twitter, but

02:07:06   about the original iPad event and a bunch of us were there in the hands-on area until

02:07:14   Apple very politely, like 90 minutes after it opened up, were like, "Hey, guys, we don't

02:07:20   want to kick you out, but we're kicking you out."

02:07:22   We couldn't stop playing with it.

02:07:24   And none of us were on the, at that time in 2010, were on the review.

02:07:30   That was still back in 2010 when Walt Mossberg and David Pogue and Ed Beg at USA Today were

02:07:36   like the only three people who got review units.

02:07:40   So we didn't get to leave with one.

02:07:41   We had to wait until they went on sale and buy one and wait until it showed up.

02:07:44   So we wanted to play with it.

02:07:46   And the thing I was so amazed about was just how gorgeous the display was.

02:07:50   I was just like, I'd never seen a 10-ish inch display that was so beautiful and that the

02:07:58   pixels seemed so small and the color was so bright and it was like it was definitely a

02:08:05   better display than any MacBook display at the time. It was just better. Those displays

02:08:11   -

02:08:12   Yeah, that's because that was pre-retinol. So there was no, even though that wasn't retinol,

02:08:16   there was no comparison.

02:08:17   It looks terrible now. It looks like it's broken because it's not retina. Apple has

02:08:23   is keyed in on that, Amazon is keyed in on that.

02:08:26   The thing is, and in both of those ways,

02:08:28   they're aligned with their customers.

02:08:31   All of the ways that Apple is pushing ahead

02:08:35   to make things nicer, experience on their products,

02:08:39   is about making their customers happier

02:08:41   in all of the ways that Amazon is focused on

02:08:43   getting better service and providing better products

02:08:48   and more products and faster shipping

02:08:51   and getting into groceries with the Whole Foods

02:08:54   is all about making their customers happier.

02:08:55   They're just in perfect alignment with that.

02:08:58   And with Facebook and Google,

02:09:01   and you know, Microsoft is sort of the wild card, right?

02:09:05   Because they're just sort of,

02:09:06   they're like, your description is that

02:09:07   they are an enterprise company now.

02:09:09   And so they're the odd one out of all five.

02:09:14   But Facebook and Google are effectively

02:09:15   in the same business, selling ads targeted

02:09:19   to what they know about the people using their products.

02:09:24   And in a lot of ways, their business is not aligned

02:09:28   with making their customers ever happier

02:09:30   because Apple only makes money

02:09:33   when people buy more stuff from Apple.

02:09:35   And so they're only buying, you know,

02:09:37   the more money they make from John Gruber,

02:09:40   they're not doing anything that annoys me,

02:09:41   but to make more money from me,

02:09:43   Google has to show me more ads,

02:09:47   possibly ever more intrusive ads that freak me out because how do you know that I was

02:09:51   looking for that, et cetera, et cetera. It's not in perfect alignment with my customer

02:09:55   satisfaction and my happiness and my pleasure with Google or Facebook.

02:10:01   It's true though, but one thing I do push back on is the whole phrase like, "If you're

02:10:07   not the customer, you're the product," or whatever that is.

02:10:10   I hate it. I absolutely hate it. And I hate it because the... Let's go back to Apple

02:10:15   on for a second. What makes this focus on the customer so powerful is not just that it keeps

02:10:20   your business relevant in the long term in a really powerful way, but also that gives you

02:10:26   power over your entire supply chain. In Apple, it can be the actual supply chain and components,

02:10:32   or it could be the app store. The real reason Apple beat so big this quarter is because their

02:10:38   service revenue was through the roof. And at the end of the day, Apple's services revenue,

02:10:43   Well, they deserve it.

02:10:44   It's kind of bullshit, right?

02:10:45   Because it's all app developers, and Apple's just

02:10:47   taking a skim off of it.

02:10:48   Why can they do that?

02:10:49   Because they own the customer.

02:10:51   If those app developers want to reach the customers,

02:10:53   they have to go through Apple, and Apple's

02:10:54   going to take a piece of that.

02:10:56   I mean, that's Amazon's long-term goal as well.

02:10:58   They take a--

02:10:59   Let me take-- sorry, go ahead.

02:10:59   Let me take a note here.

02:11:00   And I don't want to interrupt you.

02:11:02   I mean, this is going to be a long side note.

02:11:05   So maybe you better finish your thought.

02:11:07   Well, the point, though, is there's

02:11:09   power that comes from owning the customer relationship.

02:11:11   And that absolutely applies to Facebook and Google.

02:11:14   The reason they are so powerful, the reason why, you know, Google is always my favorite

02:11:18   example.

02:11:19   Like, Google, what, every single site on the internet actually goes to the effort to make

02:11:25   their site amenable to Google.

02:11:27   And they have like a map of their site, like that's there just for search crawlers, right,

02:11:32   according to Google's specification.

02:11:34   Like Google doesn't have to do any work to have every, like everyone does the work for

02:11:38   Google to put themselves there so Google can profit.

02:11:40   Why?

02:11:41   Because all the customers go to the internet via Google.

02:11:45   Same thing with Facebook.

02:11:46   And so there's a limit.

02:11:48   And Facebook, for example, they stopped the number of ads that went into the newsfeed

02:11:51   a year ago.

02:11:52   And why?

02:11:53   Because they were worried about the customer experience.

02:11:57   No, not because people were paying them, but because all their power and all their profits

02:12:02   and all the things they get from advertisers ultimately rest on the fact that they have

02:12:08   all the customers.

02:12:09   And so is it as aligned as an Apple Amazon model?

02:12:12   No, it's not.

02:12:13   But it's also not the case where they just treat people like crap because they don't

02:12:17   need to care.

02:12:18   They do need to care, and they do care very much.

02:12:20   So I've ... This thought has been festering in my head for a while.

02:12:26   And it's ... I'm always ... I know that there's people out there who think I'm always looking

02:12:32   for ways to say good things about Apple, but I'm actually always thinking the opposite

02:12:36   is I think, you know, I know where my biases are

02:12:40   and I wanna defend against them.

02:12:41   The services thing and the growing services revenue,

02:12:46   and if you look at, you know, go to Jason Snell's

02:12:48   sixcolors.com where he's got some,

02:12:50   breaks down Apple's financials into graphs,

02:12:53   which I think are very well done

02:12:55   and really help visualize the actual data,

02:12:57   and again, to visualize the trends.

02:13:00   The services thing was stuck

02:13:04   in the four billions per quarter for a long number of quarters.

02:13:08   And it was steadily going up quarter after quarter.

02:13:11   But in the last couple of years, it's gone on a curve.

02:13:15   It's no longer linear.

02:13:16   It is going upwards, and it's a curve.

02:13:19   And it coincides with when Apple has started talking specifically

02:13:24   about services, services, services on these quarterly calls

02:13:27   and building it up.

02:13:29   And they weren't wrong to do it because they were correct

02:13:33   this was going to be a bigger part of their revenue.

02:13:38   But listen to this.

02:13:39   Here's a tweet from Mark Gurman yesterday.

02:13:41   You know, in his role as a Bloomberg reporter, I guess he got to speak to Apple's CFO.

02:13:47   Here's his tweet.

02:13:49   And while Apple Music is all the talk, when I spoke with Apple CFO Luca Maestri this afternoon,

02:13:55   he said that the App Store is actually the strong driver of the rapid services growth.

02:14:02   And you, not only that, to surprise you, you sort of alluded to that a few moments ago.

02:14:06   Well here's my sort of hmm about that.

02:14:10   Where's the money that the app store makes coming from?

02:14:15   I think it's games.

02:14:16   And what type of games are they making the money from?

02:14:19   I think a lot of it is are these games like Candy Crush.

02:14:24   And I don't think that that is a source of revenue that Apple should be particularly

02:14:32   proud of.

02:14:34   I think that there's this whole sector of casual games that are, oh shit, you're gonna

02:14:42   have to help me on this.

02:14:43   So there's pay-

02:14:44   Pay to win.

02:14:46   Pay to win.

02:14:49   So there's three types, which is, or sorry, they're free to play.

02:14:54   both pay to win free to play are the same idea. The idea is you can pay it for free,

02:14:59   but if you actually want to win the game, you're going to have to pay money along the

02:15:02   way, as opposed to free to win, which you never... It's free and you can win the game

02:15:08   without paying a dime, like Fortnite.

02:15:13   Fortnite is a game, I wrote about it recently, my son is into it. I just saw an article in

02:15:16   the New York Times today about how Fortnite is driving this trend of esports where people

02:15:22   are actually like, it's like, literally, it sounds amazing, but they're rejuvenating malls

02:15:29   and movie theaters.

02:15:30   You know how like retail in the U.S. has gone into decline and shopping malls, a lot of

02:15:34   shopping malls have either closed or they've like closed like the West Wing and moved everybody

02:15:40   to the East Wing and half, they're reopening the malls to build theaters where people can

02:15:46   watch people play video games and the leading game is Fortnite.

02:15:51   And if you had told me this a year ago, I would have rolled my eyes, but I really, I

02:15:55   don't play Fortnite.

02:15:56   I've never, I haven't played it for a moment.

02:15:58   But I've spent, not hours, but well over an hour in the aggregate watching my son play,

02:16:05   and I enjoy it.

02:16:06   I enjoy watching him play the game.

02:16:08   It is, to me, I see the brilliance of this Fortnite game.

02:16:12   It is, to me, clearly more balanced in a way that a sport is properly balanced, right?

02:16:20   Like the rules of any successful sport have some kind of balance to them between the offense

02:16:24   and the defense, right?

02:16:25   Like the rules of every sport, basketball, soccer, baseball, whatever you name it, start

02:16:32   out shaky and then they evolve in the way that makes it a better game.

02:16:38   Basketball originally didn't have dribbling.

02:16:40   You had to just, it was like Ultimate Frisbee sort of like that.

02:16:45   Like if you had the ball, you had to stay still and pass it to somebody else.

02:16:50   Well, you know, dribbling made it a better game.

02:16:53   Fortnite has rules and it just seems balanced in a way

02:16:57   that is like a sport, I can see it.

02:16:59   But the amazing thing about Fortnite is it's a free game,

02:17:03   it's super high quality graphics and sound and everything,

02:17:07   but you can download it for free and play it for free.

02:17:10   And you have just as good a chance of winning

02:17:14   and growing an experience as somebody who buys their,

02:17:17   they make money through in-app purchases,

02:17:19   But their in-app purchases are for things like costumes for your character and dances,

02:17:26   dance moves your character can pull.

02:17:29   You know, effectively like sticker packs for a game.

02:17:32   And they don't give your character any sort of advantage.

02:17:35   So I'm a grown man with a nice income, so I could, if I were a Fortnite enthusiast,

02:17:42   easily pay them, let's say, $100 of real US dollars to buy stuff.

02:17:46   And there are games like this and buy weapons and armor and somebody else like a 14 year

02:17:54   old kid who doesn't have a job and doesn't have money and has parents who say, "No, I'm

02:18:00   not giving you $100 to spend on in-game garbage," doesn't have them and can't beat me because

02:18:08   I've got these weapons.

02:18:10   Fortnite is the opposite of that.

02:18:12   You play for free and you have every bit as good a chance as somebody who pays.

02:18:17   That's amazing to me.

02:18:19   And then, you know, Candy Crush is the one I'm familiar with, but there's dozens of them.

02:18:22   And I know there's all these games with angry cartoon characters with beards.

02:18:28   I forget the, you know, Clash of Clans.

02:18:32   Where if you don't pay that, sure, it's a free download for the app, but if you don't

02:18:35   pay the money and keep paying the money as you continue your addiction to this game,

02:18:42   you don't have a chance, or you have barely a chance.

02:18:46   - Two points to follow up.

02:18:50   One, you are exactly right that the vast majority

02:18:52   of Apple's revenue from the store

02:18:53   comes from exactly those type of games.

02:18:55   And I wrote about this way back when Chuckery started

02:18:59   that same thing, I felt like Apple was being blinded.

02:19:02   This is when I was on my big campaign

02:19:04   that Apple needed to allow upgrade pricing

02:19:07   and they needed to allow subscription for apps

02:19:09   because they think the App Store is a huge success,

02:19:12   but actually they're making all this money on these games.

02:19:15   And it's not just that, that the games were questionable.

02:19:19   Is that something that you want to be,

02:19:22   can you be proud of making money off of all those games?

02:19:25   But also that all those games were easily ported to Android.

02:19:30   They don't have any interaction with the operating system.

02:19:35   There's no, it's not like they're using iOS controls to build it.

02:19:39   And so they all were, they were all ported and it really diluted Apple's one sort of

02:19:46   really meaningful app advantage when actually it ended up being that this is the stuff that

02:19:50   actually mattered.

02:19:52   I still believe Apple foreclosed a huge opportunity to have a thriving ecosystem of high-end productivity

02:20:00   apps that would have never been ported to Android because those are the apps that have

02:20:03   so much more difficult to port, not just because porting's hard in general, because Android's

02:20:07   fractured and there's so many devices to support, and all that stuff's real, but that's easy

02:20:11   to handle if you're just running a game on Unity and Unity's abstracting everything away

02:20:14   for you, right?

02:20:15   And Apple, I think, was another example where they were getting billions of dollars and

02:20:22   it blinded them to what was going on there, so that's number one.

02:20:25   Number two, though, this idea of these games, I wrote this article called "Selling Feelings,"

02:20:30   I put it in the show notes.

02:20:32   And in this case, I was talking about League of Legends,

02:20:33   which was the same sort of idea,

02:20:35   and also very popular from a sort of e-sport perspective,

02:20:38   although not Fortnite level.

02:20:39   Or I should give credit to Players Unknown's Battlegrounds,

02:20:43   which Fortnite was kind of,

02:20:45   the second version came after them.

02:20:48   But this idea of creating a world

02:20:51   that people like to be in and has a visual component

02:20:55   and an audience and people watching.

02:20:57   And then once you create the world,

02:21:00   then you own the economy of the world,

02:21:02   and you can actually sell stuff.

02:21:04   And selling the stuff, again, is no different

02:21:07   than selling like a luxury handbag, right?

02:21:10   You buy it because you enjoy it, it gives you status,

02:21:14   you like showing it off, it differentiates you.

02:21:17   And these companies are creating worlds,

02:21:21   and they're creating more immersive worlds

02:21:23   and larger worlds by virtue of being free,

02:21:25   'cause everyone can be there, everyone can watch it,

02:21:27   everyone can be familiar with it.

02:21:28   And free's a big deal.

02:21:30   you talk about Facebook and Google,

02:21:32   like they will never be supplanted by a paid competitor, ever.

02:21:36   It's folly to even think about it,

02:21:37   because both of them are predicated

02:21:39   on having the most possible people, the most possible data,

02:21:41   which means a free,

02:21:42   it's like our messaging discussion earlier,

02:21:44   a free alternative is always going to win.

02:21:47   And it's the same thing here.

02:21:48   If you have a free game,

02:21:49   a big reason why Fortnite displaced players

02:21:51   on those Battlegrounds is you had to pay,

02:21:52   you had to pay for players on those Battlegrounds,

02:21:54   and Fortnite was free.

02:21:55   And so you're gonna have more users,

02:21:57   but if you have more users,

02:21:57   actually have completely new capabilities to sell things that, yes, they seem stupid,

02:22:05   right? They seem stupid like scrolling seems stupid. They seem stupid like all this sort

02:22:09   of like $1 trillion seems stupid. Yes, if you want to take a very analytical, sort of

02:22:16   nerdy approach and say, "Well, 999 billion is the same as 1 trillion. Who really cares?"

02:22:20   Yes, I guess you're right, but that's not how humans actually work. Humans actually

02:22:24   care about round numbers, humans actually care about having a cool dance move, humans

02:22:28   actually care about showing off, they actually care about status, and all these games are

02:22:32   profiting by tapping into, by becoming more human, by becoming more in touch with what

02:22:38   customers actually want.

02:22:40   Right.

02:22:41   Right.

02:22:42   Like, you know, we go to the playground and I'm wearing, you know, a $150 pair of LeBron

02:22:50   sneakers from Nike and you're wearing a $40 pair of sneakers. Do I have any kind

02:22:58   of advantage to beat you on the court? No. But is there, you know, is there a

02:23:03   reasonable, you know, might you be jealous of my $150 sneakers? Yeah. You know what I

02:23:08   mean? Like the game? Yeah, I just find it fascinating. I feel like exactly like you

02:23:12   said, it is more like real life. Like there is, you know, human emotions, status

02:23:17   And you know just feeling you know the way you if you really feel like you've got some cool sneakers

02:23:22   You know you feel good about yourself

02:23:24   It's really fascinating to me, but I really think that this services thing

02:23:30   I'm not saying Apple should be ashamed of it, but I just don't think I don't know that that's entirely clean money

02:23:36   that's coming from those games like Candy Crush and

02:23:38   And it's not you know you know I like it. I like playing casino games

02:23:44   I don't like playing slot machines personally, but you know

02:23:47   I'm not gonna you know if that's what you know, it's clearly more popular than than the table games that I like to play

02:23:54   And I get it. I know that there are people who you know can't handle, you know, their gambling addiction

02:24:00   you know, I'm sort of a

02:24:03   Libertarian in the sense that I don't think that casinos should be illegal because some people have a problem with gambling. I don't think

02:24:10   Alcohol should be illegal because there are many people who can't

02:24:14   Control their consumption of alcohol. I think those things are unfortunate, but I don't think you know personally

02:24:21   I think most people agree with me. I mean our country tried tried outlying alcohol. It didn't go it didn't go very well

02:24:27   You know it's not a perfect world

02:24:30   But you know that said and so I don't think that like

02:24:37   I'm not willing to say that Apple should ban the Candy Crush type games from the App Store

02:24:42   But I still I don't know that they should be proud about it

02:24:45   And I wouldn't be surprised if at some point in the next few years

02:24:48   The attention of the entire world sort of comes down on those type of games and the people who are addicted to them because I what?

02:24:56   I've read and I don't think this is surprising is that those games make almost all of their money

02:25:01   From and they even use the same term that casinos use they call them whales

02:25:06   Right? It's there's all of the regular people who might just enjoy Candy Crush and pay, you know, maybe they paid

02:25:13   I don't know ten twenty dollars a week to

02:25:15   buy their gold coins and and can easily afford

02:25:18   ten to twenty dollars a week and you think like but that's you know in one sense you think that's crazy because like

02:25:24   You know you buy like a high-end new title for the PlayStation and it's $60 and that's like an expensive video game

02:25:32   right? 60 bucks and you get like the the new whatever it's called. And here

02:25:38   there's you know millions of people spending let's I don't know 10-20 bucks

02:25:43   a week on Candy Crush and you think well hell if you spend 10 bucks a week on

02:25:47   Candy Crush that's at $500 a year for a video game like if you spend 20 it's a

02:25:53   thousand you know but you know people there's a lot of people who spend 20

02:25:56   bucks a week on scratch-off tickets at the for the lottery you know you that's

02:26:03   not a problem but the the thing I've read is that there's the the problem is

02:26:08   that people who are spending you know a hundred or a hundred and fifty dollar a

02:26:13   week or however much money they have in their debit account they spend on candy

02:26:18   crush stuff you know money that they can't afford to lose and that those are

02:26:22   the people who they make the overwhelming amount of money from. And I do wonder whether

02:26:28   ultimately a company like Apple and Google, for running these stores and enabling this,

02:26:35   you have to look at that. So I don't know. That's my side rant on the services revenue,

02:26:42   quote unquote, services.

02:26:44   Well, here's another example. This is an issue with all the services revenue. And if you

02:26:51   want to get into Apple in long-term concerns,

02:26:53   it remains being that they start reaching into areas

02:26:57   that they're not as great at for growth,

02:26:59   and that's, you know, it's not as great

02:27:02   of a customer experience.

02:27:03   But for the, here's a perfect example,

02:27:06   what's the second biggest item in services revenue

02:27:09   after the App Store, do you know?

02:27:11   - No, actually, I don't know, and I don't even,

02:27:15   I feel like I should be good at guessing this.

02:27:18   - iCloud storage.

02:27:19   - Really? - iCloud storage.

02:27:21   It is that crappy five gigabytes on your phone

02:27:23   and it comes up bugging you, bugging you, bugging you

02:27:25   to upgrade to storage.

02:27:27   And Apple is out here on these earnings calls

02:27:29   bragging about the fact that they provide

02:27:31   a shitty backup experience on their phones

02:27:32   and it makes them a lot of money

02:27:33   for all intents and purposes.

02:27:35   And again, this is where they get in trouble

02:27:37   because this is their narrative,

02:27:38   the services are driving it.

02:27:39   And from a financial perspective,

02:27:41   it's a very fair argument to make

02:27:43   because yes, our user base may not be growing very rapidly

02:27:46   or maybe not at all, but we're making more and more money

02:27:50   from our users, but that money, it's not all like making

02:27:55   a great customer experience money, it's just not.

02:27:59   - And it's really, you know, that's, I'm sad to hear that.

02:28:04   Hopefully, hopefully they're of the opinion

02:28:08   that they can increase those storage tiers

02:28:11   and keep selling, you know, keep making that money

02:28:17   even by making the free tier a lot bigger than five gigabytes.

02:28:23   It would be interesting to know how that breaks down, like how many of the people...

02:28:27   'Cause I think the biggest problem with their storage tiers, I think all of them should

02:28:30   be bigger for what you're paying for, or cheaper for the same prices, one way or the other.

02:28:37   But the single biggest problem to me is the five gigabyte free tier, because most people

02:28:43   want to use the free tier and five gigabytes just isn't enough and every single year it

02:28:49   becomes less good because the biggest thing at least in mine and my account and certainly most people's is their photos and videos and

02:28:58   Their photos and videos keep getting bigger because the cameras are getting better. I mean we should you know, I'm

02:29:03   4k is off by default and I'm sure a very low majority of iPhone users don't even know that they could enable 4k

02:29:13   In settings not that it's hidden

02:29:15   but that it's just not the thing people think about most people think I want to shoot video and they just go to photos and

02:29:20   Scroll over to video and they need to shoot video, right?

02:29:23   But even those default videos are getting bigger because the camera is getting better

02:29:28   Yep, and here you go from from the earnings call bragging. I called the Luca Maestra

02:29:34   Yeah, I called storage revenue was up by over 50% year over year to a new all-time record

02:29:39   I really hope that they think that they see that that's however good that is that it's still they need to

02:29:46   Because that's one of the things I'm looking for at WWDC this year is I if they don't announce

02:29:51   You know like to me. It's very much equivalent

02:29:55   You know because it's storage so it's very comparable it to the 16 gigabyte base

02:29:59   Storage on the actual phones for a number of years, and how long they stuck with 16 gigabytes as the entry level

02:30:08   Which is is

02:30:10   Problematic because the OS itself was has always been five six gigabytes

02:30:16   So as a percentage of free space the size of the OS mattered way more for 16. It's just

02:30:22   It's just almost impossible for even a typical consumer to keep everything in 16 gigabytes

02:30:27   And they kept it for too long and at the point where I really felt like hey

02:30:31   This is you know I was even bringing it up. It was something

02:30:34   I brought up. I think at least two years in a row with

02:30:36   Phil Schiller on the talk show live at WWDC and I felt like when they finally upped the base

02:30:43   Storage to 32 was when it was at the point where I really couldn't I I couldn't agree that this was even

02:30:50   morally

02:30:52   Acceptable, you know that this is just criminal to charge people because the app part of the Apple brand is you can't go wrong with

02:30:58   Apple product right you come in the Apple store and

02:31:01   Everything did part of the brand is part of the way that the you know

02:31:04   the company's supposed to be.

02:31:05   We're not gonna sell you something

02:31:06   that's actually a bad product.

02:31:08   Like the lowest model of anything is still a good product.

02:31:12   That's why the 999 MacBook Air is starting to, you know,

02:31:18   starting to raise eyebrows, right?

02:31:20   Like is that, is it really justifiable to charge $1,000

02:31:24   for the MacBook Air as we know it

02:31:26   with the non-retina screen and CPU that came out in 1983?

02:31:34   It's questionable.

02:31:35   16 gigabyte iPhones were like that.

02:31:37   And to me, the five gigabyte iCloud storage

02:31:40   is maybe even worse because of how much more important

02:31:43   backups are than anything else,

02:31:46   and how many people there are.

02:31:48   And it doesn't make sense.

02:31:50   It comes back to, you and I were just talking about this

02:31:52   earlier in the show, that people aren't entirely rational

02:31:55   in what they do, right?

02:31:56   That people will buy $700 iPhones happily,

02:32:01   or at least willingly, and then refuse to spend 99 cents

02:32:05   a month to increase their iCloud storage.

02:32:08   Whether it's irrational or whether it's the confusion,

02:32:13   you hear it all the time, you hear it all the time

02:32:15   when people talk about this where they'll have like,

02:32:17   their mom was having, or somebody else in their family,

02:32:19   is having, their dad's having a problem with his iPhone,

02:32:22   it's barking about something and then they take a look at it

02:32:26   and it's because the iCloud is full cycle.

02:32:28   I don't even know what an iCloud is.

02:32:29   Why the hell would I spend 99 cents a month for an iCloud?

02:32:32   I don't know what an iCloud is.

02:32:34   Even though that's exactly what would solve the problem

02:32:36   of their backups not being able to go to iCloud

02:32:38   because they ran out of storage.

02:32:40   They just won't do it.

02:32:41   It's not the 99 cents, it's just irrational.

02:32:44   But they won't do it.

02:32:44   So the free, that's really, this services thing,

02:32:49   I don't know.

02:32:51   - No, the whole thing is kind of stinky, right?

02:32:55   If you think about Apple's thing.

02:32:56   I mean, again, the 30%, again, it's Apple's right,

02:32:59   30% is lower than what CompUSA used to charge

02:33:02   to put software on the shelf,

02:33:03   and anyone can put this off there.

02:33:05   I'm not saying Apple is not in their rights to charge it,

02:33:09   but at the end of the day,

02:33:10   they are charging 30% for doing nothing

02:33:12   for all intents and purposes, right?

02:33:14   Like, it is a tax that they are in a position to charge,

02:33:19   and it is the basis, again, that this whole narrative,

02:33:23   and again, it's a legitimate narrative

02:33:25   that they're driving.

02:33:26   To me, that's a little concerning, that the growth story for this company is not about

02:33:33   being what's best for the consumer in some respects.

02:33:37   And again, I'm not saying that in an extreme hyperbolic sort of way, just pointing out

02:33:43   this is where things can go wrong.

02:33:46   This is where slippage can occur when you do lose sight of the customer.

02:33:50   Right.

02:33:51   Anywhere where Apple's alignment is off with what's good for the customer, given that the

02:33:56   money that they're happily willing to spend the money their exchange is bad.

02:33:59   And if they think they're making money by keeping the five gigabyte tier for free, because

02:34:05   X, 50% more people year over year are willing to pay for something, some level of storage,

02:34:11   there are still untold millions of customers who are never going to pay a dollar for iCloud

02:34:19   storage who now have photos and videos that aren't getting backed up at all.

02:34:24   And that is worse for those customers than this extra couple of billion dollars is for

02:34:33   Apple as a company.

02:34:36   And I know that sounds, again, I always make the joke that this show specializes, should

02:34:40   be subtitled, "Spending Tim Cook's Money."

02:34:42   But I really do believe that, that it's just antithetical to Apple's brand to pinch every

02:34:50   penny or try to milk every dollar they can out of something.

02:34:52   It's just not them.

02:34:53   them. Well, there's our bad news. We've got to wrap up soon. This has been going on for

02:35:02   a while. Do you want to do something short on T-Mobile and Sprint merging? Which is really

02:35:07   an acquisition.

02:35:08   It is an acquisition, which is interesting because when they tried to do it a few years

02:35:12   ago, it was actually Sprint trying to buy T-Mobile. But it's probably hard to get into

02:35:18   in too much depth. I think you said it well on your post, and I wrote something similar

02:35:22   The real question here is, is this going from four carriers to three carriers, or is it

02:35:28   actually going from two carriers to three carriers?

02:35:31   And I think it depends on your perspective.

02:35:34   If you look backwards, there's no question T-Mobile really shook up the industry.

02:35:39   They did cause everyone to lower prices.

02:35:41   They undid the phone subsidy issue.

02:35:46   And they made a big difference, and it's a great example of how competition was a great

02:35:50   thing.

02:35:51   The real challenge, I think, is 5G, because just transitions are expensive in general,

02:35:55   and 5G is going to be way more expensive than any other transition because a core piece

02:36:00   of 5G is using what's called millimeter wave spectrum, which has way more bandwidth but

02:36:05   can travel a far shorter distance.

02:36:07   And so what's going to happen is instead of having big cell towers that reach out many

02:36:11   miles, there's going to be antennas everywhere.

02:36:15   Think about every utility pole in an urban area is going to have antennas on it for 5G.

02:36:20   And that's going to be so much more expensive and hard to build out that both T-Mobile and

02:36:24   Sprint are just at a massive, massive, massive disadvantage relative to Verizon and AT&T.

02:36:30   And it's going to be really hard to see them competing in any meaningful way in 5G if they're

02:36:36   not combined.

02:36:38   So I'm leaning towards thinking it should be allowed, but I can very much respect the

02:36:42   argument that it shouldn't and T-Mobile being evidence of that.

02:36:46   Yeah.

02:36:47   And I think, and I've been impressed with T-Mobile.

02:36:49   T-Mobile is the company where I,

02:36:51   that's where my secondary, I'm on Verizon,

02:36:53   we have a Verizon family plan for our iPhones,

02:36:55   but I have a T-Mobile, a $50 a month T-Mobile account

02:36:59   that I use for either secondary iPhones

02:37:02   or I usually keep it in my whatever Android phone is my,

02:37:06   let's see what's going on with Android at the time.

02:37:08   And the service is great, it really is.

02:37:13   It's really, at least in places I go,

02:37:18   especially in Philadelphia, coverage is fine.

02:37:20   It's very comparable to Verizon, and it really is.

02:37:23   It's just 50 bucks a month.

02:37:25   It is literally 50, I guess I pay tax,

02:37:28   but there's no, my Verizon bill, you look at the detail,

02:37:32   I hardly ever look at it, but I mean,

02:37:33   I just pay the goddamn thing, but it is,

02:37:35   it's six pages long of courtesy charges.

02:37:40   - Yep.

02:37:43   I'm from a smaller town in Wisconsin,

02:37:47   So T-Mobile is a bit more challenging.

02:37:49   I learned my lesson a while ago.

02:37:51   But I mean, the issue is that, to your point,

02:37:56   like the United States, it's a fixed size.

02:37:59   And the number of large cities are a fixed amount, which

02:38:02   means to have equivalent coverage,

02:38:04   you have to spend the same amount of money.

02:38:06   But if you have half as many subscribers,

02:38:08   or in the case of Sprint, like a third as many subscribers,

02:38:12   that means you have to charge every subscriber 3x more,

02:38:15   or 2x more to even break even.

02:38:18   And yeah, so I think they had a good run,

02:38:22   but man, 5G is gonna be, I think,

02:38:24   a tough transition for both of them if they're not.

02:38:26   - Yeah, and I still think that T-Mobile,

02:38:31   even as good a run that they've had,

02:38:34   and I think, what's his last name, Laguerre,

02:38:36   John Laguerre, is that how you pronounce it?

02:38:37   - Yeah, John Laguerre.

02:38:38   - I think he's been a great,

02:38:39   I'm not sure how to pronounce it.

02:38:40   I think he's been a great CEO.

02:38:42   I met him once.

02:38:44   out in San Francisco for an Apple event and T-Mobile was having a small event and somehow

02:38:49   I got invited. And since I was already there, I just had to walk like three blocks I went.

02:38:54   You know, it's not like I talked to him for a long time or anything, but I mean, it just

02:38:59   seems like an interesting charismatic guy and I think what he's done with T-Mobile is

02:39:04   really, really interesting. Because like you said, a couple of years ago it looked like

02:39:06   maybe Sprint would buy T-Mobile and now it's clearly the other way around. He's staying

02:39:10   as the CEO, the brand of the whole company is nothing, it's T-Mobile is eating Sprint,

02:39:15   Sprint's going away, but that they're getting, you know, Sprint's infrastructure and stuff

02:39:19   like that. I really do. I think ultimately, it was always sort of like, there were two

02:39:24   A carriers in America, the duopoly of AT&T and Verizon. T-Mobile elevated itself to like

02:39:31   a second tier B carrier, maybe even a B plus carrier. And then Sprint has sort of fallen

02:39:37   into being like a C carrier, right?

02:39:39   And I feel like maybe T-Mobile and Sprint combined could be like an A-.

02:39:46   It could be a little bit more of a serious third competitor.

02:39:50   I really think that that's better for the market.

02:39:52   I hope for that.

02:39:53   Yeah.

02:39:54   I mean, the other thing is, even with all T-Mobile's success, Verizon and AT&T's share

02:39:58   of the market has decreased by 0.5%.

02:40:02   So basically T-Mobile's, all their growth has been taken from Sprint.

02:40:06   So it's like they've never broken into the AT&T and Verizon

02:40:10   market.

02:40:11   Again, they showed the market such that AT&T and Verizon

02:40:14   did drive down prices.

02:40:17   So there is-- I'm not denying that in the slightest.

02:40:21   But the other thing is-- and there's lots of details.

02:40:23   Like Sprint actually owns all this spectrum

02:40:26   that is very useful for 5G.

02:40:30   So that's a huge thing for T-Mobile to get a piece of that.

02:40:35   And yeah, I mean, the other thing is,

02:40:37   if you look at other countries, it's very,

02:40:40   part of the reason the US mobile market

02:40:41   is so expensive and messed up is,

02:40:42   we almost had too much competition,

02:40:44   and no one, not enough carriers could get at scale.

02:40:47   And there's been sort of a long-term roll-up,

02:40:49   which seems bad, but I mean, you look at like,

02:40:52   SoftBank for example, SoftBank was, is in Japan,

02:40:55   it was a third place carrier.

02:40:57   They were willing to give in to Apple's demands

02:41:00   and take the iPhone when Docomo and the other,

02:41:02   I can't remember their carrier, wouldn't.

02:41:04   and they shook up the entire market,

02:41:06   and they shook it up when there were only three carriers.

02:41:09   Right, I mean it's not like three means no competition.

02:41:12   Particularly in a purely commodity sort of market.

02:41:16   Like at the end of the day,

02:41:17   like cell service is cell service.

02:41:18   And thanks to Apple, Apple has really broken up

02:41:20   that market to being just a commodity.

02:41:23   And if it's just a commodity,

02:41:25   three could certainly be sufficient

02:41:28   to have a competitive market more so than two.

02:41:32   And so if you really do think 5G's gonna be that hard of a transition, then that's probably

02:41:37   the strongest argument in favor of the merger.

02:41:39   Yep.

02:41:40   All right.

02:41:41   Anything else you wanted to talk about?

02:41:42   Oh, I guess we should talk.

02:41:43   I know.

02:41:44   I had a big scoop this week on "Daring Fireball" about the marzipan thing.

02:41:49   Oh, that's what everyone's probably listening to this podcast.

02:41:53   Yeah, probably everybody's listening.

02:41:54   Well, I appreciate it.

02:41:55   I said everything I know about it, so I guess we should acknowledge it.

02:41:59   But...

02:42:00   No, I have one thing to add.

02:42:01   So, we were in a slot group where we were kind of hacking out some of these details.

02:42:08   And it's interesting, I guess maybe I thought this many years ago that Apple would reset

02:42:15   expectations by leaking to you.

02:42:18   And that clearly did not happen.

02:42:20   I saw you kind of working this out over quite a while, whether this existed or didn't exist.

02:42:27   And I don't know, I know people are never going to actually listen and believe that's

02:42:30   not the case, but I will attest on your side that Apple's not like feeding you PR snippets.

02:42:37   And I think you mentioned this, why would they? Because it'd basically be a giveaway.

02:42:41   What's the warrant canary or something like that?

02:42:43   Yeah. Yeah. So the accusation, and I don't like tons of people doing it, but there's

02:42:47   a couple, and maybe a lot of people are thinking it, is that, okay, Mark Gurman comes out with

02:42:52   the story in December that says Apple has a secret project called Marzipan to get, to

02:43:02   make it easier to write apps that, universal apps that run on iPhones, iPads, and Macs.

02:43:08   You make one app, it runs on all three.

02:43:10   I wrote about it back then that it's, that sounds great on the surface and I can see

02:43:13   why people hear that and think, well that sounds great, that would mean more apps and

02:43:17   less work for developers and blah, blah, blah.

02:43:19   But when you really look at the details, I'm not going to go into it here.

02:43:21   I have an article, I've read about it, but having a system like the Mac where you have

02:43:25   multiple windows and a menu bar and a mouse pointer and you don't have a touchscreen is,

02:43:31   and all sorts of features in a Mac OS that iOS doesn't have and shouldn't have, you know,

02:43:38   it's complicated.

02:43:40   But let's say everybody's excited about it and Germin said it might be coming as early

02:43:44   as this year at WWDC.

02:43:46   So a lot of people are excited about this, but technically, Gherman's ... at a technical

02:43:51   level what he reported is pretty vague.

02:43:55   And as I wrote in my piece this week-

02:43:57   And it was vague on the date too.

02:43:58   He said it could come this year.

02:43:59   Well, he always covers his ass like that.

02:44:01   He was clear.

02:44:02   He wasn't ... No, but it was more than a, of course, apple which is your plan.

02:44:06   It was embedded in the rumor itself was, "This is very fuzzy in my-

02:44:11   Yeah, that's fair to say.

02:44:12   Gherman didn't really push the this year thing.

02:44:15   but everybody who's excited about it and who has, you know,

02:44:19   hopes that this is true and that wants, you know,

02:44:23   awful lot, for example,

02:44:25   there's just an awful lot of developers who write iOS code

02:44:28   and the main framework for the UI in iOS is called UIKit.

02:44:32   And the main framework for that on the Mac

02:44:36   that dates back to the next era in 1989 is called AppKit.

02:44:40   AppKit and UIKit sort of serve the same roles,

02:44:43   but UIKit, because it came out in 2007,

02:44:47   is sort of like, what would we do,

02:44:49   with a decade more of experience,

02:44:51   what would we do differently?

02:44:53   And UIKit reflects that, and there's a lot of things

02:44:55   in UIKit that are nicer or more convenient

02:44:58   or easier than AppKit.

02:44:59   And there's a lot of programmers who, rightly or wrongly,

02:45:05   would like UIKit on the Mac instead of AppKit

02:45:08   or as an alternative to AppKit, et cetera.

02:45:09   And so people are reading into this

02:45:11   and they're hoping it's coming,

02:45:12   and now they're all hyped up.

02:45:14   And then I write this article that says,

02:45:17   well, I've looked into this,

02:45:19   and A, nobody who I've spoken to

02:45:23   has ever heard of the name Marzipan,

02:45:25   except from Germin's story,

02:45:27   which I'm not insinuating means that Germin is wrong

02:45:29   and that that's not a real project.

02:45:31   It could be, it could, you know, it certainly could be.

02:45:34   I'm just saying--

02:45:37   - But if it was launching in two months,

02:45:40   some people would have heard of it.

02:45:40   - Right, it is not launching in two months,

02:45:43   or if it is, they've kept it secret

02:45:45   in a way that seems impossible,

02:45:47   given the way Apple works internally, software engineering.

02:45:50   But I don't-- - Well, not just that,

02:45:51   but a feature like this would be so,

02:45:54   I mean, probably the caveat is Swift,

02:45:56   but the thing with Swift is that was a new-to-the-world thing

02:46:00   that didn't really impact the old stuff,

02:46:02   whereas it seems like this would be,

02:46:05   it's gonna touch so many things within the company

02:46:07   that it's not like you can just surprise everyone.

02:46:11   - I think so.

02:46:12   I guess--

02:46:14   - But Swift is the counter example, right?

02:46:16   No one saw Swift coming.

02:46:17   - Nobody, it was a very small number of people

02:46:19   and very small number of people within Apple

02:46:22   who knew about it before the keynote.

02:46:24   But I've heard of a different project

02:46:29   with a different code name and one of the things

02:46:34   people are saying now that there's this story

02:46:35   that came out about Apple having these,

02:46:37   Identified all these people who leaked a lot of people have said to me well

02:46:40   Maybe some people were told marzipan and some people were told this other name and some people were told another name

02:46:45   And then when the name marzipan came out they knew it came from this group because that's what they were told the name is

02:46:49   I've nobody at Apple who I ever spoken to has ever heard of a single project having multiple code names for that reason they might

02:46:57   It defeats the purpose of a code

02:46:59   It does it totally does the reason I have a code name is to communicate is to talk about the project right the UI

02:47:05   project I've heard of, which I described in my article, it's a declarative UI framework

02:47:11   where it's just a different way to make a UI, and it is cross-platform for iOS and Mac,

02:47:20   and I believe now it's also Watch, and maybe even TV, but definitely Watch, has a different

02:47:29   code name, which I don't want to reveal, because it hasn't leaked.

02:47:34   But it's not coming at WWDC.

02:47:37   So the thing I know about is not coming at WWDC this year.

02:47:41   Is there possibly a different thing that has some kind of run iPhone apps on Mac, and it

02:47:47   is called Marsapan, and I just don't know anybody who's ever heard of it, and it's not

02:47:52   anywhere listed in radar internally in Apple possible.

02:47:58   but I think if that were coming this year,

02:48:02   I would have people who know about it.

02:48:03   So I don't think that's coming at WWDC this year either.

02:48:06   And so the speculation, like what you're alluding to,

02:48:09   is okay, Apple sees that there's lots of people

02:48:11   who think something big and exciting along this line

02:48:14   is coming next month.

02:48:16   They don't want people to be disappointed

02:48:19   when the keynote comes and goes and it doesn't appear.

02:48:23   So somebody from Apple PR picks up the phone, calls me,

02:48:28   and lets me know that I can't say that Apple PR told me this, but I, you know,

02:48:32   you know, maybe I would want to dampen expectations or something like that.

02:48:36   It seems like a lot of people think that's what happened, and that is not

02:48:40   what happened at all, and has never actually happened. I do have contact with

02:48:44   Apple PR on a regular basis. Sometimes I contact them to ask questions. Sometimes

02:48:49   they come to me with information. But I've been thinking about it the last few

02:48:53   days. To my recollection in my entire history of interaction with Apple PR, I

02:48:57   I don't think I've ever been contacted by Apple PR regarding a rumor.

02:49:02   Even something that, you know, like this, where if the rumor doesn't pan out, people

02:49:08   are going to be disappointed.

02:49:09   And like you said, it's like the warrant canary.

02:49:12   I think the reason they don't do that is if they started reaching out to me or anyone

02:49:17   else to dampen expectations for false rumors, or let's say, maybe not even false, but like

02:49:24   like a true rumor whose deadline has come and gone,

02:49:27   you know, is going to slip.

02:49:28   If they start doing that, then when they don't do it,

02:49:32   like a rumor that X is coming at WWDC

02:49:35   and they don't dampen the expectations,

02:49:37   well then it just sort of verifies in advance

02:49:38   that that's true.

02:49:40   So they don't do that.

02:49:42   Everything I found out about this project was through,

02:49:47   as I call them, ground level sources, engineers,

02:49:52   I guess in this case, all engineers working throughout Apple.

02:49:55   I laugh, but it's, you know,

02:50:00   I guess it's not a most unreasonable theory.

02:50:02   And the funny thing is I get accused of this,

02:50:04   you know, multiple times.

02:50:05   Not even accusation, but I guess just the idea

02:50:08   that this stuff is spoon-fed.

02:50:09   And then I'll say sometimes,

02:50:11   I'll publicly, like I am right now on this podcast,

02:50:14   but I'll say it on Twitter, that no,

02:50:15   my sources for this are all ground level.

02:50:17   These are engineers or designers or something like that.

02:50:19   And then the people who cannot be shaken from this,

02:50:21   like the conspiracy theory that Apple PR just funnels stuff through me and I just put it

02:50:28   out there. They say, "Well, who do you think told them to tell you? Apple PR." And it's

02:50:34   like, no, that is definitely not how it works. Apple PR doesn't go... Just imagine...

02:50:40   Apple PR doesn't trust Apple employees as far as they can throw at them. They're not

02:50:44   going to trust them to pass on messages to journalists.

02:50:47   No, but think about this.

02:50:48   Think about if you're an engineer working on UIKit,

02:50:51   and you're cracking away on something for iOS 12, right?

02:50:58   And deadline's coming up.

02:50:59   You're working hard.

02:51:00   And someone from Apple PR comes by your office.

02:51:03   Knock, knock.

02:51:04   Hey, Ben.

02:51:06   Hey.

02:51:08   Here's what we'd like you to do.

02:51:09   Reach out to John Gruber and let him know that--

02:51:12   In a way that we can't control and can't trace.

02:51:15   and let them know that, yeah, you see that thing

02:51:18   about this quote unquote marzipan thing?

02:51:20   You know that, yeah.

02:51:21   Tell them that's not happening in June.

02:51:23   No, they would just, if they were going to do it,

02:51:28   they would literally just call me and talk to me,

02:51:31   but that's never happened, and for good reason.

02:51:34   The only sane way for them to deal with rumors

02:51:38   is to never acknowledge them in any way,

02:51:41   no matter how false.

02:51:42   I mean, I--

02:51:44   I think they do via like the Wall Street Journal, right? What was that big one a few years ago?

02:51:49   The one that I remember was the

02:51:51   999 dollar starting price for the original iPad. Oh, that's right because it was in the opposite direction. They actually spread a false rumor

02:51:58   That's what we think. That's no I've never heard anybody say what happened

02:52:03   I'd love to know I don't remember the byline on that story and who got it

02:52:06   It was it was Kane wasn't I think it might have been

02:52:12   I think it might have been I didn't want I didn't want to butcher right

02:52:15   Times I don't know that that's ever happened either, but the times when

02:52:20   Like I think it they might have Apple PR might have strategically at them from the highest executive levels of the company

02:52:29   Strategically leaked something they every time I think it might have happened it has always and only ever been to

02:52:37   straight reporters on

02:52:41   the Apple beat at

02:52:44   major news

02:52:47   organizations generally only the New York Times and Wall Street Journal

02:52:50   That they'll they they will give something. You know, it seems like sometimes they might give something like a

02:52:57   expectation setting

02:53:00   Sources familiar with the matter leak but what I mean by straight reporter is somebody who doesn't write like I do like as a

02:53:08   Under you know with like a columnist with a voice and opinion

02:53:12   Somebody who's just a straight front of the newspaper front page of the newspaper reporter

02:53:18   You know who writes in that sort of objective?

02:53:22   from that objective perspective as a reporter

02:53:25   That's the only time I think they'd ever they ever have might have ever done it and even then I'm not sure they ever have

02:53:33   Yeah, no, there's um, yeah, there's definitely been ones where they've they've tamped expectations down

02:53:39   But I think there was one about there being no new hardware at WWDC a couple years ago

02:53:44   That was in the Wall Street Journal or something like that

02:53:48   I don't know. I feel like they it has been done, but you're right

02:53:52   It's like the vector is a very well established one, right? I think it is actually almost always the Wall Street Journal

02:53:59   I don't even remember there being one the New York Times

02:54:00   I think it's it's the Wall Street Journal will report something Apple's gonna happen

02:54:04   It's like two weeks before an event and it's managing expectations and even the even the no new hardware at WWDC isn't

02:54:11   Necessarily regarding any specific rumor, you know, it's just setting expectations overall

02:54:17   You know, right the one I remember that didn't happen and it was a like a warrant canary was the original iPhone

02:54:27   in January 2007 because what had leaked was just period Apple is building a

02:54:34   Phone right and you know how it leaked it leaked from the goddamn carriers who Apple had to talk to

02:54:41   And you know with good reason, you know

02:54:44   It proved to be good reason why Apple didn't show them the iPhone because they would have fucking blabbed about that, too

02:54:50   But the fact that Apple was building a phone

02:54:53   Wasn't quite knowledge, but it was you know everybody believed it was true and everybody everyone was everyone was expecting a phone that day

02:55:01   Yeah, and everybody

02:55:02   Yeah, everybody was expecting a phone that day, and I remember getting there so Macworld Expo started on I think it started on a Monday

02:55:10   but whatever the day before it was I got to San Francisco and

02:55:13   I was walking down Market Street, and I saw James Duncan Davidson

02:55:22   outside a coffee shop and I knew and I is a and we sat down and we were talking about it and we were like

02:55:27   We didn't have fun

02:55:30   It's so funny

02:55:31   We didn't have phones to check but we were talking about how we kept like reloading news sites to see if anything came out

02:55:36   Like to say hey

02:55:37   There's not gonna be a phone tomorrow because it was so rampant that Apple was going to the belief that Apple was going to announce

02:55:43   a phone that nobody knew anything about

02:55:47   And the fact that nobody, not the Wall Street Journal,

02:55:50   not the, nobody had any kind of thing that said otherwise.

02:55:54   It was like, I think this is definitely going to happen.

02:55:57   I remember talking with Duncan about it.

02:55:58   We were like, we talked to ourselves.

02:56:00   We started drinking coffee thinking like,

02:56:03   they're not gonna do a phone.

02:56:04   And by the end of it,

02:56:06   just the fact that they hadn't refuted it

02:56:09   or tamped expectations that there'd be a phone,

02:56:11   that Apple was dead silent on or off the record

02:56:15   about the phone, a phone, we were convinced

02:56:18   by the end of the conversation,

02:56:20   we were willing to bet money that there was

02:56:21   some kind of phone, probably an iPod phone,

02:56:24   coming out the next day.

02:56:25   - Yeah, and if you think about the presentation,

02:56:29   Jobs really leveraged that fact

02:56:31   that everyone was expecting a phone, right?

02:56:33   That's why the, we're announcing three products today

02:56:37   was so effective, and he gets it the right way,

02:56:39   today's gonna be a momentous day,

02:56:40   everyone's like, oh, it's gonna be a phone.

02:56:42   We're announcing three products,

02:56:43   there are it's gonna be a phone and what else but like he so he built that

02:56:47   presentation knowing that everyone knew they were announcing a phone yeah yeah

02:56:52   which is part of what made the presentations you know so brilliant

02:56:55   right it was a widescreen video iPod a breakthrough internet communication

02:57:04   device and yeah and a revolutionary internet community and a revolutionary

02:57:07   phone right yeah it was something like that yeah it was a widescreen video

02:57:13   player and breakthrough breakthrough internet communication device and a

02:57:18   revolutionary phone yep and I bought it the best part no one no one cheered for

02:57:25   the revolutionary internet community now or the breakthrough now you together I

02:57:28   was like yeah it is cheer cheer oh yeah I remember thinking I remember thinking

02:57:33   that part that I remember changes the way I remember thinking in the audience

02:57:35   it's like, what the hell are they talking about with that?

02:57:37   Like, I got it.

02:57:38   Like, the two of the three I got,

02:57:40   I was like, okay, widescreen video iPod.

02:57:42   Yeah, because the iPods that played video at the time

02:57:43   didn't have big enough screens.

02:57:44   So I was like, oh, I bet the whole thing will be a screen.

02:57:47   Like, when he said that, I really did think,

02:57:50   like, something roughly like what the iPhone form factor was

02:57:53   but I just thought, you know,

02:57:54   I didn't think it would be a touchscreen.

02:57:56   I just figured they just used the whole thing, you know,

02:57:59   have like little buttons at the bottom for play/pause

02:58:01   and, you know.

02:58:04   It's very funny.

02:58:05   But anyway, I did not, I don't think Apple,

02:58:08   I don't think Apple really gives two shits

02:58:09   what I write about the marzipan thing, honestly.

02:58:12   Because it's-- - Well, all along,

02:58:16   go ahead. - Well, the other thing

02:58:18   to keep in mind is that,

02:58:20   and I mean that sincerely, I know I'm saying

02:58:24   that Apple PR doesn't care what I write about.

02:58:26   I think they do.

02:58:27   I think, you know, I'm not trying to brag.

02:58:29   I'm actually, you know, I'm just trying

02:58:30   to acknowledge the obvious, that I'm,

02:58:33   what I write is influential about Apple.

02:58:35   But on this marzipan thing in particular,

02:58:37   it's too easy for us and the people who listen to the show

02:58:40   to get caught up thinking about what we care

02:58:45   about a cross-platform UI layer

02:58:47   that would bridge iOS to Mac.

02:58:50   Like, people listening to the show, we care about that.

02:58:53   That's big news.

02:58:54   There might be a lot of people listening to the show

02:58:55   who are gonna be disappointed

02:58:57   if what I wrote this week is correct

02:58:58   and WWDC comes and goes and that doesn't get announced.

02:59:01   But in terms of like the real world, that's what I just said was gibberish, right?

02:59:06   99% of all people who own an iPhone have no idea what the hell a cross-platform UI layer

02:59:12   between UIKit and AppKit is.

02:59:15   No idea.

02:59:16   They don't care.

02:59:17   I've just started speaking Greek to them.

02:59:19   So the type of rumors that Apple really cares about are the type of things that actually

02:59:24   affect 99% of people, the type of thing that would get on the front page of newspapers

02:59:30   the next day, right?

02:59:32   Let's say--

02:59:33   - Well, one could say that that's why this Marzipan rumor,

02:59:37   they would leak to you instead of the Wall Street Journal,

02:59:41   because the people that do care will read you.

02:59:43   So you might have just undone the case against yourself.

02:59:47   - We can't, there's no way to refuse,

02:59:49   no way to, you're right, there's no way to get out of this.

02:59:51   Well, all I can say is you have to take me at my word.

02:59:58   Well I do and as all long podcasts that are not only about Apple must do, we managed to

03:00:04   circle back to the Steve Jobs iPhone introduction keynote.

03:00:07   So I think we have accomplished our mission here.

03:00:11   Thank you so much Ben.

03:00:13   It is always a pleasure to have you on the show.

03:00:15   I'm deeply disappointed that we can't get together and watch Sixers-Bucks playoff games

03:00:20   this year.

03:00:21   But I do have the- Hey, I told you if the Sixers go to the finals,

03:00:25   We are we are I've gotten to finals games the last two years

03:00:28   And if the Warriors make it I plan to make it a third and if the Sixers make it you've already said the Warriors are

03:00:34   Gonna win the whole thing so the Warriors will be there if they're playing the Sixers

03:00:37   I would be very hard to not go to see them play over at the

03:00:42   What do they call the place Oracle the Oracle Oracle arena the Oracle orifice

03:00:51   Everybody can find out more about your writing. I mean, I can't believe there's anybody listening who isn't already a subscriber

03:00:56   but it's Stratechery calm which has a we I should mention a

03:01:01   redesign a visual branding redesign of new website a new logo

03:01:06   that is launched in between the time you were last on this show and

03:01:11   Now I cannot let it go without complimenting you on an excellent excellent

03:01:17   redesign that I enjoy every single day.

03:01:19   I think about it every single day

03:01:21   when I look at the newsletter in my email,

03:01:23   and I think, damn, that looks good.

03:01:26   Well, thank you.

03:01:27   And credit to Brad Ellis, who made the logo mark.

03:01:30   But yeah, not just the redesign, but also if you go there,

03:01:32   you can now-- much easier way to get access to the archives.

03:01:35   Search is dramatically enhanced.

03:01:36   And then being able to browse the site,

03:01:40   organize by concept or company or topic.

03:01:43   That was really the-- the ultimate goal

03:01:45   was to get the access to what I've written before easier and whatnot.

03:01:51   But because humans are humans and we care about visual things, adding on a new logo

03:01:55   made it all look nice.

03:01:56   Yeah, I even like the way, and at first I didn't like it, but I like the way on the

03:02:00   homepage now where the, it's like the subscriber's daily update, the most recent four are all

03:02:06   at the top.

03:02:07   And it is, it's sort of like, I like it.

03:02:11   I didn't like it at first.

03:02:12   I thought, ah, the new article should be the first thing on the page.

03:02:15   But I like this because it fits in with the idea of, it's like respect for a subscriber

03:02:20   who's not a daily reader.

03:02:21   Like you're a subscriber, you're going to read it at least every week, but here, if

03:02:24   you want to just catch up, click, click, click, you could open these four things in tabs and

03:02:28   there they are.

03:02:29   Well, the other thing that I do that if you go to a single article, like you follow link

03:02:35   on Twitter, you'll notice that those articles are not on the top.

03:02:39   Now they're at the very bottom of the page.

03:02:41   And the reason is if you're following a link to an article, you probably want to read the

03:02:44   So I want to get the other crap out of your way and then when you to the end and you know

03:02:48   I don't really push this subscription at all. It's I mean, but it like it's there

03:02:53   But I'm not gonna like shove it in your face right and and I you know

03:02:58   I ideally you read the free articles regularly and then eventually you're tempted to give the

03:03:03   The for pay stuff a try and then I got I got a month to hook you

03:03:07   it's

03:03:08   as good as ever and it's been it's been a particularly good week in my opinion with the

03:03:13   the stuff on Amazon and Apple and etc. and so forth. So thanks. And then you've also

03:03:18   got if the people enjoy the sound of your voice, you've got your regular podcast.

03:03:22   Exponent. Exponent.fm. With your co-host. James Alward. Have you moved the talk show to,

03:03:32   oh you're hosted on your own site so you already switched to HTTPS.

03:03:36   Yes. I need to switch Exponent to HTTPS. Yeah, that's like the only

03:03:43   There's more coming literally I'm in the midst I've actually broken the

03:03:48   Seal it's we're moving to a new server soon

03:03:52   But HTTPS was HTTPS for everything is probably the only modernization

03:03:58   I've done to during fireball in the last couple of years, but it is all it. Yeah, I

03:04:01   Watched with um yeah, I watched the GPS on trajectory

03:04:05   I mean which was a one it was just sort of best practice at the time, but - you know

03:04:09   I knew I wanted to monetize it at some point.

03:04:12   But the podcast, like, why bother?

03:04:14   But now this-- I think in Chrome,

03:04:16   or at least the newest version, Google's turned on the,

03:04:20   this site is dangerous, which is a little over the top.

03:04:23   But yeah.

03:04:24   Yeah, I don't like it.

03:04:25   I think it's a bad move on Google's part.

03:04:26   I don't really buy the argument that everything

03:04:31   should be HTTPS.

03:04:33   I don't think it hurts.

03:04:34   It's a perfect example.

03:04:36   There is no reason that that exponent needs to be HTTPS.

03:04:39   But, you know, and Daring Fireball is a reasonable example.

03:04:43   I don't have user accounts.

03:04:45   There's no, you know, it's still better that it's, you know,

03:04:49   it's better for some reasons, but it's not a big deal.

03:04:51   And for downloading a podcast, I mean, who gives a crap?

03:04:55   Honestly, I mean, but what do I know?

03:04:59   - Alas.

03:05:01   - Anyway, great job on the redesign.

03:05:05   Brad Ellis, a friend of mine too,

03:05:07   very talented designer and he really nailed it. I love the mark of the pen that's also

03:05:14   a circuit is so, it's, God, it's, that's really good. I think I told you this, I think I told

03:05:20   you this privately, but it's good enough that it makes me jealous.

03:05:23   Well, hey, well, I mean, you, you, you, you called your site Daring Fireball, I called

03:05:29   Mine for Checkeries, I think you're going to have brain bites till the end of the time.

03:05:33   So, all right, thanks Ben. Thank you so much for your time. I really appreciate it. Have

03:05:36   a good day.

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