The Talk Show

96: ‘The Edition Edition’ With Ben ‘Bengate’ Thompson


00:00:00   Think you were on about two months ago. I don't know. I'm trying to mix it up with guests, but I really really wanted you back

00:00:05   Now to talk about the watch

00:00:08   Well, needless to say I have a full range of opinions about it, right

00:00:13   And Renee and I last week just more or less

00:00:16   Skipped it because we already filled up two hours with just the iPhone and and etc. I

00:00:22   forget if I said this to Renee or if I put it in my review, but I

00:00:27   really do that I understand I think I put it my review but I understand why

00:00:31   Apple did it that way in terms of the event you know phone Apple pay and the

00:00:38   introduction of the watch all at once but it really to me gave short what's the

00:00:44   word shrift what's the word short short shrift to to the iPhone 6 to me and I

00:00:52   understand why they did it but boy and as a writer someone trying to get a

00:00:56   handle on all this it it was just impossible you know and you get you know

00:01:02   30 minutes 40 minutes after the event to talk to Apple reps and there was just no

00:01:06   way it always seems to go by fast and I always come up with questions good

00:01:11   questions as soon as I'm out of you know and the event is over but this time it

00:01:16   was just impossible it was like I did I really felt like there was no way to ask

00:01:20   all the quick because I wanted to I wanted an hour to talk about both things

00:01:23   things you know the phone and the watch

00:01:27   you think look at all the kind of bad news that the phone has gotten this week

00:01:33   and obviously it's an annual tradition that there's some sort of some sort of

00:01:38   gate you know every year Apple spotlight had a great post on this thing that

00:01:42   basically everyone comes down to people not understanding physics if you think

00:01:47   about it the phone never got the positive cycle in some ways yeah because

00:01:51   It was just the week where everyone's talking about the phone was drowned out by everyone talking about the watch

00:01:56   And but it still got the negative cycle. I don't think it's gonna hurt

00:01:59   I don't think it's gonna hurt it really but it's interesting that the whole cycle has been kind of

00:02:04   Upset a little bit

00:02:06   Yeah, I definitely think so and you know, it's you know, I guess we're coming up on

00:02:12   Three weeks since the event. I

00:02:17   Think so. Yeah, it'll be three weeks come Tuesday. So, you know, it just still feels like that iPhone

00:02:24   yeah, just never got the

00:02:26   the positive

00:02:28   Part everybody was so, you know into the pay and the watch in the first week

00:02:33   Then there were just a few days, you know that that brief period between when the review

00:02:38   Embargo is over and then when they have people actually get their hands on their phones, you know Friday morning

00:02:46   And then that was it you know

00:02:48   Yeah, it's interesting. I mean I

00:02:51   obviously

00:02:53   Well, we should talk about it more the whole

00:02:55   iPhone and watch being together because I thought pre event it made a lot of sense

00:03:02   Because I went into the event looking for the watch to be more of a phone

00:03:07   Accessory and that was some of my criticism of the event was that it the way it was presented

00:03:11   It wasn't really an accessory it needed it, but it but it wasn't

00:03:15   But if that's the case, then maybe they didn't need to necessarily be presented together

00:03:20   so I there's that it's actually really interesting to think about the the kind of the the optics perspective of how they

00:03:29   introduced both products

00:03:31   They didn't need to be introduced together and part of why they didn't need to be is that the watch?

00:03:37   Does work with I think all the way back to the 4s or at least to the iPhone 5 maybe it's just iPhone 5 but

00:03:44   You know at least two two years of existing iPhones

00:03:48   You know I think Tim Cook said there's at least a hundred million people out there that already

00:03:53   Even before the iPhone 6 hit already owned an iPhone that's compatible with the watch

00:03:58   So they didn't need to like I think maybe if you know

00:04:04   There's a story that came out this week that from the information that you know that Apple had been hoping to actually have the watch

00:04:12   on sale this year

00:04:14   Rather than just announcing it and and hoping that it comes out early next year

00:04:19   What they said they'd be lucky if it came out by Valentine's Day

00:04:22   Which is interesting but not surprising to me

00:04:26   I mean, of course, they would rather have it come out sooner rather than later, you know

00:04:30   And like everything in all of us do most things end up taking longer than we had hoped

00:04:36   Yeah, this is where we note that

00:04:39   well we're running an hour late which which is fine because I'm a writer too

00:04:43   so I can appreciate you know you just need to wrap it up but then I realized

00:04:46   it's about Derek Jeter and I was much more conflicted in my in my emotions oh

00:04:52   that that was the holdup waiting to start the podcast yes which is fine

00:04:57   actually I appreciate Jeter and all that went down until you wrote in the article

00:05:01   that uh it's been so long since the Yankees won and meanwhile I'm sitting

00:05:05   here as a Milwaukee Brewers fan we've never won anything and the just silent

00:05:09   silently resenting you.

00:05:10   - Yeah, they really crapped out this year too.

00:05:12   - Oh, it's so brutal.

00:05:14   - Weren't they, they were like 20 games over 500 at one point.

00:05:17   - I don't know, I don't know if it was that many,

00:05:19   but they, I mean, they had like a 10 game lead

00:05:21   in their division or something.

00:05:22   Yeah, it's, it's, it's, it's, it's the Brewers.

00:05:26   - Yeah, let's not talk about them.

00:05:28   (laughing)

00:05:30   But I do think it helped though.

00:05:33   And that's why, you know, I even said last week with Renee,

00:05:35   it's why a month prior in August that I sort of hinted

00:05:39   that I thought the watch would be announced

00:05:42   in the September event is that it's combined with the fact

00:05:45   that they do kind of go along with each other.

00:05:48   And if they were gonna talk about like health kit

00:05:51   and the M8 thing on the phone and fitness tracking,

00:05:56   they certainly are companions, siblings in that regard,

00:06:02   that the information that's gonna fill up the health app

00:06:07   is gonna come from those two sources,

00:06:10   gonna come from the phones, gonna come from the watch

00:06:11   if you buy the watch.

00:06:12   But it's also to me about how you set up the next event,

00:06:18   which I expect sometime in October,

00:06:23   as per the previous three years,

00:06:25   where they'll do new iPads

00:06:28   and give Yosemite a proper public unveiling.

00:06:33   - Right, and it would have definitely made

00:06:36   in less less sense there as you've noted. I guess what's the more the thing is is like

00:06:45   I mean so I've I've have an evolved position on the on the watch. I was initially quite

00:06:51   critical thought I should be much more focused and limited. Now I think it's much more ambitious

00:06:56   than I at first realized. And not only that I think that's probably the right move to

00:07:00   establish the category which I'm sure we can get into in a little bit. But but the fact

00:07:05   that it was introduced with the phone only reinforced the sense that it's a companion

00:07:12   for the phone, but the event itself presented it that it wasn't.

00:07:16   And so there ended up being actually, I think, more cognitive dissonance than had it been

00:07:22   at a separate event.

00:07:23   Maybe it would have been awkward at another time, but here it was just kind of strange.

00:07:28   And I think it muddied the message that I think they were sending.

00:07:32   Yeah, I think so too.

00:07:34   And I'm not sure whether that's a mistake or not.

00:07:37   I feel like we have to wait and see how this plays out

00:07:40   and it may not hurt them at all.

00:07:43   But I do think it was, as the time goes by,

00:07:47   and I wanna talk about this because I think

00:07:50   it's been an interesting three weeks

00:07:51   where no new information has actually come out, right?

00:07:54   I mean, we don't have any more information

00:07:57   than what Apple told us and published on Apple.com

00:08:00   on Tuesday, September 9th.

00:08:02   But I feel like a lot of us have...

00:08:05   Our understanding and expectations for the watch

00:08:11   have changed significantly.

00:08:13   Yours publicly, from what you wrote initially

00:08:16   to what you've published this week.

00:08:17   And mine too even, even since from what I wrote

00:08:22   a week after the event.

00:08:23   And I was listening to, I know there's another one

00:08:27   that just came out today before, I didn't get to listen to,

00:08:30   I was listening to the last week's episode of ATP and I thought that if you know

00:08:36   I'd assume that most people who listen to this show or there's a large overlap between the audiences

00:08:42   But if you you know are only an occasional ATP listener episode 83

00:08:46   Was a really good one for the watch because it was to me. It was ATP at its best where the the three of them

00:08:54   Were not in agreement and then in a lot of ways no no two of them were in agreement on a lot of the issues

00:09:01   surrounding the watch right

00:09:03   Which I you know made for a great discussion and they they

00:09:07   worked their way into and out of a whole bunch of the problems surrounding the watch and

00:09:13   And their understanding of it

00:09:15   So that was a good one and there's a couple of points. I thought of listening to it

00:09:19   Just that I want to talk to you about

00:09:21   No, I agree. It was a great one. Um

00:09:24   Especially Totally Inside Baseball when Casey took on Marco was the highlight.

00:09:31   Yeah, that was the irony of it. Of the three, the one who I agreed with the most was Casey.

00:09:36   I think Casey got it in a way that I feel like the other two didn't.

00:09:42   Yeah, no, I agree. Basically Marco was saying, "How could you make an expensive item?"

00:09:48   item and Casey pointed out that Marco drives a custom imported M5, which I think is spot

00:09:55   on. I know both you and I have gone back to the car analogy on multiple occasions just

00:10:02   because it's such a great one. It makes so much sense. There is no "reason" for a BMW

00:10:11   to exist. There's no reason to drive an M5 on US highways. But people do it and they

00:10:17   do it because it's giving them benefits beyond the technology underneath it. It's more about

00:10:25   utility. It's funny, I just mentioned the Jeter thing. I would imagine this is your

00:10:29   argument for why people like Keith Olbermann are wrong to criticize Jeter just on stats.

00:10:34   I would, when you put words in your mouth, there's a contention that there's more going

00:10:38   on here than just what you can count with numbers. It's absolutely the same sort of

00:10:43   thing with any product, but particularly with something that you're wearing, that you're

00:10:48   displaying to the world. There's so much more that goes into it than the actual technical

00:10:52   utility of what it does or what it does not do.

00:10:56   This is such a classic talk show because it keeps coming back to Jeter and the Yankees.

00:11:00   But I do. We have so much to watch to talk about. I know that there's a bunch of you

00:11:05   out there who listen to who and the sports stuff comes up, you

00:11:07   guys start like looking for fast forward button. So I'm not going

00:11:10   to go sporty sports on it. But the gist of it is so Keith

00:11:14   Olbermann is it. I like him. I'm a huge fan of his work. He's

00:11:18   but he's, you know, not really a straight news guy and maybe

00:11:21   never really was but he's more of like the TV equivalent of a

00:11:24   sports columnist. He's an opinion guy. And he had a rant

00:11:28   on his show on ESPN last week. More or less saying no Derek

00:11:34   Cheater is you know maybe a fine guy but he's not one of the greatest players

00:11:37   who's ever played the game and everybody keeps going on and on about how one of

00:11:40   the all-time greats is retiring and that is not and I you know not to put words

00:11:46   in his mouth but his argument came down to look his stats just stats are very

00:11:50   very good but they are not all-time great and I to me it's exactly like the

00:11:57   people like the Android people who everything is about specs you know and

00:12:02   And it's, hey, the A8 isn't that great because, jeez,

00:12:06   it's still only dual core.

00:12:08   We've been, you know, every top flight Android phone

00:12:11   has been quad core since whenever, you know,

00:12:14   they're up at two gigahertz and Apple's still downclocking

00:12:17   them to one point, whatever gigahertz.

00:12:19   And, you know, only one gigabyte of RAM they've been on,

00:12:23   you know, and on and on spec wise.

00:12:25   And it's like, if that's, if you want to judge the iPhone

00:12:27   compared to the HTC One or Samsung's Galaxy Note

00:12:32   or the Galaxy Alpha, whatever came out today,

00:12:35   based on that classic tech review checklist style,

00:12:41   how fast is the CPU, how much RAM,

00:12:46   what is the benchmark on this or that.

00:12:49   You're never gonna get it.

00:12:52   You're not gonna get the difference

00:12:54   between what Apple's trying to do

00:12:55   and I think has largely succeeded

00:12:58   year after year after year doing.

00:13:00   You're not gonna get it.

00:13:01   I you know if that's the way your mind works. That's why you're an Android guy you know and you're happy for it

00:13:05   You know I'm glad that you know Android is is as successful as it is for you

00:13:09   But you you know you're you're trying to judge the iPhone on the wrong thing and that's exactly

00:13:13   Looking at Jeter that way. It's exactly the same way

00:13:16   No, I agree and if I'm gonna continue the Jeter thing just for a moment

00:13:22   I mean I think I I've I've come around on it and for the same reason and like

00:13:26   The defense is like one thing right Jeter's widely criticized for his defense and according to the stats

00:13:31   Rightly, so he's he's not like he always makes the routine play never makes mistakes

00:13:36   But he doesn't have great range doesn't get to as many balls as he can

00:13:40   Yet the most iconic Jeter play is a defensive play

00:13:45   Where in the playoffs, you know best of five series the Yankees were losing 2-0 and he makes this like totally just kind of random

00:13:53   play to catch a misthrone ball and flip it to home plate and get the guy out basically saving the

00:13:58   game and saving this saving the season and and what what I like about that and yes it's it's

00:14:05   very cliche and it's almost too neat in some ways um but that's Jeter's career in a nutshell I guess

00:14:12   um is in the grand scheme of things like the the defensive measures like run saved or over average

00:14:19   or something like that. I don't know exactly what the wording is. But that one run was worth like

00:14:24   a thousand runs saved in the regular season. Right. And it was a playoff game against the

00:14:30   Oakland A's in, oh geez, 2003? 2001. 2001. Oh yeah, yeah, 2001. Yeah, and the Yankees ended up,

00:14:38   they didn't win the World Series that year actually. But it was in that emotional,

00:14:41   everything was pushed back a week because of 9/11 having occurred that year.

00:14:49   in New York. It was in Oakland, which is a crazy ballpark.

00:14:55   And they were down to zero and is the best of five series. So if

00:14:58   they lost that game, they were they were done.

00:14:59   Right. And it's just an errant throw to home, you know, and it

00:15:05   missed the cutoff guy who was supposed to be the first

00:15:07   baseman and it Jeter had no reason to be there. There's no

00:15:10   reason for a shortstop to ever be where Jeter was, but he was

00:15:13   there. He saw it. He saw the play. You know, it's a great

00:15:17   It's an absolute great exam or look at the other two to me two of the other signature plays in Giers career the two times

00:15:24   That he went flying into the stands to catch foul balls

00:15:27   You know, there was in a the one time it's like his face got so busted out

00:15:33   He actually had to come out of the game. His face was all you know bloody

00:15:35   He looked like he'd been in a boxing match, but he made the catch, you know, I

00:15:39   Don't know just he's made catches like that. You know, there's there's footage of him, you know, you can watch it

00:15:45   You can, you know, look it up on YouTube and see him make big game playoff catches flying headfirst into the stands.

00:15:52   You know, he's done it more than once.

00:15:55   Most guys finished their whole career and never make a play like that.

00:15:58   So I totally agree. You can't measure it by stats.

00:16:00   This whole thing is a thing in sports in general, right?

00:16:03   Because there's been a big statistical revolution in in sports,

00:16:06   breaking things down, particularly in baseball, where it actually works the best, because baseball really is a one on one game.

00:16:13   It's not really a team game in some ways.

00:16:15   and between the pitcher and batter.

00:16:19   And in many respects it's been good.

00:16:22   It's been good for teams.

00:16:23   Teams that have adopted this approach have excelled.

00:16:26   But like any sort of analytical based thing,

00:16:31   it gives you an advantage briefly,

00:16:35   but it's easily copied.

00:16:37   So now almost everyone does it,

00:16:39   and so the advantages are much less

00:16:42   than they were previously.

00:16:44   and what ends up mattering then.

00:16:46   And you see this in, I think, probably more basketball,

00:16:49   which is the sport I follow more closely,

00:16:52   than in baseball, is the importance of

00:16:56   lots of the intangible stuff,

00:16:57   like how a team works together,

00:16:59   like how Shuff shifts back and forth.

00:17:03   So you had a team last year like the Spurs winning the title

00:17:06   despite not being the strongest team on paper,

00:17:08   and it's because there's clearly something else going on.

00:17:11   And I think so much of that applies to,

00:17:16   if you think about technology in general,

00:17:18   previously in the '80s, in the '90s,

00:17:21   businesses were buying it.

00:17:22   And the idea is someone, the person who was buying it

00:17:25   was different than the person who was using it.

00:17:27   And that sort of scenario lends itself to featureless,

00:17:31   lends itself to price competition

00:17:33   because the user experience is completely divorced

00:17:36   from the buying experience.

00:17:38   But now when it's more in the consumer space,

00:17:40   all these intangible things like what it's like to use it, how you feel when someone sees you pull

00:17:45   out of your pocket. All these little bits and pieces that you can't really measure become much

00:17:51   more important. As that's happened, Apple has benefited. As devices have become more personal,

00:17:59   as devices have become with us more often, Apple has benefited. You can send a watch that's very

00:18:03   visible and is with you all of the time. I mean, Apple, I would imagine, is

00:18:09   salivating at the opportunity because it fits so well with their strengths. Yeah, I

00:18:14   completely agree with that. I would say if you look at Apple, zoom out to the big

00:18:18   picture and just look at them from the founding in 1976 to today. The miracle is

00:18:25   that they survived until now. Right. You know, and now meaning, let's say,

00:18:30   the iPhone in 2007 or even the iPod. Let's you know because that's it's that's the thing that

00:18:35   turned them around. That they made it until 2001 when they could launch the iPod and and start to

00:18:44   make you know to really grow outside the tech world. I have a friend a good friend Matt who's

00:18:52   a fellow Yankees fan. I think he listens to the show he's probably gonna be thrilled I'm talking

00:18:55   about him but he when I first met him he he asked me when he you know he knew I

00:19:01   was a Yankees fan from reading you know during fireball but his theory is that

00:19:06   there's two types of sports fans stats stats fans and story fans and you know

00:19:14   it's it's any anytime you try to say there's only two type of people of

00:19:17   course there's a gray zone and you know some stats guys are a little bit into

00:19:20   the story side and some story guys are still interested in some of the stats

00:19:24   I'm a story guy though in his telling where it's I just don't get into the numbers that much, you know

00:19:31   And it's I I believe in clutch hitting I believe in clutch performance

00:19:35   And I know that's one of the stats guys things, you know, like, you know, the the the baseball prospectus

00:19:40   Guys Bill James, you know, there's a theory that they try to back up that there's no such thing as clutch hitting

00:19:46   you know and I I say you say there's no such thing as clutch hitting and I say

00:19:51   Derek Jeter and I just don't see how you could deny it and they don't meet his spotlight, right?

00:19:58   And even though to back it up and one of them, you know

00:20:00   The whole Jeter farewell thing is just chock full of all these statistics and stuff like that

00:20:06   but one of the most amazing ones is and I this is off the top man, I'm not gonna look it up, but it's

00:20:12   He's played 158

00:20:15   postseason games

00:20:17   Which is you know in the regular baseball seasons 162 games and most guys would be lucky to play 158

00:20:23   You know even players who aren't injured take a game off here and there so he's played easily the equivalent of a full

00:20:30   regular season all

00:20:33   postseason which by definition is only against the very best pitchers and

00:20:38   Opposing teams they don't you know every postseason game is against a team that was good enough to make it into postseason

00:20:45   And he's got like a 320 career postseason batting average, you know enough that it would win the batting title most years

00:20:51   And that's you know in the postseason

00:20:53   no, that that's really impressive because

00:20:56   batting averages dropped significantly in the postseason

00:20:59   Right because the pitching is so much better so much better

00:21:03   It's you know, it's it's really that that's that's the way to win

00:21:07   You know postseason baseball games is to have amazing pitching. You know, it was like with the

00:21:11   remember the White Sox

00:21:14   when they won in 2000 I

00:21:17   Get the year wrong six. When did he hear whatever year it was at the or whatever year the Chicago White Sox won a decade ago

00:21:24   They they won the World Series in four games. They're four pitchers pitched four complete games

00:21:29   It was it's like unbelievable

00:21:31   They had four pitchers who caught fire and were just unhittable and they just went one two, three four the World Series is over

00:21:38   Yeah, it's like having a hot goalie in in hockey or something. You can just shut out everything else

00:21:43   and tech is exactly the same that there's story guys and stats guys and you know and the

00:21:50   Tech industry was so dominated by the stats the specs

00:21:55   for so long

00:21:58   Because it was only tech people effectively, you know, everybody using a computer was a tech person you for some reason

00:22:06   You know that that's that was the the problem Apple faced in 1984 with the Macintosh is they'd build a computer

00:22:12   You know quote unquote for the rest of us and there were times of us

00:22:16   Well there they had no interest in a computer. You know, it really kind of needed the computing world needed

00:22:22   the internet and to make it a

00:22:25   Communications device because that's something everybody wants to do everybody, you know, it's it's being able to communicate

00:22:31   That turned the computer into something regular people wanted

00:22:35   and

00:22:37   By that time it was you know

00:22:39   It was too late windows had become entrenched and you know when everybody got on the internet. It was a windows dominated world

00:22:45   Yeah, no, I think this is the key thing that every time you hear someone talk about Mac versus Windows

00:22:51   it actually had very little to do with the the

00:22:56   Underlined dynamics it had to do with the external

00:22:59   Context and who was buying and all that all that sort of stuff and anyone who doesn't really talk about that

00:23:05   You can take in my opinion the you know their opinion with a very large grain of salt

00:23:09   because that the world was just so completely and utterly different then and

00:23:14   There's actually very few lessons to be drawn to today. Yeah

00:23:18   The famous I brought this up and it's it's you know

00:23:23   Maybe one of the all-time claim chowders of all time is commander tacos

00:23:27   Reaction to the original iPod back in 2001 on slashdot

00:23:32   Here's his whole comment after Apple released the iPod.

00:23:37   No wireless, less space than a nomad, lame.

00:23:43   So it was all, you know, it was completely looking at it

00:23:47   from the perspective, and we laugh at that in hindsight,

00:23:49   right, that the original iPod was lame.

00:23:52   But it was a rational perspective from the point of view

00:23:57   of the type of people who read Slashdot.

00:23:59   - Oh, for sure.

00:24:00   I'm surprised the only thing he forgot to put in was way too expensive.

00:24:04   Yeah, yeah, exactly.

00:24:06   Where maybe it's-- yeah, to hit the trifecta.

00:24:13   Does less, doesn't have wireless.

00:24:14   We want everything to be wireless for whatever reason.

00:24:17   Less space than a nomad.

00:24:18   Remember nomads?

00:24:19   I mean, who even made that?

00:24:22   Creative.

00:24:22   No, creative labs.

00:24:23   Yeah, I had a diamond--

00:24:25   diamond was the other one.

00:24:26   I had a diamond Rio.

00:24:28   But yeah, creative labs.

00:24:29   They're the guys who sued Apple about the sound chip

00:24:34   in the iPod, and actually won.

00:24:35   I think that single-handedly kept their company afloat.

00:24:39   I think they might still be around, actually, I'm not sure.

00:24:43   But yeah, creative technology's out of Singapore.

00:24:46   - Right, whereas there was some amazing technology

00:24:49   in that original iPod.

00:24:52   Like the 1.8-inch hard drive,

00:24:55   I think that's the size that it was, was a new thing.

00:24:59   It was like nobody had used it.

00:25:00   And there's some great stories.

00:25:01   I forget who published it originally, but it was--

00:25:05   what was the name of the guy?

00:25:09   He ended up at Palm.

00:25:10   Yeah, Rubenstein.

00:25:13   Rubenstein, right.

00:25:14   John Rubenstein was an engineering head

00:25:17   at Apple at the time and was over in Asia scouting new stuff.

00:25:24   And I think it was Toshiba who'd come up with these.

00:25:27   And they're like, "Oh, and we've done this.

00:25:30   We've gone from 2.5 inch hard drives to 1.8 inch

00:25:34   and nobody wants to buy them."

00:25:36   Because everybody's putting hard drives,

00:25:39   the smallest thing anybody was putting hard drives into

00:25:41   were laptops.

00:25:42   And laptops in 2001 or 2000, whatever year it was,

00:25:47   even the small ones, the difference between a 1.8

00:25:52   and a 2.5 inch hard drive didn't make a difference.

00:25:54   And so why spend it?

00:25:55   Why, you know, everybody told Toshiba,

00:25:57   well, why would we spend all this money when we don't really need to save that space?

00:26:00   Whereas

00:26:02   Rubinstein looked at them and thought that's it. That's the thing we can you know do this music thing with to you know

00:26:09   Because 2.5 was way too big. Well, what's so interesting about this whole story actually is

00:26:13   It's very it's a very

00:26:17   Unapple kind of story which in some ways the iPod is a bit of an unapple type product

00:26:22   But basically in Jan so the applet originally said like oh we're gonna be like about personal video

00:26:29   That's gonna be the new, you know desktop publishing and then they're like, oh crap

00:26:33   We missed the music boat and then Steve Jobs came out said actually our we have a new strategy

00:26:38   it's called the digital hub strategy right and

00:26:40   The center and we're gonna and then the rest of the event where the event where he introduced the digital hub strategy

00:26:46   was in January 2001 in the same event they introduced iTunes and

00:26:52   And they talked and they spent all time about music

00:26:55   It was rip mix burn was the was kind of the catchphrase and the thing is the iPod didn't exist at all

00:27:01   It didn't exist at Apple because John Rubenstein didn't go to Japan until February the next month

00:27:07   Right and it was when he was in Japan

00:27:09   He was introduced to or he saw the hard drive and it was the hard drive

00:27:13   That was the genesis for the iPod

00:27:16   And so it was actually it's almost like completely backwards from the way we think about an Apple product being created

00:27:21   And so the original iPod was put together in like six months.

00:27:24   And it was put together super fast.

00:27:27   It was totally driven by the technology.

00:27:29   But what came out wasn't a technological product.

00:27:32   It was a music player.

00:27:35   And there's something like, it's very different to be a hard drive

00:27:42   than it is to be a music player.

00:27:43   And it's that kind of transformation from a technological item

00:27:47   to a something that you desire because it makes your life better that that

00:27:54   apples that is Apple that what is what Apple is so good at yeah and you know

00:28:00   we'll just get back to the watch after I'll take a break in a moment we'll get

00:28:02   back to the watch but I do think you're right though and I think you even

00:28:05   mentioned this on Strateecory this week or was it you who mentioned that the

00:28:08   iPod was sort of an on Apple like product in hindsight I think I've

00:28:12   mentioned yeah I think I've yeah I did in the article about the watch and it's

00:28:17   It's worth keeping that in mind, I think, thinking about what the watch is going to

00:28:23   be or what their intentions are.

00:28:24   Is it an iPod on your wrist or is it something more?

00:28:27   And I'm with you that I think it's something more.

00:28:29   Yeah, I've gotten tripped up by the iPod a few times in my analysis.

00:28:35   Last year I originally said the phone would be much cheaper than it was because I was

00:28:40   thinking about the iPod and how the iPod was always price competitive.

00:28:43   I did within a week, I think, and I think you chatted me at the time, said, "No, actually,

00:28:48   I think it's going to be pretty expensive," and it ended up being that. Basically, the

00:28:52   iPod was always basically an accessory. It was a single-purpose device.

00:28:58   A peripheral.

00:28:59   Yes, exactly. That's the word. It was a peripheral that was very cost-competitive. It was done

00:29:04   in an Apple way. It was simple. It was very well thought out. It had beautiful industrial

00:29:10   But if you think about it, every other Apple product of note has been a platform.

00:29:15   It's been a general purpose computer.

00:29:18   And the arc of Apple is to create a general purpose computer that's smaller and more attractive and more accessible than the competition.

00:29:27   And everything fits in that arc except for the iPod.

00:29:32   - Yeah, I don't think it makes any more sense than,

00:29:35   as a typical Apple product,

00:29:38   doesn't make any more sense than if,

00:29:40   in some alternate universe,

00:29:41   the Quick Take camera had really taken off

00:29:46   and that Apple had become a major player

00:29:48   in digital photography.

00:29:50   Which of course they are now that the phone is out,

00:29:52   but you know what I mean?

00:29:53   I mean, the Quick Take was amazing.

00:29:55   I forget what year that came out in the '90s,

00:29:57   but it was amazing and it was one of the,

00:29:59   it was super expensive compared to like film cameras,

00:30:02   but it was one of the first digital cameras that was at least plausible for someone to

00:30:06   own and it was amazing.

00:30:08   And it took like 320 by 320 pictures or something.

00:30:12   But in some world, in some alternate universe, that could have become a hit.

00:30:16   Especially I think if it had, you know, if Jobs and his crew had gotten there a little

00:30:22   earlier and cleaned up, you know, the product development like they eventually did.

00:30:29   If it had been a little bit more of a jobsy Apple product than a Scully era Apple product,

00:30:36   it might have been.

00:30:37   But it would have been weird for Apple to be selling something like a camera, but no

00:30:40   more weird than it was that they were selling a Walkman.

00:30:43   No, totally.

00:30:44   Oh, I actually think the camera is a great example.

00:30:49   I think the other example that's interesting in telling is the Laser Writer, actually,

00:30:54   Apple actually was like one of the preeminent printer manufacturers in the

00:30:59   world but that was that they were never a printer company like that was that was

00:31:05   to enable the Mac to like enable desktop publishing and all that all that sort of

00:31:09   stuff but I think both are both are examples of in one a hit when not so

00:31:15   much but of products Apple made but by no means define the company nobody

00:31:21   think of Apple as a printer company?

00:31:24   - It all comes back to the story/stats divide

00:31:28   in the tech world where, and again,

00:31:30   this is super ancient history, the laser writer stuff,

00:31:32   but my understanding of that is Apple wanted others,

00:31:36   they didn't even wanna get in their printer business,

00:31:38   really, I mean, they'd take the money

00:31:41   and they sold them for a lot of money,

00:31:42   and they never, when they eventually got out,

00:31:44   there was nobody was pouring one out for the Apple printers.

00:31:49   It was never really, the company's heart

00:31:50   was never in it, but the gist of it was that they couldn't get other companies to make

00:31:53   them. They were like, "Hey, you guys could build these laser printers, and yes, they'll

00:31:57   be crazy expensive, but look at the output. We can do beautiful high resolution output."

00:32:04   And everybody, the industry was like, "Ah, dot matrix is good enough. We don't need that."

00:32:11   Whereas the output was horrible from dot matrix printers.

00:32:14   It's absolutely horrible.

00:32:16   - It's crazy to even think of that, to compare them.

00:32:20   But what's interesting though is,

00:32:23   yeah, the Laser Writer wasn't,

00:32:25   I'm looking at Wikipedia articles,

00:32:27   released the same day as PageMaker,

00:32:28   and it was way more expensive than what was on the market,

00:32:33   but it had Apple Talk,

00:32:34   which would be used by multiple people,

00:32:37   so the per user cost was lower.

00:32:39   Like, it's funny, you see almost all these characteristics

00:32:42   of a typical Apple product wrapped up in a printer,

00:32:45   which is kind of weird to think about,

00:32:47   but I think the broad takeaway is nobody thinks of Apple

00:32:50   as a printer company, and I'm definitely not gonna reference

00:32:53   the Wazer writer when I think about analysis of the watch,

00:32:58   but on the same tone, I think I'm not sure

00:33:01   you should be referencing the iPod

00:33:02   when you think about analysis either.

00:33:05   - All right, let's take a break.

00:33:06   I'm gonna thank our first sponsor, brand new sponsor.

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00:38:01   so let's let's go back and let's let's

00:38:05   Let's get into the watch. So you've had an evolved

00:38:09   Take on the watch like you even mentioned earlier in the show that your initial take was that this it was too unfocused

00:38:17   And so start me down your path. What was your initial take? My I

00:38:22   think I think your initial take represented an awful lot of

00:38:24   people know for sure. I mean, it's one of the it's one of the

00:38:27   most popular articles I've had in quite a while, which which is

00:38:29   funny, because people like, oh, you just change your mind. Well,

00:38:31   well, I know, actually, the feedback was very, was very

00:38:34   positive in favor of that piece. I'm not I'm not winning any

00:38:37   brownie points by by switching. Basically, my criticism was

00:38:42   primarily about the event. I mean, because I wasn't there. I

00:38:46   And obviously, even people who were there couldn't use the watch.

00:38:48   So it's hard to get too much into the actual details.

00:38:52   But the event in general, I compared and contrasted it to previous new product

00:38:57   introductions. So going back to the iPod, going back to the iPhone and the iPad,

00:39:03   in all three cases,

00:39:06   Steve Jobs did a bit of exposition about why this product needed to exist.

00:39:14   You know, what's the market? What's what's the problem people have?

00:39:18   What's out there? Oh, and here's our new thing.

00:39:21   And it happens to fit the market and take care of problems and all that sort of thing.

00:39:25   So that didn't happen with the watch.

00:39:30   What happened to watch is Tim Cook got on stage and he said, oh, here's the next store.

00:39:34   You know, we're very excited. We've been working very hard.

00:39:37   Here's the next the next chapter in Apple's story.

00:39:40   And then, boom, a video popped up, you know, like it was it was a great video.

00:39:42   was showing the industrial design of the watch,

00:39:45   and then it pops on screen, and everyone's like, ooh.

00:39:48   But that piece about why does this exist,

00:39:51   where in the market does it go, was missing.

00:39:54   And that was concerning to me, and that concern

00:39:59   was amplified by the software demo, which to my mind,

00:40:04   again, going into the event, I was thinking

00:40:08   this was an accompaniment to the iPhone.

00:40:11   That's why it was being introduced to the iPhone.

00:40:12   This was my thinking going into it.

00:40:14   And in that light, I'm like, why are they doing a demo

00:40:16   that doesn't leverage the iPhone?

00:40:18   Like they were searching for movies on the watch.

00:40:20   They were looking at all these photos on the watch.

00:40:22   Like, well, if you have an iPhone in your pocket,

00:40:24   why wouldn't you use that to do this sort of stuff?

00:40:27   And so I'm like, this demo is kind of weird.

00:40:30   They didn't say why.

00:40:31   This has me a little worried about the whole concept.

00:40:35   - Yeah, I completely agree.

00:40:38   Why would I wanna buy this?

00:40:41   Why what what do you know? What is the job to be done to use the the I?

00:40:46   Was gonna say Horace, but I guess he took that from clay Christiansen

00:40:51   Yeah, clay Christiansen, but you know, it's just a way to put it in context. But yeah, what what what are you hiring?

00:40:57   the watch to do and

00:40:59   I don't think they answered that but and I'm again a time will tell on this front. It's either a sign that

00:41:07   That they have lost focus

00:41:10   Post jobs and it is the first you know we're either gonna look back at that

00:41:16   introduction event as the first warning sign that Apple is in trouble and is

00:41:21   going to isn't going to do the same good job with a new an altogether new product

00:41:26   as they did before or it'll be forgotten and it was because it was it was on

00:41:32   purpose yeah well it's either it's either one or the other either they

00:41:37   purposefully left it largely mysterious and they're gonna save that why for what

00:41:43   I presume to be the event in January or February where they're going to say okay

00:41:47   now it's going on sale and here's everything you need to know about it all

00:41:52   the prices all the features here's what the SDK can do you know all of that

00:41:57   stuff is gonna come in a separate event and that they did this sort of teaser

00:42:02   event for strategic reasons that will be clear after that watch actually comes

00:42:09   out because that's the best to me that's the best way it's like the difference

00:42:13   between a preview that's supposed to tell you everything you need to know to

00:42:18   make you want to go see this movie or a teaser that's just supposed to put the

00:42:22   movie into your head that no that's a that's a that's a good analogy to think

00:42:27   about it I think there's also another explanation to I think it's possible in

00:42:31   January it's even not as clear as it could be and the reason that is is

00:42:39   you know I actually I cheated when I did that new product introduction because I

00:42:45   didn't include the Mac and actually I did go back and watch the Mac event but

00:42:50   it didn't fit as neatly because if you actually if you go back the

00:42:56   Mac introduction was almost identical to the watch introduction. It was Jobs saying we've

00:43:02   been working super hard, this sort of thing. And then there's this long, what's the song?

00:43:10   You know, the... Sock Ape... I forget the name. I know what you mean.

00:43:16   Chariots of Fire or something like that. Oh, no. Right, right. It wasn't the one from 2001,

00:43:21   it was the Chariots of Fire song. Yeah. I think so. I don't remember. The video I watched

00:43:26   actually was, I think for copyright reasons, like all the music was taken out, but if I

00:43:30   recall that's what it was. And then he pulls out, he reveals the Mac. Like it was very,

00:43:37   it's funny, like it actually ended up being a lot like the watch, and I'm not sure that's

00:43:42   a great precedent. Obviously in the long run the Mac turned out well, but as we just discussed

00:43:47   it had a bit of a struggle at the beginning. But at the same time, if you look back at

00:43:52   the iPhone, nothing in that event was actually very pertinent to the way we use iPhones today.

00:44:00   And that didn't make the event a bad event. It remains an amazing event. You know, it's

00:44:05   kind of like Steve Jobs' like all time, you know, on the all time great hit list, it's

00:44:10   number one. But at the same time, when you're creating a platform, when you're creating

00:44:16   a new thing that is going to create all kinds of new opportunities, it's almost by definition,

00:44:22   definition impossible to know at the beginning what that's all going to be. Remember, Steve

00:44:26   Jobs, I know there's contention that Steve Jobs did or didn't want the App Store. I'm

00:44:30   in the camp that believes he did not want it. He thought that Apple could meet all the

00:44:34   needs that the phone ought to serve, when actually that wasn't even close to being true.

00:44:40   And I think there's a way to look at this watch event and that Apple, maybe they didn't

00:44:44   articulate as well as they could have, but they now realize that. They know that we create

00:44:49   platforms there's no way we can ever even fully know what this is going to do

00:44:53   and but we've created a foundation for something really great I'm of the

00:45:00   opinion I think it's pretty clear he didn't want an app store in 2008 which

00:45:05   is when the actual app store came out I think that his I think he I I think that

00:45:12   he must have known that eventually they would do it but I think that he thought

00:45:16   it was a this does not need to be a top priority for the next year you know we've got so many

00:45:21   things to do you know this first phone is so you know has so much room for improvement the last

00:45:28   thing we need to worry about is the the app store sdk angle right and all the limitations that

00:45:33   imposes on you and things right i think that if you had had if we could go back in time and have a

00:45:38   honest discussion with steve jobs in the summer of 2007 you know and people had started jailbreaking

00:45:45   I mean like in July, I mean like weeks after the thing came out, like to me that's still,

00:45:51   it's one of the great things in indie Mac development history was the way that, you

00:45:58   know, the first couple of developers who jumped on that.

00:46:02   I mean like the first version of Twitterific was written before there was an SDK.

00:46:09   Like Hockenberry had a version, a Twitter client running on the iPhone before there

00:46:13   there was an SDK. I love that. But the demand it was just I

00:46:20   think he just underestimated how badly the people who became

00:46:23   indie iOS developers wanted to be able to do that. But I do

00:46:29   think you're right to that he you know, is the nature of his

00:46:31   personality was such that he assumed that his what he wanted

00:46:34   the phone to do was what most people would want it to do and

00:46:36   it would cover a broader swath of you know, why people would

00:46:42   want it.

00:46:42   And that's what's so interesting about this is a lot of the people who are disagreeing with me now, so my position now has evolved to the, I don't think Apple is making an accessory.

00:46:52   I think they're making a new platform. A lot of people disagree with that, want the Apple defined vision. They want it super clear on what it's going to do.

00:47:02   and they reference, again, I did the same thing,

00:47:07   so I'm not like by any means criticizing,

00:47:09   I think it's a very valid point of view,

00:47:10   they reference kind of like the iPhone,

00:47:13   but Steve Jobs' vision for the iPhone

00:47:17   ended up being too small in a lot of ways.

00:47:20   I mean, that's not true in a big sense,

00:47:23   but in this kind of narrow sense

00:47:24   about what ought to run on it

00:47:27   and when you ought to enable all that stuff to run on it.

00:47:31   Um, and not just not just too small in the 3.5 inch diagonal, too small in the conceptual sense.

00:47:39   Right, exactly. And, and, you know, it's a great for all for for the kind of pining that

00:47:47   this sort of talk can inspire for Steve Jobs and for his way of interesting products and the way he

00:47:54   was such a master, you know, it's textbook like this isn't like particular to Steve Jobs, he just

00:47:58   just did it better than anybody else. He was the best salesman in the world. You have this

00:48:04   problem. Oh, you're right. I do have that problem. Look at the competition. They don't

00:48:07   really work. Man, yeah, they all suck. Oh, wouldn't it be great if there was something

00:48:11   that met all your needs? That'd be awesome. Oh, look who we just introduced. Here's my

00:48:15   money. Take it." He just walked you through that so perfectly.

00:48:22   I do think that's in some ways missing, but at the end of the day, the needs he ended

00:48:26   up selling weren't the ones that were actually key to the product or what made it wildly

00:48:31   broadly successful.

00:48:34   But they were good enough to get it off the ground. I mean, and you know what, those things

00:48:38   are still reflected in the default dock of the iPhone today, right? The Steve Jobs, not

00:48:47   iPod, iPhone. Did I say iPod? I said iPod, but I meant iPhone. The dock, the four apps

00:48:54   at the bottom phone, mail, Safari, and it was called iPod

00:49:01   back then. That's where I started getting tripped up. And

00:49:03   now it's music. That's what he wanted, right? He wanted a

00:49:07   device that would play his music. And it would be a cell

00:49:11   phone, and he could throw out whatever piece of garbage from

00:49:14   Motorola he was using at the time. He could do his email, and

00:49:18   he could browse the web. And there you go. There's the

00:49:21   product. And that was awesome. That alone would have been

00:49:23   enough.

00:49:24   Right.

00:49:25   And the thing is, I think Apple…

00:49:27   But it wouldn't have been enough to make it a compelling product.

00:49:30   It would not have been enough to make it a world-changing product, which is what it has

00:49:35   eventually become.

00:49:36   Right.

00:49:37   No, that's exactly it.

00:49:38   And I think the reason why, and this is what makes the watch interesting, is Apple actually,

00:49:44   in some ways, has some of those pieces there.

00:49:47   Like, there's a slide where Tim Cook has the three things.

00:49:49   It's a great timepiece. It's health and fitness. It's like the most personal communications device or something. I think those are the three items

00:49:57   So the fact that I can't remember it clearly is indicative

00:50:01   Yeah, yeah now the personal

00:50:05   Well, maybe the personal communication right that the three things that they're kind of selling to watch on it at the event this month were

00:50:12   fitness tracking

00:50:15   time telling yep, and

00:50:18   the personal communication why the thing is those like I mean I

00:50:23   Even more so than the phone like the use case for the phone was so obvious, right?

00:50:28   Just to make a better just to make a better phone would have been enough to sell a lot

00:50:33   Just to make a better Nike fuel ban is not enough to sell a lot

00:50:39   Because the the you're not same as the iPod just to make a better music player was enough to sell a lot

00:50:46   Because what was the alternative to carry your computer around like the alternative was was a non-starter

00:50:52   the alternative to a watch is to use the phone in your pocket like the the the

00:50:57   competition for even considering buying a watch in the first place is far steeper

00:51:05   Today than it was for any any product except for maybe the iPad is probably the best is

00:51:11   Probably the best comparison here. Like why would you buy an iPad if you already if you already have a Mac?

00:51:16   And so for that reason,

00:51:18   this is the biggest thing that changed my mind.

00:51:21   Like I think Apple releasing a focused product

00:51:24   would have meant a niche product

00:51:25   that would never get great traction

00:51:28   because it would never be,

00:51:29   the delta over just pulling a phone in your pocket

00:51:32   would have never been great enough.

00:51:33   Like they needed a swing for the fences

00:51:35   and it's probably raising risk, right?

00:51:37   But the way you would get a great return

00:51:39   is by taking on greater risk

00:51:40   and I think that's what Apple's done.

00:51:42   - I, very, very, very much in agreement with that.

00:51:45   I think was your piece actually your phone piece that triggered this particular realization.

00:51:53   So I'm glad to hear you're in agreement. Wait, which phone piece?

00:51:56   The observations on initial observations on the phone. Basically, you kept referring to the fact

00:52:03   that if Apple would have only done like a notifications and tracker device, you'd been

00:52:09   worried about the future of the company or something along those lines. I'm like,

00:52:12   like, "Why is he being so hyperbolic?" And then I basically thought about it and was

00:52:17   like, "Well, that's what triggered me thinking through. What if they only did this? What

00:52:22   would be the implications of that?" And that was my piece this week. If they only did that,

00:52:26   there would actually be a lot of long-term negative effects from limiting the potential

00:52:33   of the platform to limiting the potential market, all of which would be very bad for

00:52:37   Apple and which is why I think they rejected that approach and I presume was your your thinking as well

00:52:43   yeah, I think so a

00:52:46   Little thing just a side note one thing that they've said publicly

00:52:51   I think they said it at the event or at least they said it after the event in like on the record

00:52:57   Statements not like off the record and then I think Tim Cook repeated it in his interview with Charlie Rose, which was excellent

00:53:05   Really really interesting. I

00:53:07   Just one of the the best interviews I've ever seen with anybody related to Apple ever

00:53:13   But they came out and said that they've been working on this for three years and

00:53:20   They never ever say stuff like that

00:53:23   They are super secretive about how long they've been working on stuff

00:53:27   they never said how long they were working on the iPhone and it took years and

00:53:32   stuff that was I think mostly off the record for it to come out that

00:53:36   the way that the iPhone came about was that they were working on a tablet and

00:53:40   The tablet got pretty cool and then they had this moment where they were like, wait a second

00:53:45   Screw this tablet size for now. Let's take this tech and shrink it. Can we shrink it to be a phone?

00:53:52   Boom, there's the phone. They don't they don't they never talked about that

00:53:57   They didn't talk because they don't want people to know how they were right. There's something part of the new

00:54:02   Tim Cook Apple is the simple fact that they said that they've been working on

00:54:06   this for three years and I can't help but think that part of that is that they

00:54:12   kind of want to say this whole thing is after Steve because three years is how

00:54:18   long ago Steve Jobs died like I don't think that's a coincidence that they're

00:54:23   saying that publicly and it's a way of saying that I I think it's a sign of

00:54:27   their confidence in the watch but they're setting it up in advance that

00:54:31   that they think this thing is, they're onto something.

00:54:33   They think it's gonna be huge,

00:54:35   and they don't want people to say,

00:54:37   well, I'll bet Steve Jobs invented it.

00:54:38   It's probably the last thing he invented.

00:54:40   Now show me something that you can invent,

00:54:41   you know, without Steve Jobs.

00:54:43   - That's interesting.

00:54:44   Yeah, that makes total sense.

00:54:46   - So for example, I remember when I got to take

00:54:49   that antenna tour after Antennagate,

00:54:51   and they took a bunch of us back

00:54:53   into their antenna testing lab,

00:54:55   and we got to see, you know, these cool chambers

00:55:01   they test these things. I forget the guy's name, but he's the antenna engineer who and

00:55:07   he led the tour and he was a little nervous. He did great, but he was a little nervous

00:55:10   because he's just is not used to speaking to the press. He's, you know, he's an Apple

00:55:14   employees is the last thing he does is speak to the press. And, you know, a week prior,

00:55:20   you know, he had no idea it was like this antenna thing blew up and within the course

00:55:24   of a week now here he is leading 20 people around Apple's you know lab and

00:55:31   Schiller and Katie cotton were part of the group too but they you know just

00:55:35   were walking around sort of supervising and somebody asked at one point they

00:55:41   were talking about the external antenna design which was brand new on the iPhone

00:55:47   4 nobody else had ever done it and initial reaction from a whole bunch of

00:55:52   people was, "Well, that's a stupid idea. The reason nobody else does that is it's a bad

00:55:56   idea." And then the antenna gate thing came up and they said, "Hey, touch it here and

00:56:00   you lose your cell phone." And they were like, "See? Told you. Terrible idea. Apple is a

00:56:05   terrible engineering company, blah, blah, blah, blah, blah." Well, we were talking about

00:56:08   it with them on the tour and somebody, I don't know who, but one of the writers asked, "Well,

00:56:13   how long have you guys been working on that antenna design?" And he was going to answer

00:56:18   honestly and Shiller immediately jumped in and said, "We're not going to talk about how

00:56:21   Long we've been working on the antenna design. I mean like just cut him right off. It was sort of an awkward moment

00:56:27   Because that was something they did not want to say, you know

00:56:31   They wanted to say how the you know, this antenna is actually is a good design trust us

00:56:36   You know, this is going to work out this this issue with the attenuation when you touch it at the wrong spot

00:56:41   It's a real thing, but it's not that big a deal

00:56:43   But there was no way that they were gonna mention how long that this guy had been working on an external antenna design

00:56:51   That yeah, that's interesting a Ruben and that's just the antenna design let alone saying, you know, we went from scratch to

00:56:58   Shipping I watch in three or Apple watch in three years

00:57:01   Yeah, no for sure. I mean it the the whole Apple PR thing is interesting. It's funny. You mentioned the tour of the labs

00:57:08   I wrote about this in my in my daily update this week where that that that was a good 22 days

00:57:15   I think after the antenna gate story first broke on on gizmodo

00:57:20   photo of all places. Whereas this week, two days after the bent iPhone story broke, they

00:57:27   were already giving people tours of the labs. I think they really learned their lesson on

00:57:31   getting ahead of such things.

00:57:34   Yeah, should we interrupt the watch to talk about Ben-Gazi? Ben Gate?

00:57:42   I mean, I think antenna gate is probably the best way to think about it. I mean, the iPhone

00:57:48   was on sale until I think a week ago, and it sold hundreds of millions of units. And

00:57:53   I think that's pretty much all that needs to be said. The idea that Apple would not

00:57:57   be aware or have tested this sort of thing is preposterous, and given their track record,

00:58:05   I'm very willing to give them benefit of doubt. And as someone who has criticized Apple in

00:58:11   various forums. It's preposterous to suggest that they didn't know or didn't have a particular

00:58:18   tolerance that the phone needs.

00:58:21   The reason it takes any hold though is that it plays into the misconception stereotype

00:58:26   of Apple. That they would do something like make an antenna design that looks awesome

00:58:33   and save space to make the device thinner but then have it not even be able to make

00:58:36   phone calls like that's the worst you know the worst stereotype of Apple you

00:58:41   could imagine and it's such a delicious sound bite you know world-famous iPhone

00:58:49   new new model can't make phone calls it sounds so amazing and then that you know

00:58:54   it's it's the perfect type thing for broadcasts right the TV people really

00:58:59   are the ones that made that catch fire and the bend thing is exactly the same

00:59:05   You know Apple so desperately, you know

00:59:07   or not desperate but

00:59:10   over

00:59:12   Interested obsessed with making devices thinner made a phone so thin that it bends when you put it in your pocket, right?

00:59:19   No, I think I I think the the key thing too is

00:59:22   As you just said like there was an antenna issue

00:59:26   It just it's just an issue of and so when the Verizon iPhone came out six months later

00:59:31   There was a different antenna design and so like it's not to say that there's not a problem

00:59:36   I don't think either of us are saying that I mean clearly

00:59:39   You know Matt Matt honing did a thing and wired and his his phone bent and I have no reason to to doubt him

00:59:46   But at the same and so I would imagine if the six plus s or whatever

00:59:52   It's gonna be called next year comes out that there's gonna be something

00:59:55   Slightly different in the chassis or even right now that I'm making changes now to restrict it

01:00:01   But at the same time, there's a very wide canyon between there are very isolated circumstances

01:00:08   where this might happen to, "Oh my God, the house is on fire.

01:00:12   It's coming down."

01:00:13   And I think that's what's so frustrating about these sort of gates.

01:00:18   Yeah.

01:00:19   Well, and it's that adage that it requires an order of magnitude more effort to refute

01:00:28   bullshit than it does to create it. It's so hard. It's the fact that it's bullshit

01:00:34   that makes it so hard to refute, you know, like compare and contrast with the the

01:00:38   8.01 iOS update that that effectively bricked a bunch of iPhone 6s. I mean I

01:00:45   think Apple said today it affected about and wound up it was out in the wild and

01:00:48   wound up affecting like 40 or 50 thousand phones which is I guess good

01:00:54   compared to the you know 200 million people using iPhones in the world but

01:00:58   still 40 or 50,000 people who just within the last week have spent upwards

01:01:03   of six seven eight hundred dollars on a new phone had a software update that

01:01:07   rendered their phone unusable and there was a solution they didn't have to take

01:01:11   it back it wasn't like the phones were permit you know you just had to go

01:01:14   through a hassle of downloading it in iTunes and syncing it to a PC and I'm

01:01:18   sure that's actually also above beyond the technical can of many users and so

01:01:23   some people probably did have to go to a store you know go to an Apple store and

01:01:27   it fixed but it was a real issue it was a real problem it was an actual botched

01:01:31   iOS update and Apple you know issued a statement that said we're really sorry

01:01:36   we screwed this up this was terrible sorry we're working on a fix as fast as

01:01:41   we can sorry do we do we mention that we're sorry and it was over you know

01:01:47   that's it it was a real issue they dealt with it everybody kept it in perspective

01:01:51   because it was real right and it's I don't know I said this with Marco before

01:01:57   I know Marco I think his wife had this problem, but with the iPhone 4 there was an actual really bad technical problem

01:02:03   Which was the the sensors that you know the ones that when you hold it up to your face remember that it was

01:02:10   They did not work correctly at all and that was a real thing and it was really affecting people with the phone

01:02:17   And there was nothing you could do you know?

01:02:19   it's

01:02:21   You know, it was a real thing and it got like one one thousandth the publicity that the antenna thing did

01:02:27   You know and meanwhile like you said the iPhone 4 was on sale until two weeks ago in some parts of the world

01:02:34   GSM not the Verizon one the GSM iPhone 4 with an absolutely unchanged antenna layout was on sale

01:02:42   until last week it sold, you know, it was

01:02:45   Tremendous numbers for years and years and years and everybody just sort of forgot it

01:02:50   But yet people still bring it up on Twitter last night

01:02:52   Hey, Zeus Diaz even brought up as I can it somebody said something like this is the worst part of the tech press

01:02:58   And and he was like the worst part is you know people like Gruber who still denied denied and ten agate

01:03:04   People are still hung up on that

01:03:07   People still think that there was like in their twisted view of history

01:03:12   They think Apple had a phone that couldn't make phone calls and that everybody just sort of brushed it under the rug

01:03:17   Yeah, no, there's always a lack of context. It was interesting is like Apple in some ways has benefited

01:03:23   Right because they they weren't criticized for the sense of the iPhone 4 and this week in you could argue

01:03:29   They've gotten less criticism. They deserve for the 8.0.1 update which that's a terrible terrible bug and

01:03:36   It it's very concerning about how that gets released and there's there's a wide like there's so much potential for

01:03:45   actually real serious

01:03:47   investigation and criticism as opposed to bullshit outing someone's name crap that Bloomberg

01:03:54   pulled. It's a very real issue. I think part of the reason it was not really focused on

01:04:01   was because everyone was talking about Ben Gate. It's frustrating as someone that wants

01:04:12   if you want Apple to create good products, you should be way more worried about 8.0.1.

01:04:16   In my opinion, they should be worried about the bend thing.

01:04:18   Yeah, because it's the sort of thing that could happen.

01:04:21   It feels like it could happen to me.

01:04:23   It could have happened to me.

01:04:24   I happen to not been paying attention at the time that it was out and in the wild.

01:04:27   By the time I was, I knew not to ignore the update.

01:04:33   But I could have easily installed that.

01:04:36   The other thing I think long term that that issue that the 801 update does that I think

01:04:42   harmful is it puts the seed out there that hey be careful of updating your iPhone

01:04:48   because it could be ruined and then it makes some number of people less

01:04:53   reluctant to stay up to date which hurts Apple and developers in the long run by

01:04:58   you know increasing fragmentation that that's a that's a great point and no

01:05:05   it's it's a great point but you know again lost lost in the shuffle of you

01:05:10   know, the great Ben Gates scandal of 2014. Yeah, the Ben

01:05:15   Ghazi name is funny. For some reason, though, I just can't

01:05:18   quite adopt it. I've stuck with I stuck with Ben Gates. Yeah,

01:05:21   that's, I think that the the real Ben Ghazi I think it's such

01:05:26   an overblown fake scandal, not that the tragedy of the people

01:05:29   dying is not serious, but the idea that there's anything that

01:05:33   was being covered up is just a bunch of right wing nonsense.

01:05:36   But the people who believe it are really, really into it and

01:05:38   think it's, you know, the most important under reported

01:05:42   political story of the entire Obama administration. And I

01:05:46   guess it's best to stay away from joking about it. So if

01:05:49   you're out there and you're offended by me joking about it,

01:05:51   I retract the joke, because it's not that funny a joke. It just

01:05:55   so happens, though, that it's such it is such it, it verbally

01:05:59   it works so well. You just put a D in there and it's all of a

01:06:02   sudden,

01:06:03   Well, I mean, yeah, I mean, again, one of those things I

01:06:07   I don't want to touch with a 10-foot pole, but right it only works as a joke though if everybody sees

01:06:12   the real Ben Ghazi scandal the way I do as a completely overblown hype whereas if there's you know

01:06:19   20% of the people listening to the show think it's actually an outrage and a tremendous scandal then the you know

01:06:26   It has the wrong effect because it makes it seem as though you know

01:06:30   The Ben gate is Bend gate is a real issue, right? No, that's exactly it and I I'm

01:06:36   That's the same reason I've been using Ben gate as well

01:06:39   Right, even though it sounds like Ben gate, which is my name

01:06:43   When he's not bad, but yeah, right

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01:09:31   So I think we've been a little all over the place on the watch, but I've been very,

01:09:37   I personally have been all over the place. I've written four pieces now that have,

01:09:42   you know, there's kind of an arc where I'm more opposed all the way to,

01:09:47   I think this is really ambitious and potentially the future.

01:09:50   But you've only written, you've written the one, you've written a couple, you've linked to a few

01:09:56   pieces with like a line or two of commentary. Like I think I speak for a lot of your readers

01:10:02   that is curious on like the group or exposition about the watch.

01:10:05   Yeah, I'm still working my way on that. I thought I'd have something a week ago,

01:10:10   a second follow-up, and I'm still, it's still like in the liquid state. It's not solidified.

01:10:15   But you know this you know it's why I do the show it so I can talk my way through it

01:10:19   Bottom line here. We are an hour and ten minutes into the show. Here's thesis statement thesis statement is

01:10:25   Apple watch I believe is

01:10:29   intended to be a completely standalone platform for compute personal computing and

01:10:35   Its relationship to the iPhone. This is not wholly original

01:10:40   I've heard other people say this you know speculate, but I'm gonna try to put it very clearly its relationship to the iPhone

01:10:45   is very much analogous to the original iPhone's relationship to iTunes running

01:10:51   on your PC or Mac. Right? And when you got the first iPhone in 2007 you couldn't

01:10:55   even activate it without iTunes. You had to actually plug it into your computer

01:10:59   and run iTunes and activate it on AT&T through your Mac. It was, you know, that

01:11:06   they just didn't have the full stack. They didn't have everything ready to go

01:11:11   for it to be the standalone device that it is today where you can be a fully functioning

01:11:16   iPhone user with no other computer products or you know you could just use it with an iPad and

01:11:24   never pair the two and your backups go to the cloud your software updates come over the cloud

01:11:30   and you never never connect it to a Mac or PC. I think that's the relationship the watch will

01:11:37   will have with the phone where eventually it will do full Wi-Fi and eventually it will

01:11:42   have a SIM card and will do cellular networking.

01:11:48   That doesn't mean – and again, this comes to one of the topics on ATP.

01:11:52   Like Marco's thing is never bet against the smartphone.

01:11:54   It's a good point that the smartphone is sort of an optimal – it's sort of an endpoint.

01:12:01   Obviously, the size can fluctuate a little bit.

01:12:04   the basic idea of the thing that you can carry in your pocket, don't bet against it.

01:12:09   There were some of us, myself included, who thought that the iPad might grow to be bigger

01:12:13   than the iPhone or at least grow to be the same size, and it's not.

01:12:17   It's super successful.

01:12:18   Tablets are a huge deal.

01:12:20   The iPad is the most successful and it is very successful, but it is not as popular

01:12:24   and not as successful as the phone.

01:12:29   So I wouldn't say that when I say that the watch will be a standalone platform that won't

01:12:33   need a phone. That doesn't mean that everybody's going to ditch their iPhone and just do everything

01:12:37   on a watch. I just think it means though that some people they could that they won't have

01:12:43   a they don't they won't need to carry a phone in their pocket.

01:12:47   So I I completely agree. I've said I actually made the same analogy on a previous version

01:12:55   of exponent where my co-host vehemently disagrees. And we definitely we definitely got into it.

01:13:01   But I think the phone for the watch is an implementation detail.

01:13:09   And I think that's critical to understanding the way Apple, I think, introduced it.

01:13:18   Imagine that Apple had introduced the iPhone and they had said, "Oh, well, you don't need

01:13:22   to manage music on your phone because you can do it on iTunes on the Mac and it will

01:13:26   all sync over," right?

01:13:28   Which is what they did with the iPod.

01:13:31   The problem is that would have, a few years down the line, it would have been so much

01:13:37   more difficult, if not impossible, for Apple to make the iPhone a truly standalone device.

01:13:43   From day one, the iPhone, even though it needed a Mac, it had to be designed as if it didn't

01:13:51   need a Mac in all these fundamental assumptions.

01:13:55   I think it's the same thing with the watch.

01:13:59   You can't build in the assumption the phone is there if you know it's going to be going

01:14:03   away or else you're limiting, you're lowering the ceiling, you're lowering the potential.

01:14:07   And I think the difference from the iPad is this is smaller.

01:14:11   And when it comes to design is all about constraints and what's the controlling constraint.

01:14:19   The controlling constraint when you're at your desk is not size, it's not weight, it's

01:14:26   comfort, it's productivity, it's why I'm sitting here in front of three monitors and

01:14:30   an ergonomic keyboard and a mouse. But when you're moving around, the chief constraint

01:14:38   is portability. And the fact of the matter is, is a watch is more portable than a phone.

01:14:44   So not next year, not the year for that, maybe not even five years down the road,

01:14:47   but 10 years down the road. It's very easy, in my opinion, to see

01:14:54   me carrying a much larger smartphone less frequently because I always have a watch.

01:14:59   I think a complete agreement except I think 10 years is too long and it goes back to the

01:15:06   Bill Gates adage which is probably one of the smartest things he's ever said but that we as

01:15:12   tech people perennially vastly overestimate how much we can do in one year and underestimate how

01:15:23   how big the changes will be in 10 years,

01:15:26   over and over and over every year, every decade.

01:15:29   I think 10 years is too long.

01:15:31   'Cause just think about the phone, man.

01:15:32   The phone is only seven years ago

01:15:35   that we had the original.

01:15:36   When did the phone come completely standalone?

01:15:40   When was it that, I guess it was probably with iCloud.

01:15:43   So that would have been-- - I think it was I was four.

01:15:45   Was it or?

01:15:46   - It would have been, I think 20.

01:15:52   - The iCloud was, I thought it was 2011.

01:15:55   'Cause it was Steve Jobs' last keynote.

01:15:57   - Yeah, Steve Jobs' last keynote, right.

01:15:59   Right, right.

01:16:01   He did the original iPad introduction in 2010

01:16:03   and then he made a surprise appearance

01:16:05   at the second iPad event

01:16:07   when he was technically on medical leave.

01:16:09   And he was like, "I didn't wanna miss this."

01:16:11   And then he was at WWDC

01:16:13   and that was the last time we saw him.

01:16:15   So 2011, so that was four years

01:16:18   from when the original iPhone came out.

01:16:22   And at that point, it was four, call it five years,

01:16:26   give iCloud a year to bake, I guess.

01:16:28   But within five years,

01:16:29   the iPhone was a wholly independent platform.

01:16:32   And it won't just be like one switch flipping.

01:16:36   It's do this, then that, then this, then that.

01:16:40   I mean, the original iPhone,

01:16:41   it's like I was thinking about it

01:16:42   in the context of the watch.

01:16:43   It was crazy how little it did on its own.

01:16:46   You had to sync your calendars and contacts through iTunes.

01:16:50   So if you wanted to have the same contacts on your phone

01:16:53   and computer, you had to keep connecting it to iTunes

01:16:58   and syncing there.

01:17:00   I mean, it was crazy.

01:17:01   So part of that is tech.

01:17:02   I think with the phone-- and you're right, a lot of it

01:17:04   comes-- the constraints are different.

01:17:06   With the phone, it was more about just

01:17:10   that there was just so much software that

01:17:12   needed to be written before they could do it.

01:17:15   And being able to just depend on iTunes in the meantime

01:17:20   just was a very helpful crutch. Because it was worth launching

01:17:24   when they did. It would not have been worth waiting another two

01:17:28   or three years until they had more of that. That whole stack

01:17:31   ready to go. And with the watch, I think it is more engineering,

01:17:35   right? Why doesn't it have a SIM card? I think I simple I think

01:17:39   battery life and size size is an issue too, though.

01:17:42   Yeah, there is a Samsung one I think that has a SIM card. But

01:17:45   yeah, it's huge. And it's way bigger. Right. But the thing is

01:17:48   like, yeah, I would. One thing that you've learned over the years is never bet against

01:17:53   miniaturization and never bet against Moore's law. And I think you in the antenna, because it's

01:17:58   analog, like there's a lot of real challenges there. But at the same time, like, if you've

01:18:03   learned anything in tech, it's don't bet against like, don't bet against that kind of stuff. And

01:18:10   the this question, this is the thing that I came up with, you know, with James on my podcast is,

01:18:17   You know, where do you draw the line on what features it's okay to ship with and what features it's okay to ship without?

01:18:23   And the way I draw the line is not by looking at the technical implementation of the feature,

01:18:33   but the impact it has on normal people's lives.

01:18:36   And what I mean by that is when the iPhone came out, people were already plugging in their devices into their computer every night.

01:18:45   Those devices just happen to be iPods.

01:18:47   So Apple was just asking you to keep doing the same thing you were always doing.

01:18:52   But with a different device.

01:18:53   Right, exactly.

01:18:54   And so even though it was, if we look back and think, "Oh my gosh, I had to plug in my

01:18:58   phone to sync my calendars.

01:19:00   It sounds ridiculous today."

01:19:02   It did not sound ridiculous in 2007.

01:19:05   And so that's why I think it was okay to not have that feature because you weren't putting

01:19:10   a burden on people.

01:19:11   You weren't making people's lives more difficult.

01:19:14   And I think the same thing applies to the watch. Yes, it would be, you don't need to

01:19:20   wait for the watch to have its own cellular stack because people already have their phones

01:19:25   with them. You're not saying, "Oh, up to today, you have not been carrying a cellular device

01:19:30   in your pocket, but now you need to carry it with you to use the watch." No, people

01:19:34   are already doing it. The watch is only making their lives better.

01:19:38   And I think I agree with you, and I think it will be shorter than 10 years. In seven

01:19:42   say in 2021, we'll look back and say, "Man, I can't believe I carried a phone in my pocket

01:19:49   every single hour of every single day." Yeah. Let's go back to the Newton era, like 1993,

01:20:00   '94. Most people, very few people had cell phones. The cell phones that were out, it was the famous

01:20:05   Wall Street one. It's more like a brick. Let's say Apple comes out with some kind of digital watch

01:20:11   in 1993 and the watch does something cool. I don't know. You know, forget the details, but it's, you

01:20:17   know, but nobody has a habit of carrying a cell phone at the time. And then they say, oh, and to

01:20:22   make this watch work, you have to carry this four or five inch rectangle in your pocket with you

01:20:28   everywhere you go. And then everybody be like, well, that that seems stupid. I don't want to

01:20:32   carry that, you know, here's a five ounce thing that that is very expensive itself, and you have

01:20:38   you have to carry it around with you everywhere you go.

01:20:40   You're asking people to do something that is stupid, right?

01:20:43   They're never gonna do that.

01:20:45   Like you're saying, I completely agree

01:20:47   that they can piggyback off the phone now

01:20:49   for things like cellular and Wi-Fi connectivity

01:20:54   because everybody in, you know, the target audience

01:20:57   of people who already carry an iPhone with them

01:20:59   everywhere they go is sufficiently large.

01:21:02   - Right, and I think it's really interesting too,

01:21:06   just kind of a slight segue, I guess,

01:21:09   is one thing I haven't done in any of my columns,

01:21:12   at least not as explicitly or in the podcast,

01:21:15   is like, why, what if we jump forward?

01:21:20   Like, how do you think our tech lives

01:21:24   will look like in 2020?

01:21:26   - I don't know.

01:21:29   I'm, you know, but I'm very intrigued

01:21:32   that they think this is the way it's gonna go.

01:21:34   you know, that it's mostly, you know,

01:21:36   that I think that they're predicting

01:21:39   that a lot of it is gonna go to the wrist.

01:21:41   I think it's gotta be a lot about voice input, you know,

01:21:46   we're gonna be talking to our wrist a lot.

01:21:49   I mean, I don't see any other way that you're going to,

01:21:52   I don't see how they're ever gonna invent anything

01:21:54   that would let you type on a piece on something that small.

01:21:57   - Well, I think what's interesting though is,

01:22:00   Well, first off, if you were to tell someone in 2007 how little we talk on the phone today,

01:22:07   they might not believe you. So I think the voice thing in general, as far as communication,

01:22:13   will go ways. Do we need Siri for text input then because we text a lot now?

01:22:17   I think what's interesting about the phone is if you track everything you do in a day,

01:22:26   how much of it are you actually inputting anything?

01:22:29   Like how much of it is gathering information

01:22:32   or absorbing information as opposed to actually

01:22:36   putting something in?

01:22:37   And I suspect, at least I tried to observe myself for a day,

01:22:40   it was really hard, like it was shocking

01:22:42   how many times I pulled my phone out of my pocket.

01:22:45   A lot of it is just checking,

01:22:47   it's just checking stuff all the time.

01:22:49   And all, like that's, it's not just that

01:22:53   you could do that on a watch,

01:22:55   It's that it's better on a watch and I think the for me the vision is the watch you have something with you all the time

01:23:02   and the things that that's with you all the time is

01:23:05   is where the radio should be it's where the connection should be and

01:23:08   It's where kind of the hub should be and yes. I'm sure we'll still have smartphones

01:23:14   I don't think they're going away just like we still have computers

01:23:16   but I think it's gonna be more it's gonna be more about the screen and more about

01:23:23   And that's why I think the iPhone plus is the future and it's gonna be more dedicated to doing specific tasks as opposed to

01:23:29   Being everything the end all the end-all be-all right

01:23:35   I

01:23:38   think that

01:23:40   There's a lot of

01:23:42   Things that you just never gonna be done on the watch, but that's fine because there's still things that

01:23:46   Never is maybe a stronger word, but that you're almost never going to do on your phone

01:23:52   Right? Like if you have to write, if you're a graduate student, you have to write a dissertation,

01:23:57   you're probably not going to do it on your iPhone, even on an iPhone Plus. Although it's a lot more

01:24:01   plausible now than it was before. Well, you're never going to do that on your watch. You're

01:24:05   never going to write articles on your watch. You're not going to read articles, you know,

01:24:10   like somebody like me or you writes a thousand word essay on the watch or whatever new product

01:24:16   comes out in five years. You're not going to read it on your watch. Although you might have it read

01:24:20   to you by Siri, you know, that, that, you know, over Bluetooth, but you're not gonna

01:24:25   actually read it visually like that. But there's, like you said, there's an awful

01:24:31   lot of things that you do read that are, you know, eminently readable and fiddable

01:24:35   on a screen that size. Well not just that, but this is where continuity, I think, is

01:24:39   particularly interesting. Because if, if the watch is always your first window

01:24:43   into stuff, your first encounter with something, if you, if, if it was totally

01:24:48   seamless for you to immediately transfer that to a more suitable device and not have to muddle around

01:24:55   with syncing and all that sort of stuff. You just flick it over or something and now it's on your

01:24:59   iPhone Plus or you want to type something so you put it over on your Mac. Now, I think that's a

01:25:05   critical component. Now, a watch being the center makes a lot more sense if transitioning content

01:25:13   to more suitable devices is is totally frictionless and totally easy. I'm sure continuity will not be

01:25:19   there this year. But what what what state will continuity be in in in five, five years?

01:25:25   Yeah, they are they keep using the word personal. And they used it on stage. They

01:25:33   reiterate in the website. It says it here Apple Watch. This is from Apple's website,

01:25:36   right in the overview. Apple Watch represents a new chapter in the relationship people have

01:25:41   with technology. It's the most personal product we've ever made because it's the first one designed

01:25:47   to be worn. I do I think that you know that I don't think they use words like that lightly. And

01:25:54   I think that they mean it that we're going to have the way that we have I think I at least I do

01:25:59   personally I have more affection personal affection to my iPhone than any other product. And more than

01:26:06   the iPad, certainly more than the iPad and more even than the Mac, even though I started as a guy

01:26:15   who most of it. Ten years ago, I felt like I wrote more about Mac than I did Apple. I never spent a

01:26:22   lot of time at during firewall writing about the iPods. I mean, I did, but it was never as much

01:26:27   interest to me as the Mac, even as the iPod grew to dwarf the Mac in terms of its financial relevance

01:26:33   to the company because it just wasn't what engaged me. Whereas the phone does. Right now I think I

01:26:39   write and think more about the phone than I do the Mac, even though I do all my writing and stuff on

01:26:44   the Mac and I still love the Mac. But it is there is something about the fact that it's with me all

01:26:49   the time. And it's that first, you know, first responder for my attention, hey, I'm bored, give

01:26:55   me something to do is the first thing I do that it's it is, it is more personal. And something on

01:27:01   on your wrist that you just have to twist your wrist to look at is another step up in

01:27:07   being a personal relationship with technology from the phone. And I don't, you know, I think

01:27:13   that they are, they're not, that's not, those words aren't empty. I think they really mean

01:27:17   it. And I think it's based on their own, you know, usage internally of the thing.

01:27:22   And I think it's a reason to think why this will be a very successful category for Apple.

01:27:28   because every time technology gets more personal,

01:27:33   like laptops are more personal than desktops.

01:27:37   And I don't think it's any surprise

01:27:39   that Apple's done better in laptops

01:27:41   than they ever did in desktops.

01:27:43   Tablets are more personal than Macs,

01:27:46   and they've done better in tablets

01:27:48   than they ever did in PCs.

01:27:51   And phones are more personal yet,

01:27:53   and that's their most successful product ever.

01:27:55   I do think it's totally reasonable.

01:27:57   I get where Mark was coming from. I think as far as like a worldwide phenomenon, like the device

01:28:02   everybody will have, I think that like, there's still the delta between a watch and a phone,

01:28:11   I'm not sure will ever be great enough to make it a universal, like universally it will surpass the

01:28:17   phone. But I think for a certain type of customer, again, primarily an Apple customer, you know,

01:28:24   as in what I mean is someone who tends to have a higher income, tends to have a higher willingness

01:28:29   to pay, tends to be more focused on the experience of using something. And again, I say that in the

01:28:35   gentlest way possible, so no email please. It's a very compelling market and one that I think

01:28:42   each time you make this stuff be more personal, Apple's addressable,

01:28:47   Apple's percentage of the addressable market increases.

01:28:51   Yeah, no, I totally agree. And that's a very keen observation on the shift, you know, as the industry shifted from desktop PCs to laptop PCs, it coincides with Apple rising out of the decade long malaise of PC markets here.

01:29:07   Oh, for sure. That's, it's a great point. I actually, I just said it, but I didn't quite make the connection either. I mean, the iMac, everyone looks at the iMac, but even then, the iMac was the first computer people were willing to put in the living room.

01:29:20   But once it came to actually carrying something around, no, it made a big difference.

01:29:26   That's really interesting.

01:29:27   Yeah, iMac was just like a stop the bleeding thing and it wasn't a get people who'd never

01:29:34   considered a Mac to use a Mac thing, whereas Macbooks were the thing that really did that.

01:29:40   I keep coming back on the watch and as my belief that it's a true, in its own way and

01:29:45   in ways that we don't fully understand yet because I think they're being, A, they're

01:29:50   on it and they don't they can't really talk about it and B I think that they're

01:29:53   very deliberately being secretive for the next few months because they don't

01:29:57   want to give a competitive leg up to the companies who they think are going to

01:30:02   copy it as best they can as quickly as they can so I do think that they are

01:30:07   being very cagey about some of the details here but I that's one of the

01:30:12   things I'm finding hard to square I'm convinced I don't know nobody at Apple

01:30:15   said we're being pretty we're being secretive because we don't want people

01:30:19   to copy this. But reading between the lines it is sort of what I was told. Not

01:30:24   in so many words but it does seem like it you know in terms of why weren't why

01:30:29   wasn't anybody at the event allowed to try a version using the real software.

01:30:35   Part of it was that it wasn't ready but in 2007 the iPhone wasn't ready when

01:30:41   they announced it. You know some of the apps were just screenshots literally

01:30:45   Like I forget which ones but like like the maybe like the stock widget or something or a calculator like

01:30:51   but but they let a handful of people like David Pogue and

01:30:54   You know probably Walt Mossberg, I'm sure but a few of those guys on you know at January 2007 six months before it came out

01:31:02   They got to play with a you know an iPhone

01:31:05   They didn't hold anything back, you know

01:31:08   And even though some of the apps weren't finished yet and you just tap the app and it showed you a screenshot of what it

01:31:14   would look like, that was what it was going to do and what it was going to look like.

01:31:17   And the apps they showed on stage were the apps they shipped with.

01:31:20   They didn't do that with the watch.

01:31:21   And I think it's a secrecy type thing.

01:31:24   But I don't know how to square that with what I'm about to say, which is I keep coming back,

01:31:28   and I know I told you this offline, I keep going back to the image on Apple's website

01:31:34   of the S1.

01:31:36   It's on, you go to watch, and I think you go to technology.

01:31:39   And you have to scroll down to get to it.

01:31:42   you go to the Apple Watch, you go to explore, you hit technology, and you scroll down and

01:31:47   they show the S1. And they say, here's what they say about it. An entire computer architecture

01:31:55   on a single chip. Massive constraints have a way of inspiring interesting creative solutions.

01:32:00   A prime example is the custom designed chip at the heart of Apple Watch. No traditional

01:32:05   computer architecture could fit within such a confined space. So we found a way to integrate

01:32:10   many subsystems into one remarkably compact module, module, which is then

01:32:16   completely encapsulated in resin to protect the electronics from the

01:32:20   elements impact and where configuring an entire computer system on a single chip

01:32:26   is an industry first and represents a singular feat of engineering and

01:32:29   miniaturization. They mentioned it in the event they're promoting it here. They're

01:32:33   showing it they're showing a guy you know a man's hand holding this tiny

01:32:38   little chip you know I would I know it's an overused frame of reference but a

01:32:44   more or less postage stamp size chip but it doesn't look like a chip there's no

01:32:49   exposed electronics or transistors or anything like that it is encapsulated

01:32:53   and so even though they're being so secretive I feel like that they're

01:32:59   bragging about the s1 and and they're showing it and showing that it's it's a

01:33:04   module suggests so much about how they're going forward. I think it suggests that the thing is a

01:33:10   full computer. It's not meant to be just a peripheral, which I think is what Android Wear

01:33:17   is. And we can come back to that. You know, my understanding of my Android Wear is that it's not

01:33:24   in no way meant in the long run to be a standalone computing device. It's a permanent risk worn

01:33:30   notification terminal for your phone for your Android phone I think that in the

01:33:39   way that in 2007 when they when jobs first showed the iPhone and said and it

01:33:45   runs OS 10 you know and that there was like a you know that the decades long

01:33:49   hey what if Apple made a minute you know stripped down version of Mac OS that

01:33:54   could run on a phone wouldn't that be great well they did it and it was like

01:33:57   blown away that they were able to have a computer that could run Unix on a phone

01:34:02   and with you know OS 10 style graphics and stuff like that fortunately not with

01:34:08   bash installed right I I think that they've taken a suit it's a similar jump

01:34:14   again in the same you know I keep coming back to this that the iPhone is to the

01:34:18   watch what the Mac was to the iPhone I think they've made a similar jump in

01:34:22   and like miniaturization and encapsulation with this

01:34:27   and that it's roughly, in a way that it can be a computer,

01:34:32   it's going to be a computer.

01:34:34   And the modularity of it is what I think.

01:34:37   I really do think that that's the explanation,

01:34:40   and we can get into this when we talk about pricing.

01:34:41   That's the explanation for why would somebody

01:34:43   spend $10,000 on a gold one when two years it's

01:34:47   going to be technically outdated is

01:34:49   that I think that you'll be able to take it in for service

01:34:51   and have that S1 popped out and replaced with an S3.

01:34:55   - Yeah, this is super interesting.

01:34:56   Just one moment on that.

01:34:58   I think the, if I can go back to the Android Wear point

01:35:02   for just a second, and then I think the whole

01:35:05   retail experience and the potential upgradeability

01:35:08   is super interesting.

01:35:09   But I think it's super significant, you highlighted it,

01:35:14   they call the S1 a computer.

01:35:16   Like they, like this is the fundamental point

01:35:20   that has changed where I've changed my thinking and is key

01:35:24   is that Apple makes computers.

01:35:26   They don't make accessories.

01:35:28   The iPod was the exception and this is another computer

01:35:31   and it has to be looked at in that light.

01:35:33   - Yeah, they're not using a different language.

01:35:35   You know, when they call the A7 and A8, all the A line,

01:35:38   they call them SOC, systems on a chip.

01:35:40   And it's a CPU and RAM and I don't know what else,

01:35:43   you know, in one.

01:35:44   And it's more on a single chip than in the PC world

01:35:49   than we ever saw or have seen.

01:35:51   But it's not, you would never call it a full computer

01:35:54   on a chip.

01:35:55   Like they're calling it a full computer on a chip,

01:35:58   which to me makes it sound as though

01:36:00   if you replaced it with a different one,

01:36:02   you'd still have the same screen.

01:36:04   It's almost like turning a watch into like a desktop PC,

01:36:08   like where you could replace your PC and keep your monitor.

01:36:11   Like you can replace the computer in the watch

01:36:15   and keep the gold case and the sapphire display

01:36:20   and the crown and all of your bands that you bought

01:36:23   and you just get a new computer inside.

01:36:25   - I just want, I do want to just acknowledge

01:36:29   that I think Android Wear under the covers

01:36:32   could be standalone from a technical perspective.

01:36:36   I just want, this is so we don't get bad email

01:36:37   'cause people, I've actually been looking into this.

01:36:40   But I think the design, the design is always meant

01:36:43   to be with a smartphone.

01:36:44   let's park that because we're talking about the watch. But no, this is so interesting though,

01:36:49   because this is the thing that people think shouldn't be possible, right? There's always

01:36:54   something that shouldn't be possible, right? And everyone thought that modularity was dead,

01:37:00   right? With MacBooks now, you can't change anything on your own. The phone for sure,

01:37:05   remember when the phone came out and there was no external battery and people were going nuts about

01:37:09   it? Like, oh my God, there's no external battery. And the thinking then was you can never make

01:37:14   something small enough if you have the constraint of making stuff modular and being able to be easily

01:37:21   removed. But what it, you know, I thought, I thought about, last time we talked, I thought,

01:37:27   oh, wouldn't it be interesting if the wearable, if Apple came up and said, oh, it has no screen,

01:37:31   right? That would be like, oh my God, just like the phone. Oh, it has no keys. Maybe the, oh my God

01:37:36   moment here is it is modular. It's a computer. It can be changed out. We've totally like,

01:37:44   We've wept so far ahead here that no, you can't do.

01:37:48   I'm sure no individual could do it.

01:37:49   But if you bring it into your Apple Watch shop,

01:37:51   they'll be happy to do it for 500 bucks or whatever.

01:37:56   Yeah. And it maybe it won't even maybe it won't be offered on the sport edition.

01:38:02   You know, maybe it's only something for the the stainless steel and gold one.

01:38:06   Because why if I say it costs five hundred dollars to upgrade

01:38:12   Well, that's probably too much because if the starting price of the watch is $349, you know, well, let's so let's call it

01:38:18   $250 just to pick a number that's that's not

01:38:21   Painless, it's not pocket change, but it's reasonable if you have a $350

01:38:26   Apple watch you're not gonna pay

01:38:29   250 to get the s1 replaced with an s2 or an s3

01:38:33   When you could just spend 350 again and get a brand new one

01:38:37   Which might actually be a little slimmer and smaller and have an updated industrial design

01:38:42   But if you spent ten grand on an Apple an Apple watch edition

01:38:46   And it's solid gold

01:38:49   and

01:38:50   It still looks great physically on the outside

01:38:53   Because it's unscratched because this display is sapphire and the gold is special hardened gold

01:38:58   You've already spent ten grand on it

01:39:02   would you spend 250 to get to make it faster and have the battery last longer and

01:39:06   Probably you know and again guessing as part of the service. They'll just put a new battery module in

01:39:11   You know because yours has already been through 700, you know recharge cycles

01:39:17   And that's again in this weird way that they are even though it's truly a computer

01:39:24   They're really only comparing it to the existing

01:39:27   High-end watch world there is no they never use the word smartwatch never showed anybody else's they're just acting as though

01:39:34   Android wear and the stuff Samsung's doing that they're just acting as though that stuff doesn't even exist

01:39:40   but in the real

01:39:42   You know high-end luxury watch world

01:39:44   When you buy a ten thousand dollar watch or a five thousand dollar watch you do you do get it serviced every few years

01:39:51   Because as a mechanical device it needs it needs, you know expert attention every couple years just to keep it in perfect working order

01:39:57   It's expected, you know, and it's not free. You don't, you don't, you know, you don't get free service on your your Rolex or Omega or whatever brand watch you have. But you know, if you've already bought, bought it for 10 grand, and you want it to last a long time, a $200 service is, you know, something you don't even bat an eyelash.

01:40:15   And what's so interesting about this idea, speaking of Accidental Tech Podcasts, they

01:40:23   discussed it at the beginning of this.

01:40:25   And I think all of them whose opinions I respect greatly were dismissive of the idea.

01:40:32   I think John Siracusa put it as being a nerd fantasy.

01:40:36   Which in some-

01:40:38   It is, he's right.

01:40:39   No, it is.

01:40:40   And it's like, I think the comparison that he would make would be like the X-Mac, right?

01:40:44   Oh, I can't Apple make a desktop computer where I can change the parts and stuff like that, but I think

01:40:49   The reason why I I'm I find this so compelling it'd be very clear like

01:40:57   All the available information that we have suggests that this isn't possible

01:41:02   right that if you are actually making something so small and you want to maximize battery life like the last thing you want to do is

01:41:09   Is make any considerations towards towards modularity?

01:41:12   that said

01:41:14   If you could do this so much about this product comes into queer focus

01:41:21   Right the the the gold edition the idea that they're being like imagine a mad just imagine

01:41:28   Let's play with this. Let's assume as possible imagine in ten years, right?

01:41:33   Oh, you have a first edition, right and it's not a first edition

01:41:38   Like I have the first iPod where it's nice that it sits on my desk

01:41:41   There's no way in the world actually use it

01:41:43   But you have a first edition and you're still wearing it like oh you got one of those back in the day

01:41:47   I got so I have a my I have one Swiss watch

01:41:49   it's a it's a wedding present from my in-laws like a very traditional sort of wedding present and

01:41:54   It's a it's a Mont Blanc

01:41:57   It's so they make pens, right?

01:41:59   But they got they used to make watches like in the 1800s and then they stopped and they got back into watches

01:42:03   I like the first one they made when they came back and like I

01:42:06   I feel very proud of that fact that I have their first one when they came back on the market.

01:42:11   Imagine if that was a selling point for this watch or there was different editions and different

01:42:21   designers and the value of the fashion, the value of the design, if you know it's timeless, used,

01:42:32   not making a pun there, but if you know like it's something that is not a throwaway object,

01:42:37   that just completely tilts the table when it comes to the importance of fashion, the importance of

01:42:43   design, the importance of all this untangible stuff that Apple specializes in. And it's like

01:42:50   flipping the old PC market on its head. The way Apple was hurt before is because they couldn't

01:42:54   keep up on all the component parts, but now if they were really so far ahead, it actually

01:42:59   accentuates their biggest strengths. Yeah, I totally agree. And before we move on, I

01:43:07   will say I know from corrections from what I've speculated on Android Wear, that Android

01:43:12   Wear devices, they do have gigabytes of local storage. They do have a full app SDK for running

01:43:19   standalone apps, but there aren't many apps yet, but I guess they're coming soon. And

01:43:25   I think it therefore can at least, if not today,

01:43:29   is already as planned, you know, without any kind of,

01:43:32   oh, now we're gonna start doing more stuff like Apple,

01:43:34   like things like playback of podcasts over Bluetooth

01:43:39   or something like that.

01:43:40   It seems like it's already planned for that.

01:43:41   But to me though, I'm just guessing though,

01:43:44   that if you run any kind of like a benchmark or spec

01:43:47   on an Android Wear device today

01:43:49   versus the first Apple Watch that we see next year,

01:43:53   I think we're gonna be blown away by the difference

01:43:55   and computing performance that they've put into the watch.

01:43:57   - No, and this, I think this is really,

01:43:59   this is key, 'cause like, remember Steve Jobs said

01:44:03   the iPhone is five years ahead of the competition.

01:44:05   And it turned out it actually was five years

01:44:07   ahead of the competition.

01:44:08   It was around 2012 that,

01:44:10   that Android, you know, really caught up.

01:44:14   I mean, obviously you and I certainly feel that

01:44:17   from an experience standpoint, the iPhone is still ahead.

01:44:19   From an app standpoint, I would say they are

01:44:21   as far as quality of apps, but from a, you know,

01:44:25   - Are they in the same ball park?

01:44:26   - Right, exactly, exactly.

01:44:27   And-- - It took about five years.

01:44:29   - And I think there's, no, I think the S1,

01:44:34   like right now it's arguable that Apple's

01:44:36   greatest strength right now is chip design,

01:44:38   which is pretty amazing.

01:44:40   And the S1 is right in their wheelhouse.

01:44:43   And this is, actually there's one other point

01:44:44   that I, that I think is really interesting.

01:44:47   It goes back to Ben Gate, actually.

01:44:48   A lot of people are saying about the iPhone,

01:44:52   they said it before even Ben Gate happened,

01:44:53   like why can't they make it just a little bit thicker

01:44:55   and give us more battery life and,

01:44:57   or back to the IMAX, why are the IMAX,

01:45:00   why are they making them so thin,

01:45:01   like it's sitting on your desk?

01:45:03   And John Siracusa, who we love,

01:45:07   everyone, our listeners all love,

01:45:09   but maybe his all-time favorite article that he's written

01:45:12   is something like "Don't Stop Thinking About Tomorrow"

01:45:15   or something along those lines.

01:45:16   And basically he says that when we look back,

01:45:21   it seems like there's these breaks, right,

01:45:23   we made these big leaps, like we leapt to the iPhone, all this sort of stuff.

01:45:27   And he's like, but those leaps don't happen by chance.

01:45:31   They happen because there's just constant pushing, constant iteration, constantly figuring

01:45:36   things out.

01:45:37   And what I think is really compelling about the watch is the reason if Apple has clearly

01:45:44   done something very impressive from a technical perspective, if they've even done even more

01:45:49   than seems possible and done this sort of modularity sort of approach, the reason they

01:45:53   can pull this off is because they've been making phones so thin. What I mean by that

01:45:58   is they've been pushing the envelope on things like thinness and on things like efficiency

01:46:02   and on things like battery life. And all that pays off when they're capable of making something

01:46:12   like the watch that is already way smaller than anything else on the market. We don't

01:46:18   know the battery wife, but I have to assume that Apple will, they want to make sure it

01:46:25   lasts a full day before they say anything. But that's the net result of all this stuff.

01:46:31   That doesn't happen by accident.

01:46:33   Right. And I think that it's tough for a lot of people in the tech world, that tech-focused

01:46:42   mentality to wrap their heads around this because they've always thought that they still

01:46:45   think of Apple as a company that doesn't value performance as a top priority that

01:46:52   they you know they're a design company and then you know max you don't get a

01:46:55   lot of bang for your buck performance wise with a Mac which hasn't really been

01:47:00   true for years but put that aside though that people just underestimate that I

01:47:05   just don't think that they they get their heads around this about like you

01:47:08   said like just how much Apple as a semiconductor company is leading the

01:47:12   the industry in terms of that where they're interested making things smaller and more

01:47:18   efficient.

01:47:19   And I thought it was so telling that when a non tech ran their initial benchmarks of

01:47:24   the new iPhones, that in most of the benchmarks, the iPhone five s is still top five, sometimes

01:47:31   third, just only behind the iPhone six and iPhone six plus a year later, you know, in

01:47:37   a very competitive industry, I mean, arguably the most competitive industry in all of tech

01:47:42   everybody you know you know clawing at each other and considering that the

01:47:49   other guys are the ones who who more directly address the spec driven market

01:47:55   and that they still don't have phones that compete with the iPhone 5s or that

01:47:59   surpass it at least I think that's so super telling about how just how

01:48:06   potentially remarkable the s1 could be and who knows maybe we're making fools

01:48:11   of ourselves and that the specs of the S of the Apple Watch technically aren't going to

01:48:15   be that remarkable compared to app Android wear and other things you know who knows maybe

01:48:20   you know we're completely wasting our time and and fantasizing about this but I can't

01:48:26   help but think that they would not draw attention to it if it weren't something they were super

01:48:29   proud of what not just that but this is this is like this is this should be the gating

01:48:35   factor on whether they should wait or not because to want something that is underpowered,

01:48:41   that does not enable a platform, would be a mistake because if you start out with, and

01:48:50   this is what I so clearly got wrong and why I almost felt an urgency to correct myself,

01:48:58   is if you start out with just the mental model that this is an accessory, like the iPod was

01:49:05   as an accessory, you're making fundamental,

01:49:10   you're putting fundamental constraints on the product

01:49:13   that will determine the product's trajectory

01:49:17   in the long run, right?

01:49:18   It's like Windows 8, right?

01:49:19   Windows 8 couldn't fully break away

01:49:22   from being a desktop keyboard and mouse

01:49:25   and driven sort of thing,

01:49:26   and that just handicapped everything else,

01:49:28   and that's an extreme example,

01:49:30   but if you can't just flip a switch and say,

01:49:33   "Oh, software developer, you designed an app for the watch assuming the phone would be

01:49:39   there, but now it's not there." That's very hard to overcome. That's going to be a challenge

01:49:45   for Android Wear. Android Wear is very explicit right now. You have to have an accompanying

01:49:51   smartphone app. That's only possible if the S1 is actually a real computer. That's only

01:49:58   possible. And so I presume it is. I think the modularity, if

01:50:02   you can replace it is definitely an open question. But man, it

01:50:05   would be unbelievably compelling. If it was replaced.

01:50:08   Yeah, it's two, I guess it's two different issues. There's the

01:50:10   first is just how much is this really a technically impressive

01:50:14   computer? I think that's a sure thing. I would I'm going to eat

01:50:18   my hat if it's not a blowaway technical device at a computer

01:50:22   engineering level. Is the the idea that a year later, two

01:50:26   years later, you could take it into the Apple store and get it

01:50:29   replaced with an upgraded version it that might be just

01:50:33   pure fantasy on my part, even if the gold ones do cost 567 $10,000.

01:50:37   Even if they do, it really might be the case that you you you

01:50:42   know, you've, okay, thanks for your $5,000. But two years from

01:50:45   now, you're going to need to spend another 5000 to get a

01:50:48   better one. It might be I would, you know, I don't think that's

01:50:50   out of hand. But I do think though, it's way more

01:50:54   compelling if if it's not let me do the third sponsor and it would remind me I'm

01:51:00   gonna here's the topic that I want to come back to after this is if it is

01:51:05   modular in terms of being replaceable would Apple tell us that in January or

01:51:12   would they wait a year before they say that so think about that think about

01:51:17   that and we'll come back to it but right now I'll thank our third and final

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01:54:25   thanks to need. All right, I told you to remember what I what

01:54:29   did I want to ask you?

01:54:30   If if when they introduce if it is modular, it's modular, will

01:54:35   say so right will they tell us absolutely absolutely i mean like i said if it's modular it

01:54:41   changes the entire perception and conceptualization of what this of what this is right it goes it

01:54:50   changes from being another a very pretty and and cool yet disposable item to being like something

01:55:00   meaningful, right? The way a watch is meaningful, like a high-end watch is meaningful.

01:55:06   I think it's difficult to overstate what a difference that would make in the way people

01:55:17   think about the entire category and the entire watch. By the way, that would just pull the rug

01:55:25   out from all the Android Wear devices in just a pretty unbelievable way. I mean, it would

01:55:31   very clearly Apple would be setting themselves up as, "We are the Swiss, but with a relatively

01:55:40   swatch all the way up to Cartier. And you guys, you're the Casios of the market," or

01:55:49   or stuff like that.

01:55:50   And no, of course, that would be a central,

01:55:54   a key point in my opinion.

01:55:56   - Yeah, I think so too.

01:55:58   The only reason I could think that they wouldn't

01:56:00   is if they're unsure.

01:56:01   If it's like that's their hope and that's their plan,

01:56:04   but they don't wanna promise it in advance

01:56:06   because what if something comes up

01:56:08   and the way that they wanna make the S2,

01:56:10   it's not socket compatible with the S1.

01:56:17   Yeah, well, I think the S2 is already on the drawing board at least. And not just that,

01:56:25   but it's the first edition that's going to have the biggest battery life challenges,

01:56:29   that's going to have all these sort of things. And like, for example, to make something modular,

01:56:36   even if it has to be done by a technician, right? To make anything modular, you're making some sort

01:56:41   of trade-off in space in particular. Space is the biggest one by far. And that is such a massive

01:56:48   constraint right now that if they're willing to make that trade-off in version one, they're only

01:56:53   going to make that trade-off if they're... They're not going to do that for optionality. They're

01:56:57   going to do it because they think there's a payoff there. And ways that it would work,

01:57:01   if you just think, "Wow, it just sounds so crazy." It just sounds so crazy because Apple's the

01:57:05   company that famously got scorched, like you said, for not having a replaceable battery,

01:57:09   user replaceable battery.

01:57:11   But you can replace your battery.

01:57:13   I'll just point out, you've always been able

01:57:14   to replace your battery in your phone

01:57:16   by taking it into Apple and having a,

01:57:18   it's just that you can't pop off the back yourself

01:57:20   and put a replacement in.

01:57:21   It's not user-swappable throughout the day,

01:57:24   but it is certainly modular in terms of if your battery is,

01:57:28   if you got a bad battery or an old battery,

01:57:30   you can go in and get a new one.

01:57:32   But the way that things evolve,

01:57:34   the way computers evolve, certainly personal computers,

01:57:37   is they get smaller and more efficient.

01:57:40   So as the S1 gets smaller and more,

01:57:43   or the S series gets smaller and more efficient

01:57:46   over the years, there's always gonna be room

01:57:48   in your original 2015 Apple Watch

01:57:52   for the new smaller S.

01:57:53   - Right, exactly, exactly.

01:57:54   'Cause the future, like the next version

01:57:57   of the physical hardware could be smaller

01:57:59   and that's not a problem for the original.

01:58:01   'Cause the original, if you presume that

01:58:03   this will be the biggest it ever is,

01:58:06   which is an exceptionally reasonable position to take.

01:58:09   - Right.

01:58:10   Certainly the thickest it's ever going to be.

01:58:12   - Right.

01:58:13   - I mean, 'cause that's certainly one of the knocks

01:58:15   against it from a watch person's perspective,

01:58:18   specifically called out by Ben Clymer of Hodinkee,

01:58:20   that it does sit a little high on your wrist,

01:58:23   and therefore, the issue with a watch

01:58:25   that's physically thick is it's,

01:58:27   your shirt sleeves might get caught on it.

01:58:29   And it would leave room, if I'm correct too,

01:58:34   that if there is a swappable strategy, you know, an upgradeable strategy that

01:58:38   they're going to do the battery along with the S1 because batteries, you know,

01:58:42   deteriorate over time and they're expressly one of the few things they're

01:58:46   telling us already is that you will need to charge it every day. So it's going to

01:58:50   go through a lot of, you know, if you use and like your Apple Watch you're going

01:58:55   to go through close to 365 upgrade, you know, battery cycles a year that they'll

01:59:01   do that too. But then if the S1 shrinks a little every year, then they can make the

01:59:05   battery a little bigger.

01:59:06   Well, not just that, but battery technology, unfortunately not fast enough, but it does

01:59:10   improve regularly. Just a side note, I think one of the other things that changed my mind

01:59:19   about the iWatch that needs to be more, not less, is the reason we... An iPhone was terrible

01:59:27   at battery life compared to what was on the market. People couldn't believe, "Are you

01:59:35   going to really charge your phone every night?" But people did it because it was so much better.

01:59:42   And I think that's another reason to presume that Apple wants the watch to do so much more,

01:59:50   that it's so compelling, that you will put up with charging. The way to overcome charging

01:59:55   every night is to not to make a watch that lasts for two weeks because that's impossible.

01:59:59   The way to overcome it is to make it worth the trouble.

02:00:02   Right. Of bringing an extra adapter and everything.

02:00:06   Right. So what do you think the retail experience, I mean, especially if there's changing batteries

02:00:11   and or changing processors?

02:00:13   Well, I think it starts, let's take another step back and hit on another topic from the

02:00:18   ATP recently, which was wait a minute, isn't this an apple like like the app and and you

02:00:26   know, it was one of Marco's lines and but I've seen this all across the web that the

02:00:32   the what we think of is the Apple way to do it is to make one Apple Watch the first year

02:00:38   and it would be compelling to everybody men and women. It would be let's you know, let's

02:00:45   to split the middle instead of 42 and 38 millimeter, let's call it 40 millimeter, appealing to

02:00:51   men and women, possibly even one color and one type of band and that's it.

02:00:58   And then maybe over years, it would maybe the product line would grow.

02:01:02   And that is, you know, and it would be, you know, an aluminum and glass type thing that

02:01:05   sells for 350 bucks, a price that all existing Apple customers can afford.

02:01:13   this idea of selling what I think are going to be $1500, $2000 stainless steel ones and

02:01:19   $5000, $10,000 gold ones, all of it coming out at once, doesn't that mean that Apple

02:01:25   as we know it is over and it's, you know, whether it's for better or for worse, it's

02:01:29   different or it doesn't even make sense.

02:01:33   And because you know what, the funny thing too is I don't know how many people who listen

02:01:36   to the show are going to disagree with us, but at least on Twitter, when I wrote my piece,

02:01:41   You know, a week and a half ago, two weeks ago.

02:01:43   Man, I mean, a lot of people are like,

02:01:44   "Wow, that was really insightful.

02:01:45   "You really opened my eyes.

02:01:46   "I think you're onto something here."

02:01:47   And then there was an awful lot of vitriol.

02:01:50   I got more negative feedback on that piece

02:01:52   than anything that I've written in a long time.

02:01:55   And this is from people who I think usually agree with

02:01:59   or like what I have to say about Apple.

02:02:01   But there were people who were saying things

02:02:04   like if the gold one even costs twice the $350,

02:02:10   that they're gonna lose their shit.

02:02:13   And I don't think people get,

02:02:16   I don't think, what I don't think people get

02:02:18   is just how different this is

02:02:21   from anything Apple's done before.

02:02:23   It's not right, you're doing yourself a disservice

02:02:26   if you're thinking about it in the context

02:02:28   of how Apple has done things in the past.

02:02:29   - I completely agree.

02:02:31   What's interesting about, it's funny,

02:02:34   I mentioned that my critical of the watch piece

02:02:38   was both very popular, it was widely shared,

02:02:40   hundreds and hundreds of tweets. My recent piece, the one that you linked ... Well, let's

02:02:47   use that one as an example. You've linked to several of my pieces in the past. Usually,

02:02:52   they get a lot of views and they're also shared a lot on Twitter. My one this week has gotten

02:02:56   a lot of views, but it's hardly gotten shared on Twitter at all. What's interesting is I

02:03:01   think it's actually of a piece with the pricing thing. What I mean by that is I think it's

02:03:08   why it's been so hard to articulate. I think what Apple's had a hard time articulating

02:03:11   is that if we are right that Apple is going for this future that is just wildly more ambitious

02:03:23   than anyone I think was originally thinking about. And that might be from a price perspective,

02:03:27   it might be from a style perspective, it might be from a performance perspective, it might

02:03:30   be from an OS perspective. It's almost like people like, yeah, it just doesn't fit with

02:03:38   anyone's model of the way things ought to be. And I think a lot of people just, some

02:03:45   people very strongly disagree. I've definitely heard from them. But I think a lot of people

02:03:49   just they're not, they don't know what to think. It's just like, what? It's just, I

02:03:54   don't know what to think like what's what's going on here. I think the price thing is,

02:03:58   very much of a piece with that. I mean, the idea that Apple would sell, from a tech person

02:04:06   perspective, an identical device for 10 times or more the price of another identical device

02:04:13   just does not compute.

02:04:15   Right. In a way that like, and go back to the car analogy, that you know, like Casey

02:04:20   made the point of Marco that hey you've got a BMW M5 you know that costs triple

02:04:28   what even a regular you know nice car costs and you're still bound by the same

02:04:34   speed limits and even if you want to disobey the speed limits you can't go

02:04:37   that much faster you know then then the speed limit and you know maintain any

02:04:43   kind of you know reasonable safety Marco I believe does not do any kind of

02:04:48   recreational auto racing you know which some people do some people do you know

02:04:52   go on test tracks and stuff like that you know it's but it still is a better

02:04:59   car technically than you know $30,000 accurate or something right it's you

02:05:05   know technically engineering wise it's a better car whereas the computer inside

02:05:10   the Apple Watch Edition is I believe going to be the exact same computer in

02:05:15   in the Apple Watch sport.

02:05:17   - Yep, no, and it goes back full circle

02:05:21   because what Apple is selling now,

02:05:23   and they've always sold this,

02:05:25   but it's always been the frosting on the cake, right?

02:05:29   But now it is the cake.

02:05:30   What they're selling is they're selling the intangibles.

02:05:34   They're selling, like gold,

02:05:36   the idea of gold being more valuable

02:05:39   is a pure human construct, right?

02:05:42   There's nothing like right gold doesn't really have any innate applications that meet that

02:05:49   the reason gold is more valuable is because we as a human race have decided that gold

02:05:53   is more valuable.

02:05:54   It's complete its value is almost completely intangible.

02:05:58   Right when you're in a museum and you see like an old very old like a sword or a weapon

02:06:04   that's made or crafted partly out of gold that's it's certainly not because gold made

02:06:08   for a stronger sword.

02:06:09   A weaker sword.

02:06:10   Yeah, right. It's you're almost if you know, it's a showpiece. It's effectively useless in a real combat

02:06:16   But it's you know, it it signifies something else

02:06:20   And this is I feel like this this in particular and you nailed it by saying it's it's gonna be culture shock. This is just

02:06:27   Completely anathema to the traditional tech

02:06:31   mindset and and and the geek mindset that I think is very

02:06:37   You know is very focused on

02:06:39   Efficiency that's very folk in efficiency in all means not just efficiency in computing but efficiency in using money efficiency

02:06:47   And how you live your life?

02:06:49   Like I want to have a hack where I can I can get this experience for a tenth of the price than I should otherwise

02:06:55   There's something on those lines like Apple like a gold edition watch is the exact opposite direction

02:07:01   It's more expensive for the sake of being expensive and I don't mean that in a people have made the analogy that I am rich app

02:07:07   no, it's it's not it's not that because the the

02:07:12   benefit accruing to the person using that is

02:07:15   At a very superficial level. I suppose I can see the analogy but it's again. I think the the

02:07:22   Classier has to be the luxury the luxury goods market where?

02:07:27   the reality is the rally is

02:07:31   Most luxury items are less functional than

02:07:34   Then the cheaper alternatives

02:07:37   but and famously in the watch world the famously that the

02:07:41   Quartz watch a $20 quartz timex keeps better time than a twenty thousand dollars

02:07:48   Oh, yeah, my watch is is terrible. Like it's always off

02:07:51   and

02:07:54   but just because

02:07:56   Just because it's not tangible doesn't mean it's not real and and what I mean and it's not real and it's not real in a

02:08:04   like

02:08:05   marketing artificial sense like it's people actually care about this and they've cared about it for for

02:08:11   Thousands millions of years like this isn't a fluke that people value that people value by

02:08:19   I'm being very expressive right now

02:08:22   My wife just looked in the window because I look out on the porch and I just totally lost my train of thought

02:08:26   But it's very, people care about this stuff in a very real way.

02:08:32   They've cared about for millions of years.

02:08:34   It's not a fluke.

02:08:35   And what Apple's tapping into is a real thing.

02:08:39   I think, and I'm trying to think about the other I's and T's I want to cross here.

02:08:44   One of the things I want to talk about, and just sort of pure tangent, but Wi-Fi.

02:08:49   The Apple Watch does have some sort of Wi-Fi, but they call it, Apple calls it that it has

02:08:54   Wi-Fi and Bluetooth.

02:08:55   I'm not quoting here, but it's to stay in touch with your iPhone

02:08:59   So I think what they're saying and I asked and could not get a an actual straight answer

02:09:05   But the insinuation was that it's like the back channel Wi-Fi whatever you want to call it ad hoc Wi-Fi

02:09:10   Where it uses Wi-Fi like the way that you can do things now like

02:09:15   Pairing a keyboard with you know

02:09:18   Your Apple TV and stuff that you can do these things without getting it on the network first

02:09:23   Or the way airdrop works right that you can airdrop things to people over Wi-Fi without being on the same Wi-Fi network, right?

02:09:30   They go the negotiation happens over Bluetooth, but then it uses Wi-Fi

02:09:33   Yeah

02:09:34   I think that's the Wi-Fi that it has like it's not that you could go out without your phone

02:09:41   Go to Starbucks and get on Wi-Fi and have iMessages show up and get your email to show up

02:09:47   I don't think but they didn't there they haven't expressly ruled that out

02:09:51   So I have to we have to file it in the big pile of I don't knows

02:09:55   But the strong hint that I got was that it doesn't have like true

02:09:59   Independent Wi-Fi like go get on a Wi-Fi network without outside tethering range to your iPhone

02:10:05   It's a way to use Wi-Fi to extend the tethering range to your iPhone. Yeah, I believe which size makes sense. I mean if if

02:10:12   That that sounds really like a user interface disaster to have to like join random Wi-Fi networks

02:10:20   And if like it's almost like simpler to just say it works with your iPhone

02:10:26   And then once once you can do it all do it all right. It's like right resolution independence, right?

02:10:32   I do think though that that's how the product will evolve though is that before it gets cellular it would I mean absolutely

02:10:39   It makes sense to have Wi-Fi first

02:10:41   It's consumes

02:10:42   You know less battery just like the way the iPod touch as a Wi-Fi only device has always been thinner than the iPhone

02:10:48   It still is even today the two-year-old iPod touch design is thinner than even the iPhone 6

02:10:54   Because it's you know, there's less stuff you have to put in there to just do Wi-Fi

02:10:59   so I think it would make sense for a future version of Apple watch to have I

02:11:04   Don't know what to call it real Wi-Fi support where you can use it as an independent device anywhere

02:11:09   You have Wi-Fi before it even gets cellular networking, but I don't think it's gonna be there this year

02:11:14   That's interesting, but it would be a nice surprise. It would be a nice surprise

02:11:17   Maybe maybe that maybe they're waiting to see what where they can get battery life to

02:11:20   like if if the battery life ends up being sufficient to enable it they will and

02:11:25   If it if like that's a that's a big potential area if they're like what they just can't get the battery to be good enough

02:11:31   Well, we'll cut this and then that gives us an extra hour or two hours. Yeah a repeated strain of criticism of my

02:11:37   Assumption I bank on it that

02:11:41   349 means Apple sport and it's aluminum and what they call it. What are they called ion x-glass?

02:11:47   It's a glass display and an aluminum case. So in other words, it's like iPod

02:11:53   iPhone build quality and materials that's

02:11:56   349 stainless steel is going to be more expensive because the stainless steel just plain Apple watch is

02:12:02   In addition to being stainless steel. It's sapphire display

02:12:06   and stainless steel is not that expensive a material but

02:12:11   it's you know if you look at what stainless steel high-end watches cost

02:12:15   they cost you know four digits not three digits usually or and if they do cost

02:12:19   three digits they're lesser brands and they're close to $1,000 and the gold one

02:12:25   I'm telling you is gonna be a lot of money but a lot of people said well no

02:12:28   no no I you know Apple watch is the one that just is called Apple watch that's

02:12:34   the one that's got to be 349 because it's just called Apple watch Apple sport

02:12:38   Must be a little bit more expensive or something like it's optimized for working out or something like that

02:12:43   And it's made of aluminum to be lighter weight

02:12:45   and

02:12:47   That only the gold ones gonna be more expensive and that if you look at the way they put them on the page

02:12:51   They put Apple watch first then Apple sport or Apple watch sport and then Apple watch edition

02:12:58   What sense would it make to arrange them like that?

02:13:00   I think these people are just the people who think that are just you're just looking at this all wrong

02:13:07   I don't think it's a coincidence that Apple watched the stainless steel one, which I think is probably gonna cost like maybe like $9.99

02:13:14   I don't think it's a coincidence at its first

02:13:17   I think Apple might honestly think it might be the best-selling one

02:13:21   That the low-end one may not be the best-selling in the same way that the iPhone 5c

02:13:27   Did not outsell the 5s last year

02:13:30   it's

02:13:32   That's that's a that's a great analogy to the to the S&C and I think

02:13:36   which one sells more will come back to the modularity question.

02:13:41   I know that would certainly change the product that I would buy.

02:13:46   Just because as much as I like to talk about these intangible aspects and things about Apple,

02:13:54   I'm enough of a geek that I'm not going to spend a few thousand dollars on a device that's going to be obsolete in two years.

02:14:02   Yeah, you know, but I definitely think, though, that people are just there.

02:14:07   They just cannot wrap their heads around the fact that the default model is not going to

02:14:11   be the low end.

02:14:12   No.

02:14:13   And again, I think the phone is the way to look at that.

02:14:14   The default iPhone, the one that they expect most people to buy is the iPhone 6.

02:14:19   No, for sure.

02:14:20   And this gets back to why even I mean, obviously, I harp on this a lot, but you can't understand,

02:14:28   in my opinion. You cannot understand product development at Apple without thinking very

02:14:34   strongly about the Asian market in general and the Chinese market in particular.

02:14:40   So there's that term, let's throw it out there, Veblen, good?

02:14:43   Yeah, some people just drive them up the wall because they're like it's not really a real

02:14:46   construct. I get what they're saying. Basically the idea is when you, in general, the demand

02:14:53   curve works that the cheaper something is, the more it sells. And I think in general

02:14:58   that that's true for everything, right? If an iPhone were cheaper, it would sell more.

02:15:04   But the idea of a Veblen good is that it's a product for which the more expensive it

02:15:10   is, the more desirable it becomes. And this idea certainly, this is the case for some

02:15:19   luxury goods. I mean, I think where the confusion is, it doesn't necessarily mean they sell

02:15:23   more, right? A Hermes bag sells, they sell fewer bags than Louis Vuitton, but they are

02:15:30   way more desirable and they're way more a signifier of status.

02:15:35   And they wouldn't be as desirable if they were priced exactly the same as a Louis Vuitton.

02:15:40   They would not become more popular.

02:15:42   And so there are brands, I think Coach is something like this, where they've vastly

02:15:49   increase their sales. They've made a lot of money. Coach has the whole Coach retail or

02:15:52   a, what's the word, Coach Outlet. It's a different design. All designs are different than actual

02:16:01   Coach stores, but they actually make most of their money there and they sell way more.

02:16:05   There's lines out there building all the time. But it has absolutely, at least in my estimation,

02:16:12   my observation, and again, this is where I was grumpy, my wife distracted me before,

02:16:17   but this is where I owe her a lot.

02:16:19   It's changed what coach means as a brand.

02:16:22   It's become a lot less meaningful,

02:16:25   a lot less of a signifier of anything, you know, of status.

02:16:30   - It's like a mid-class brand instead of a upper class.

02:16:35   - Absolutely.

02:16:35   - Not class for people,

02:16:37   but just where they are competitively with their,

02:16:39   you know, that they're, it's above, you know,

02:16:42   it's more in line with like Michael Kors

02:16:44   or something like that. - Right, exactly.

02:16:45   when I think 10, 15 years ago, it was more on, you know, still the lower end of luxury,

02:16:53   but now it's borderline luxury at all. And that's fine. It's worked out well for them

02:17:00   as I understand it. I think they're doing pretty well. Although I think over the long

02:17:04   run, I think they may be tapering off a bit now. But no, in China and in stuff like this,

02:17:12   And this is like, it's gotten a lot better,

02:17:14   but especially even a year ago,

02:17:16   the analysis of the iPhone in China

02:17:18   was just so wildly off base, right?

02:17:20   Like people, when they had 5C came out,

02:17:22   there was all these articles saying,

02:17:24   "Oh, a 5C is equivalent to the average monthly wage

02:17:27   in China."

02:17:28   That's a completely meaningless statistic.

02:17:31   It means absolutely nothing

02:17:32   because there's so much inequality, right?

02:17:34   And there's so many people that by definition,

02:17:36   there's a lot of people that make way more

02:17:38   than the average monthly salary.

02:17:41   And the iPhone is selling to those people,

02:17:45   and not just that, but in that culture.

02:17:49   And it's the same thing here in Taiwan,

02:17:51   which is obviously, you know, it's Chinese,

02:17:52   but I think a lot of Chinese influenced cultures,

02:17:54   the idea of displaying wealth

02:17:57   is much more socially acceptable

02:18:00   than it is in the West, right?

02:18:02   To like, Mark, go back to ATP,

02:18:04   like we owe them for this episode,

02:18:05   but Marco talked about how he would judge someone

02:18:08   that walked in with the gold phone,

02:18:10   James on my on the podcast with me said the same thing. That's the exact. Yeah, Marco's example was

02:18:15   do you think that next year at WWDC that we will go out for beers at the House of Shields or

02:18:20   something and is anybody in our indie crowd going to be wearing a gold Apple watch and he said I'd

02:18:25   be embarrassed if I had right exactly and which is a reasonable it's totally a reasonable thing to

02:18:30   say and I know exactly what he's talking about but I think I think he's wrong I think there will be

02:18:35   people wearing them and but I also think though that it would be something that

02:18:39   it it might carry a twinge of embarrassment in some contexts whereas

02:18:44   you're saying like in Asia it would not you know that there is it's there's I

02:18:48   you know can't put it better than you did that it's different I wouldn't be

02:18:52   surprised if we see it again Apple probably wouldn't break this down but

02:19:00   maybe they would but like an incredible disparity in the breakdown of

02:19:04   You know, I go almost like an inversion, you know, just totally different chart of how many of which model are selling

02:19:13   Apple watch

02:19:16   Being off the charts different in Asia than in the West. Yeah, well, I would imagine just the color of iPhones, right?

02:19:23   It is almost impossible to see an iPhone 5c or 5s

02:19:27   Here in Taiwan. That's not gold

02:19:30   Like if you see 10 iPhone 5S's, nine of them are gold.

02:19:35   - And that's truly cosmetic 'cause it's not gold gold,

02:19:41   it's gold colored aluminum.

02:19:42   - Right, but that's, and again,

02:19:44   so I guess it's not a perfect signifier,

02:19:45   but the idea of like gold especially is very meaningful.

02:19:50   It's a very, like there's all this stuff about,

02:19:54   it's weird, like the relationships with the Chinese

02:19:57   with money is very, very different than the West.

02:19:59   In the West, especially in America, there's this kind of Puritanist, like, you ought to

02:20:04   be humble and hide your wealth and things like that.

02:20:09   Not at all the case here.

02:20:10   Like, money and the idea of money is everywhere.

02:20:12   Gifts are money.

02:20:13   Like, the idea of giving presents is different.

02:20:16   You give money.

02:20:17   When you go to a wedding, for example, you bring an envelope, you give it to them, they

02:20:22   have someone sitting at the door, they pull out the money, they count it, and they write

02:20:25   it down.

02:20:26   there's a list of how much everyone made and it's like it's there just do it right there like it's

02:20:31   It's it's not it's not weird, right?

02:20:33   You have chinese new year and you eat these dumplings that are meant to look like money like old kind of money

02:20:39   so the idea is you can make more money in the next year like just

02:20:42   It sounds I know it sounds totally bizarre to people in the west to have this like fixation with money

02:20:49   But it's not it's not weird here. It's just like that's

02:20:53   Just it is the way it is.

02:20:55   And and the iPhone absolutely fits into this where people absolutely,

02:20:59   without a question, cannot be disputed, will buy an iPhone simply because it's

02:21:06   the most expensive and it shows that you can afford an iPhone.

02:21:09   And without a doubt, the gold watch will fit in here, even if it is disposable,

02:21:14   even if it can't be replaced.

02:21:16   People will buy a five thousand dollar gold watch because it's a five.

02:21:20   it's a gold watch and even more so it's on your wrist all the

02:21:25   time. People will see it all the time. And that's okay. It's not

02:21:30   frowned upon by any means. It's something everyone aspires to.

02:21:35   Right. There's two types of, in broad strokes, two types of

02:21:39   people who buy an expensive watch. There's a type of person

02:21:43   who buys one and selects one, probably a Rolex because Rolex

02:21:47   is the by far the preeminent brand but and selects not just any Rolex but one

02:21:51   that is gaudium you know maybe diamonds around the bezel or something like that

02:21:55   because they want people to see that they're wearing a diamond bezel Rolex

02:22:01   and then there's the type who might spend even more like $85,000 on a watch

02:22:06   I just saw one on the Houdini that was 85 grand but that it's like a watch guys

02:22:11   watch and nobody no typical person would even notice that it's anything except

02:22:16   other watch people. And it's, you know, maybe in a course of a

02:22:21   week, only one person who would see you wearing that watch would

02:22:24   know what it is. But that to that that person knows exactly

02:22:26   what it is. And it's like a like being in a secret society.

02:22:29   Right. And I think that and so I think the gold Apple Watch is

02:22:32   that's not the second the cold Apple Watch is the first but it

02:22:36   is I've I bought the gold app, but it would be the second if

02:22:39   we're modular. That's what's so interesting about it. Right.

02:22:41   Well, I think the stainless steel is sort of that though,

02:22:45   The stainless steel is because it's stainless steel and a couple people pointed this out. I it's hard to see online

02:22:49   It's the sort of thing that does not photograph. Well, Joe jewelry and never photographs well

02:22:54   But the stainless steel is polished and it is shiny I can vouch for that having seen it and tried one on

02:23:01   And the aluminum Apple sports watch is more like it's I don't know if it is brushed aluminum or whatever the sandblasted thing

02:23:10   Whatever they do, you know like to the brand new iPhone 6, you know

02:23:14   It's it's not a polished shiny material. It's you know, it's it's matte but at a glance

02:23:19   It would be very difficult to see whether somebody is wearing a stainless steel one or the aluminum one and the bands are

02:23:25   To answer a very common question the bands are interchangeable between all of them

02:23:30   now 38 and 42 millimeters take different size bands, but if you buy a

02:23:36   Stainless steel Apple watch you could buy you you know

02:23:39   You can fit any of the other bands on it that are meant for the larger size

02:23:43   Right. I think that's the band thing. Are they going to come with like, it seems to

02:23:51   just on the site that the aluminum watches will be available with a certain set of bands

02:23:56   and the stainless steel ones will be available with a different set. And I get you can change

02:23:59   them after the fact, but when you buy it upfront, are your options limited?

02:24:05   I don't know. I don't think they've answered that yet. And that gets into the retail thing.

02:24:08   We're pushing on the two and a half hour mark here. So it kind of like this is hurry, but I

02:24:13   Do think that the retail question is fascinating in terms of how are you going?

02:24:18   How what are your configuration options going to be and how are they gonna set that up in the store?

02:24:22   And I said it right away. I said right away. I thought man

02:24:25   This is why Angela aren't why a why they hired her and be why she took the job because it's it, you know that there's a clear

02:24:32   enormous challenge ahead to turn the Apple stores as we know them into

02:24:36   to a place where you would buy stuff like this and then how much are they going to keep in stock?

02:24:42   We are going to be able to buy the gold one in an Apple store. Are they going to sell them

02:24:46   at places like tour know, you know, places that that sell, you know, a variety of, you know,

02:24:52   like tour know is a reseller of wristwatches, but you can buy different brands. It's not just

02:25:00   just Rolex or just omega or whatever they you know, would there be like an Apple kiosk in a

02:25:05   or no where you buy the edition. Well here's what's interesting is it was rumored

02:25:09   before the event that Apple was in negotiation was talking with Nordstrom about the Apple Pay

02:25:17   thing but Nordstrom wasn't up on the screen when they talked about it. They talked about

02:25:22   several other retailers but not Nordstrom. Nordstrom actually makes a lot of sense for

02:25:29   a gold watch. Nordstrom plays, they don't play in the very high end but they play in the medium

02:25:34   and of especially when it comes to bags and stuff like that in luxury they sell

02:25:40   luxury goods they don't sell the crazy expensive luxury goods they sell kind of

02:25:44   mid-range luxury and I wonder right they don't have the $85,000 watch but they

02:25:48   might have easily could have a $5,000 right exactly and I think that's that I

02:25:53   wonder if you know I think you linked to or I linked to the the the Robert X

02:25:59   Kringle and I know I know he's a controversial figure but I thought this

02:26:03   particular column was very interesting where he surmised that the gold would mostly be

02:26:08   at jewelers and would...

02:26:09   Yeah, I think he's back on his good meds or something. I thought so.

02:26:13   Yeah, I got some flack for even looking to him at all. But the other thing too is this

02:26:18   is an advantage. I suspect Apple did want to be there by the holidays just because who

02:26:22   wouldn't? But I think this is an advantage to being in the spring where you can't really

02:26:26   rework the stores and then run up to the holidays, right? It's just a mad house in there. Whereas

02:26:31   in the spring there's a lot more latitude to move stuff around.

02:26:36   I don't even think they came close. At whatever point where they thought maybe they would launch

02:26:40   in time for holiday 2014, that was a long time ago, maybe even a year ago. I would be shocked if

02:26:45   even at the beginning of this year there was any hope that they would do it. Honestly, just think

02:26:51   about when did Angela Arndt come on board? I don't think she came on board full-time until June or

02:26:55   May or something like that. Oh, that reminds me of one thing about the retail thing. The most

02:27:01   interesting. I think we talked about this on the last time I was on the show, but one of the most

02:27:05   interesting hires they made was the LVMH guy. And what was interesting about it was that he wasn't a

02:27:09   product guy. He was a channel guy. And by channel, I mean like where your products are sold. So he

02:27:15   helped negotiate like for Tag Heuer, like where Tag Heuer watches were sold, which meant he had

02:27:22   lots of relationships with places like Nordstrom, with department stores. So here in Asia, like it's

02:27:28   It's all department stores.

02:27:29   Like there are no malls per se.

02:27:30   They're department stores where it's one entity,

02:27:33   but within there's like sub shops basically.

02:27:36   And all of these have luxury goods

02:27:38   and they have boutiques and stuff like that

02:27:40   within the thing.

02:27:42   And there's definitely a,

02:27:44   it's a different sort of retail environment

02:27:46   than anyone at Apple would have had experience

02:27:49   with previously.

02:27:51   - LVMH for those who don't know is the Louis Vuitton

02:27:55   - Moet.

02:27:56   - Parent company.

02:27:57   - Moet, Tennessee.

02:27:57   Yeah, Moet Champagne, right?

02:28:00   And then Hennessy Cognac.

02:28:02   But they have a whole portfolio of stuff.

02:28:05   I think they have Dior, they have a whole,

02:28:07   they have a ton of brands.

02:28:09   Super interesting company actually.

02:28:12   But that hire was interesting because of the channel angle.

02:28:17   Right, all of his experience points to the thing,

02:28:23   I can't imagine, I mean, anybody can always change

02:28:26   Course careers, you know change careers course and do something different

02:28:30   But if he's gonna do anything based on what he did at LVMH

02:28:33   It would be getting the Apple watch into other retailers, right? And and this sort of retailers that would sell tag you or watches

02:28:40   And tag he or is not selling three or with the places that are selling tag

02:28:46   You or watches are not selling swatches like three or three hundred dollar watches

02:28:50   So a few more points one. I wanted to hit I think the last one from ATP follow-up, but

02:28:55   John Sirkusa I think he said you know in terms of quantity clearly that the

02:29:04   sport edition is is going to outsell the the gold edition I keep calling him

02:29:08   edition and they call the Apple calls them collections to avoid calling it the

02:29:12   Apple edition so so the Apple sport collection is going to outsell the Apple

02:29:17   edition collection in terms of quantity but I am not entirely sure at all that

02:29:23   in terms and this is in contrast to his take I don't know that Apple edition

02:29:30   collection might be the one that makes the most revenue well the most I think

02:29:34   it it'll be so yeah profit and revenue that it you know that they're going to

02:29:40   it is not just even if it's I think it's gonna sell more than 1% of the unit but

02:29:47   even if it only sells two three four percent I think it's gonna be so

02:29:49   expensive that it will easily be 10 or 20 times more profitable than the $349 one.

02:30:00   Even if it only sells 5% of the units worldwide, that's 50% of the revenue.

02:30:08   No, for sure. The other thing too is, this is another reason to presume that Apple is being

02:30:13   more ambitious than less when it comes to the functionality of the watch. Because if it turns

02:30:19   out to be a watch that you want to wear every day, you're almost certainly going to buy additional

02:30:24   bands, right? And some of those bands are not going to be cheap. And especially if you're

02:30:30   buying a gold edition and you actually use it and it becomes a regular part of your life,

02:30:37   you're going to want to have different bands to make it fit in different occasions.

02:30:42   And what's so Apple about this?

02:30:45   And you nailed this in a wink yesterday.

02:30:49   But you winked an article where I think Amir Ferdy said they

02:30:52   don't want to cannibalize phones.

02:30:54   No.

02:30:54   Not only is it key to Apple's longevity and success that

02:31:00   they are willing to cannibalize their own products,

02:31:02   what's so brilliant about Apple is they have always

02:31:04   cannibalized their products with more profitable products.

02:31:08   And an iPad has better margins than a Mac.

02:31:12   An iPhone not only has better margins than an iPod, it's also way more expensive.

02:31:17   So they're getting more on the top and bottom line.

02:31:20   Like if you're going to cannibalize your products, wouldn't it be great if you could do

02:31:23   with an even more expensive object?

02:31:24   And if you're talking about having a watch that is the center of your existence in five,

02:31:32   six years from now. And oh, by the way, you paid $2,000 or $5,000 for it, plus a bunch

02:31:39   of like $500 accessories. Apple is pretty okay with you using your iPhone just a little

02:31:45   bit less than you did before.

02:31:47   Yeah, one of the things that I'm in terms like you said, are you how customizable is

02:31:52   it going to be when you buy it? I presume if you order it online, it's going to be completely

02:31:57   Customizable you get whatever band whichever one you want. I don't know

02:32:01   but if you go in and they only have a couple of

02:32:04   presets set up that you've you know pick from these to start with and if you want to buy a second band by a second band

02:32:09   one of the things that's interesting to me and I don't know how it's gonna work out is that have you noticed that the

02:32:14   The side of the digital crown like the part if you were gonna press it in the digital crown is colored

02:32:23   To match the band like when I saw one like the smaller size with the red like a rich maroon band

02:32:31   The button wasn't black. It was maroon and match right but only not on all the additions so sport for example

02:32:37   They're all the same. I think that's on the

02:32:39   Edition edition it's it on it. Yeah the edition edition

02:32:44   so that says to me that they're going to be

02:32:50   That they're going to be matched

02:32:53   Yeah sold as a unit with a band and you can buy another band

02:32:56   But then like if you buy like a white band, you're still gonna have the red button on the on the side

02:33:01   Who knows but I did think that was interesting and it jumped out at me and I don't I don't know

02:33:07   Yeah, I'm just I'm looking through this. I definitely only the edition that has different colors the stainless steel is all black

02:33:16   And the sport is always just aluminum. So that's another kind of signifier of which of which one you bought

02:33:22   right, I

02:33:25   Did notice I saw Johnny I've at the event and he was wearing the edition edition, but he had it on a sport band

02:33:35   I couldn't tell I saw him on stage and I also saw him walking by I saw Tim Cook walking by

02:33:45   He was either wearing the the stainless steel one or the sport one again

02:33:50   Like I said at a glance, you know and while he's walking into motion

02:33:53   It was too hard to see how shiny it was

02:33:55   but he also was wearing the sport band which I thought was kind of interesting that they

02:33:59   They both wore the sport band even with the one that I think is gonna be multiple thousands of dollars

02:34:05   That is interesting

02:34:07   I mean you think that they would have at least a prototype in the lap that they could wear even if they weren't you know

02:34:12   widely available

02:34:13   All right. Well, no, they're do they had the bands, you know there for us to in the press to try

02:34:18   You know, we could try on all the bands

02:34:20   You know, but the ones that they're wearing is like they're their actual daily use as they you know test the things

02:34:26   at least at the event they you know wore the

02:34:29   Everyman's watch, you know the band

02:34:32   All right. Last question. I have no watch and I think this is one

02:34:36   I haven't seen anybody talk about but I thought it'd be I thought it's pretty interesting. Where do you think they're going to assemble them?

02:34:42   Yeah, I've gotten this question - I I

02:34:44   It I think it depends on the mod I want to say I don't know it's because especially Apple watch sport

02:34:53   Sport I believe will be assembled in China at Foxconn or similar type place. I don't know that you can sell a

02:35:01   $10,000 watch that is assembled in China. I

02:35:05   Think in the same way that went in my article

02:35:07   I said like one reason I think I called it Apple watch instead of I watch is I watch sounds like a cutesy thing

02:35:12   that costs 350 bucks does not sound like something a piece of jewelry you spend

02:35:16   $10,000 on assembled in China does not compute to me for a five thousand ten

02:35:23   thousand dollar product that and with and it's a big and for all their

02:35:28   comparisons to the watch world that's a big deal where watches are made you know

02:35:32   Swiss made is is the gold standard for you know it's just like a sign of

02:35:40   of quality. It's a badge of honor for the whole country in Switzerland.

02:35:45   And they've certainly obviously been making efforts in this regard. And especially if they're...

02:35:52   I mean, how many pieces... The more that... Especially with this chip, right? Because a lot

02:36:02   of the manual labor when it comes to building a computer is still on the motherboard. And it's

02:36:10   still like, like a lot of a lot of it's like, is done by hand

02:36:13   because it requires very precise, you know, sort of

02:36:16   imitation. And there's been, there's been reports, you just

02:36:20   do a search on Google about like tour of a motherboard factory. I

02:36:22   think AnandTech has done has done some of these before. Like,

02:36:26   it's very, very manual. And that's where the payoff for

02:36:29   having a lower cost labor force pays off in this sort of stuff.

02:36:33   If you're building a the entire computer on a chip that's, you

02:36:37   know, completely wrapped up in resin. That's, by definition, the computer is

02:36:43   being built entirely by a machine. And it doesn't really matter where you run a

02:36:48   machine. It's going to cost, you know, obviously, the operator costs will vary.

02:36:54   But the sort of person that could operate that sort of machine is gonna be

02:36:57   almost expensive in China as they are in the United States.

02:37:03   Right, and I could either see that this is going to be a huge shift, you know, that the

02:37:09   Mac Pro is just the beginning, but that maybe they'll be assembled in the US. And I don't

02:37:15   know, and at the very least, I wouldn't be surprised if the edition is assembled in the

02:37:20   US. Because again, if you're going to sell it for $10,000, they can afford, you know,

02:37:27   the difference in hourly wage for the people doing the actual assembly.

02:37:33   So do you think, and it adds to the entire, like that's an intangible factor, right, which

02:37:37   I think you're driving at.

02:37:39   It means something to have that made in USA label, even to people who aren't in the US,

02:37:48   right?

02:37:49   Yeah, you made it the point to the watch thing.

02:37:51   I guess my question for you is, who is Apple targeting?

02:37:54   Are they targeting people who don't wear watches but do carry iPhones, or do you think they

02:37:59   they are very much targeting people who wear watches today.

02:38:02   I think that they are I don't think they would have invited I

02:38:06   think it's both though. I think that they they see it as an

02:38:08   opportunity see people who don't wear watches as as I think it's

02:38:12   both it's you know, hey, that you if you don't wear a watch

02:38:16   day, your wrist is already open. So we don't have to convince you

02:38:19   to switch watches. We just have to convince you to buy one your

02:38:21   wrist is already there waiting for it. And I think they're

02:38:25   absolutely courting people who already wear watches.

02:38:29   I don't think there's any other explanation

02:38:30   for the time they spent in the event

02:38:32   talking about the iWatch's accuracy,

02:38:34   which is baffling to me at first,

02:38:36   because of course it's accurate.

02:38:39   All computers with a clock are incredibly accurate

02:38:42   compared to mechanical watches.

02:38:45   My iPhone doesn't lose time.

02:38:49   I mean, this stuff about 50 millisecond precision

02:38:54   is a little crazy, but I think it's somehow trying to set it up

02:38:58   as a watch as a watch guys watch. Yeah, but I mean, the

02:39:00   watch guy doesn't have a watch because it's accurate that that

02:39:04   I'm still confused. I know. Um, I

02:39:07   yeah, I don't know. I'm still not sure who that was for.

02:39:10   Well, I think they were trying to land the idea that this is a

02:39:14   watch. Like there is that is a reason to buy a reason to buy it

02:39:18   is because it's now that I think about it. It wasn't actually I

02:39:21   guess it wasn't for watch people. It was for the lay

02:39:25   person's expectation for what a watch person would. Yeah,

02:39:28   exactly. They weren't actually speaking directly to watch

02:39:30   people they were expect they're talking to like the writers in

02:39:34   the audience who don't know the watch world but their

02:39:36   imagination of it is that it's you know, of course, act time

02:39:40   time accuracy is important.

02:39:42   No, I think to me, I really think the most like this

02:39:47   question of modularity is absolutely, is unbelievably fascinating and I think will completely change,

02:39:55   if it's true, would completely change the entire expectation and idea of what this watch

02:40:00   is. Because if it's not modular, if it's just a consumer electronics device, disposable

02:40:08   consumer electronics device, I don't think they are really targeting watch people. Because

02:40:15   people don't buy watches. They buy watches for very specific reasons that would not be addressed

02:40:22   by an Apple Watch. And in this case, the edition version, the gold version, really is just all

02:40:26   about skimming off money from people who are willing to throw it at Apple in Asia. And which

02:40:31   is, I guess that's fine. There's a fine reason to do that. It's kind of a unsatisfying response.

02:40:39   on the other hand, if it is modular and when you buy an edition, you're buying something that

02:40:45   Apple is saying will be good for at least 10 years or maybe ideally a lifetime. Now, you actually are

02:40:52   very much targeting people who value watches for their intrinsic like because you're targeting

02:41:01   watch guys and and I think it's about cutting off future watch guys from

02:41:07   becoming watch guys and women watch people that that it's you know for young

02:41:12   people who've never worn one and as they get more money and they become more

02:41:15   successful and they can afford more expensive things that they're not even

02:41:17   going to consider a traditional watch because they can go this route and

02:41:21   they've already gotten in the habit of wearing one from the sport edition they

02:41:24   bought when they were you know in the 350 well not just that but the reason

02:41:29   to know I completely agree. What I think just occurs to me is a reason why Apple might want

02:41:35   to do the modular thing is just speaking for myself. If it's if it's a throwaway, I'll

02:41:40   buy the sport. If it's modular, I'll buy the stainless steel. Like it's like it's pretty

02:41:46   obvious and I suspect that thinking it's not just that they'll appeal to watch guys, but

02:41:52   I think their ability to to lever people up to a higher margin product will be drastically

02:41:58   enhanced but if they were able to to pull that off. And it would explain why

02:42:03   that's at the the mid-price tier is the one that's being shown you know

02:42:08   established as the regular tier. The one that just has the plan.

02:42:13   This removes all these I think this makes all these questions that people

02:42:17   are objecting to with the watch of the why much less objectionable because now

02:42:22   Now it's not just that Apple is selling a throwaway device.

02:42:29   The question of why would you spend money on this is very much tied into the question

02:42:33   of why would I spend money on a product that is going to be worthless in two years.

02:42:38   That question changes very fundamentally if you know you're buying something that has

02:42:43   longevity.

02:42:44   The sort of thing like it tells time.

02:42:47   And just has a disposable component.

02:42:50   enough to just be a watch then if you know it lasts a long time it's enough to

02:42:54   just be a health tracker when you know it lasts a long time I don't understand

02:42:58   I don't not fully aware of the laws surrounding how and when things need to

02:43:03   be said where they're made it's my understanding though that like it's you

02:43:08   have to you have to like things that are made in China have to say made in China

02:43:12   and went to be sold in the US and around the world it's not you know Apple

02:43:16   doesn't necessarily choose to print designed by Apple in California

02:43:21   assembled in China on all these devices like that's there's a legal obligation

02:43:25   there the Apple watch that they've shown has no printed indication of where

02:43:30   they're made there's nothing and if you look at the case back where they have

02:43:33   all this nice type stamped into it doesn't say that most watches say it on

02:43:38   the dial at the bottom of the dial it'll say made in Japan or Swiss made Japanese

02:43:44   movement I can they do that in software I don't know and and if it's modular can

02:43:51   they have the s1 made in Japan and a Foxconn factory sealed up and shipped to

02:44:00   the u.s. and have the have it put into the watch over here what would what what

02:44:06   what does that mean does that if you know how much of it if the whole s1 was

02:44:11   manufactured in China. Can they still say that the watch is assembled in the US

02:44:15   because the sapphire and the band and the battery and everything was snapped

02:44:20   into place by someone in Texas? Yes, the answer is yes. The iPhone says "Made in China"

02:44:25   but actually the value of the iPhone, Taiwan and Korea especially, make way

02:44:31   more money off of every iPhone than China does. The "Made in China" applies to

02:44:36   just the final assembly and so they could assemble in a way I'm sure it'd be

02:44:40   the case. Taiwan is like even more so today like is very much tied up in the iPhone. Tons

02:44:47   of the components are made here. I'm sure it would be a similar thing with the watch,

02:44:54   but all that matters is the final assembly.

02:44:58   I think then I really do think that at least the edition and I think maybe even the stainless

02:45:04   will be assembled in the US.

02:45:05   And that's something that they could add later because they have the printing on the back.

02:45:09   I would imagine that they would put it there if they did,

02:45:12   but there's no reason for them to have it now

02:45:14   'cause it's not for sale.

02:45:15   - On the prototypes, right, not for sale.

02:45:17   But I just don't see how you can sell a high-end watch

02:45:20   that's made in China.

02:45:21   And I know that that sort of thinking

02:45:23   kind of did in the Swiss industry in the '70s,

02:45:25   like when they had their dark ages,

02:45:27   when quartz watches first became a thing.

02:45:29   One of the reasons they wrote them off

02:45:30   was that they were all made in Japan,

02:45:32   and they were like, "Nobody's gonna buy a watch from Japan.

02:45:35   "Japan means crap."

02:45:36   You know, the watch industry ran

02:45:38   into the same Japanese buzzsaw that the car automotive industry

02:45:42   did, you know, nobody's gonna buy Japanese cars, Japanese

02:45:45   stuff is junk. And you know, there's that thinking that made

02:45:49   in China is sort of a badge of, well, not a shame, but it's not

02:45:53   a badge of honor. It doesn't stand for quality made in China

02:45:55   and just means well, everything's made in China. Made

02:45:59   in the USA means something

02:46:00   right. And the thing is, is that the difference with the watch

02:46:04   industry in the 70s was there.

02:46:07   There was no like it was all.

02:46:09   It was all Switzerland,

02:46:10   so this was completely new,

02:46:12   whereas Apple would be entering

02:46:14   an environment now where there

02:46:16   the expectation of there

02:46:17   being a low end is art

02:46:18   is already there.

02:46:19   And so whereas the watch

02:46:22   like the Swiss industry

02:46:23   had to deal with.

02:46:25   Basically there was a big watch market.

02:46:28   They owned it all and suddenly this whole

02:46:31   in like we've talked about before,

02:46:33   like the consumer market.

02:46:34   there's it's bifurcated it's bifurcated between the high end and the low end the loan cares only about price and

02:46:39   Suddenly there was a new option for price at the low end and they just couldn't respond

02:46:42   Apple that's not gonna be surprised for Apple. They're they're gonna be there

02:46:46   Everyone knows that that's the case and those products are already on the market. There's already the where device is there

02:46:52   I'm not sure if that made sense, but that it made sense in my head

02:46:56   Well, that's a good it's good point I need to wrap this up

02:47:01   This is possibly record-breaking in length, but there's so much to talk about

02:47:04   Can't even imagine that I thought last week. Maybe I'd get to the watch with Renee

02:47:08   Ben Thompson, thank you so much for being here. Everybody can read Ben on a daily basis

02:47:16   effectively at your website's

02:47:18   trajectory

02:47:21   Stata Kari. Yeah, so I I have post a couple free articles a week and then I have the for pay daily updates

02:47:28   And it's well worth it is great stuff. You've been killing it all year

02:47:32   Your perfect example two of that thing

02:47:35   I linked to her this week of the best way to be right all the time

02:47:37   Or most of the time is to be willing to change your mind

02:47:40   You change your mind on a watch and of course the two weeks

02:47:43   It's true. I have to I you know, but I mean that as it's a high compliment because it's you know

02:47:50   It's human nature not to you know, we want to be right at the first time and it's more important to just keep thing

02:47:55   Well, it's not I mean to boot we but we both might be wrong too. I think that's what's that's what's so yeah

02:48:00   It's almost like I've already written four things about it

02:48:02   And I feel like I could I'm always worried about people being bored, but that's what so it we haven't had

02:48:08   something of the iPad kind of but I feel this is

02:48:12   What makes this more compelling than the iPad for me is that it's smaller and to me

02:48:18   I think that's that's important like

02:48:22   it makes it a potentially more meaningful device because

02:48:27   portability will always be a key constraint and

02:48:31   It's just so fascinating either

02:48:34   Yeah, yeah the iPad that was not like a wow. I can't believe they could make this right right exactly it

02:48:42   Whereas I think the watch is going right ended and what that means and people criticize the Apple not being a why but if you?

02:48:49   think about it if you think about it the

02:48:52   There's two alternatives one is that they don't know two is that they're so far their thinking is so far ahead of where our

02:49:00   expectations are that we just like we we can't catch up and

02:49:05   What's it fascinating is one it could go either way?

02:49:08   Which is makes it really interesting but two if they are so far ahead

02:49:12   there's just like there's so much greenfield to even imagine what might be possible and what might be coming and

02:49:18   No, I haven't been this like I don't want to say obsessed but just like constantly turning over my head

02:49:23   What what a product could be in a very long time?

02:49:26   Yeah

02:49:28   Exciting stuff to come. All right. Let me thank my three sponsors great sponsors this week

02:49:32   We got you bar from brawler software comm be r a w er software comm taskbar doc replacement for the Mac

02:49:40   fracture at fracture me comm get your pictures printed on glass and

02:49:47   Third sponsor was need at need edition

02:49:50   Com there's that word addition again

02:49:54   men's magazine great curated

02:49:57   Clothes coffee gadgets stuff like that. Why thanks to them Ben. Thanks. Thank you

02:50:04   I'm hitting stop

02:50:07   [