The Talk Show

29: The Mac Faithful, with John Moltz


00:00:00   This is the talk show with John Gruber. I'm John Gruber your host

00:00:03   My special guest this week is John moltz

00:00:06   You should do that again. Do your Zeldman impression. That's not really a Zelda. I can't do a Zelda an impression, really

00:00:14   I'm sort of just doing a very like what he did is he just instantly and naturally

00:00:18   Did like a very professional introduction right off the top of his head, you know

00:00:24   I can't do it and I don't do impressions and and Zelda has such a great voice my god

00:00:28   I told him at the end of the show, it's like voices on podcasts are like fonts for reading,

00:00:33   and his voice font is just so great. It's got this incredibly rich voice that I do not like.

00:00:42   Yeah, I was going to say, unlike both of us.

00:00:44   You got the big back page column in Mac world this week.

00:00:50   I did.

00:00:51   I think it's new, right?

00:00:54   Yeah.

00:00:55   The February, the February issue.

00:00:59   Which I believe is the latest.

00:01:00   I always get them, I always get them late.

00:01:02   I'm always like the last person to get them for some reason.

00:01:06   And I, and people.

00:01:07   I get confused because I feel like here's, I've got two of them here in front of me and

00:01:11   the covers are very similar.

00:01:13   They're white covers with red Mac world and fonts and they both have pictures of white

00:01:18   iPods on the front.

00:01:21   One of them is February 2013, one of the ones November 2012.

00:01:25   November 2006.

00:01:26   But anyway, it's the February one.

00:01:28   I liked your little blurb on the very nice website where you told people to go to the

00:01:32   newsstand to read it and then you wrote, "Airport?"

00:01:34   Where do people buy magazines?

00:01:36   I don't know.

00:01:37   Where do you?

00:01:38   You used to be – you could buy them everywhere.

00:01:39   Yeah.

00:01:40   It's a funny – it made me laugh though because I did realize that –

00:01:42   I was thinking about that.

00:01:44   I was like thinking – I'm telling people to go out and buy the magazine.

00:01:46   Where the heck are they going to go?

00:01:47   They're going to drive to the airport.

00:01:50   If I didn't have a subscription in that world, I'm not sure where I would go.

00:01:53   Yeah.

00:01:54   Barnes and Noble? I think they still have magazines.

00:01:56   Yeah, I mean those places do, but ours closed. We had a Borders,

00:02:00   and it closed. So in Tacoma, I don't think, I mean,

00:02:04   other than used, we have some great used bookstores, but other than used bookstores, we

00:02:08   can't buy a book. Yeah, there's no used magazine stores.

00:02:12   Maybe there's, I don't know. I think the moment

00:02:16   for that is that. Yeah, right. You don't want to

00:02:20   to go there don't go into those places but the digit it's funny though because

00:02:26   your column on this this the February 2013 issue of Mac and it's not online

00:02:31   yet is that right yeah I always get so confused when I don't even do they even

00:02:34   know what right what goes online right when I don't know what the deal is

00:02:39   frankly I don't think your thing is it online though is it is not no I know I'm

00:02:42   almost positive that it is not I look for it too and and but it's I think they

00:02:47   eventually do that though. It's perfectly timed though because I feel like it's

00:02:52   it that the the headline says it all why Apple drives people crazy and which is

00:02:56   which is what yeah from the last time you were on the show because we were I

00:03:01   asked you about it and I feel like it's really come up again this week all over

00:03:07   the place like I feel like everybody you know I don't know it's like this this

00:03:11   pre earnings because what it's a week from today when Apple's earnings come

00:03:15   Yes, one week from today or Wednesday or was it Wednesday? It's usually a Wednesday or Tuesday or Wednesday, right?

00:03:21   Well, it'll be next next week. Yeah, it's a middle of next week 17th. Yeah sometime next week either Wednesday or Thursday

00:03:28   I think that Apple will do it and I think that's part of it

00:03:31   I think it's partly because we're one week out from their earnings and everybody's piling on but

00:03:35   There is there's like this the the collective

00:03:39   craziness that Apple drives people to

00:03:43   Sanity and stupidity and and just you know turning off of frontal lobes is I get a peak fervor. I feel this week

00:03:51   Maybe I'm just sensitive to it. Maybe it's like once you start looking for it completely, right? I'm just just craziness that are craziness

00:03:58   But I don't want to ask you to do a

00:04:03   Reading of your column, but what what is that? Can you restate it though?

00:04:07   Can you give the gist of it of your argument of what drives what about Apple drives people crazy? Well?

00:04:13   Well, I feel like there's a lot of things, factors,

00:04:18   that go into this.

00:04:19   And I was only able to, because of the size constraints

00:04:23   of the back page, only able to go into some of them.

00:04:27   But a lot of it-- one of the factors I talked about

00:04:32   was this sort of checklist mentality

00:04:34   that people don't understand Apple's product development

00:04:36   process.

00:04:38   And they sort of apply the same view

00:04:42   that they would to any other product category-- Coke, Pepsi,

00:04:47   soda, cars, anything.

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

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

00:04:52   is kind of what places like Consumer Reports use

00:04:56   and a lot of the technology sites

00:04:58   use to do evaluation of products,

00:05:00   because it's just easier that way.

00:05:01   And so they have this checklist mentality,

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

00:05:04   And Apple products often don't-- I mean,

00:05:07   they're not built that way.

00:05:08   They're built for fit and finish and design

00:05:10   and many other factors that don't easily

00:05:12   lend themselves to being evaluated by a checklist

00:05:15   process.

00:05:15   And so these guys go through, and they-- mostly guys--

00:05:19   and they say the Samsung device did better

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

00:05:27   in it.

00:05:29   Which is--

00:05:30   That is true.

00:05:31   It is.

00:05:31   There is a phone now with a built-in projector.

00:05:34   Which I think is just utter madness.

00:05:35   But there is something that you can check off on a list,

00:05:39   and Apple will never have a phone with a projector in it.

00:05:42   So they give more checks to the Samsung device,

00:05:47   and Apple's device gets fewer, and so they

00:05:49   say the Samsung device won.

00:05:51   And then what happens is Mac users, Apple fans,

00:05:56   get into the comments and start screaming loudly

00:05:59   that they don't understand what they're a bunch of idiots.

00:06:01   And this starts this sort of feedback loop for insanity,

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

00:06:07   because their fully scientific process has determined

00:06:12   that the Samsung device is better.

00:06:14   So therefore, they try and come up with an explanation

00:06:16   for why are we so bent out of shape about this?

00:06:21   And their only explanation that they can come up with

00:06:23   is that it's a religion.

00:06:25   - That's one of my favorites.

00:06:28   And it never gets old.

00:06:30   It never dies. - Apparently, it never dies.

00:06:33   - Well, and part of it too, and it's that the F word,

00:06:37   faithful. The Apple faithful. Or sometimes I still see—I just saw

00:06:42   yesterday, and it's one of those things where I never know whether I should link

00:06:45   to it and throw traffic at this crap just to make a joke or to let it slide.

00:06:50   But I let it slide, but it was an argument. And the gist of it was that

00:06:54   the people who buy Apple—all Apple products—are, you know, the religious

00:07:00   fervor. But they called them the Mac faithful. It's the Mac faithful who are

00:07:04   buying the iPhones and iPads and Macs when, you know, you just—

00:07:09   35 million a quarter.

00:07:12   I mean, there's 50 million—they're expecting to sell 50 million iPhones in the last three

00:07:17   months alone when they report their numbers next week.

00:07:20   I mean, no matter whether it's a little bit higher or a little bit lower, it's not

00:07:23   going to be too far away from 50 million.

00:07:25   They don't sell 50 million Macs, you know?

00:07:27   It's crazy.

00:07:28   Like, the whole idea that there's an Apple faithful and that's who they sell to is

00:07:32   wrongheaded and nuts, too.

00:07:33   but I think that they still toss around the term

00:07:36   Mac faithful to describe them shows just how burned

00:07:41   into their lizard brains this view of Apple is.

00:07:46   - Yeah.

00:07:49   - You know, I think I was with you the last time,

00:07:51   or I put it in context of like first impressions

00:07:56   in that people's brains like were evolutionarily wired

00:08:00   to make first impression, or not even first impressions,

00:08:02   But initial impressions of people,

00:08:05   and people don't really change that much over time,

00:08:08   and so we're just not wired to change our minds

00:08:11   about somebody or a thing.

00:08:14   And evolutionary, there's no reason to really have

00:08:18   a conception of a corporation, because there weren't any.

00:08:21   But I think our brains are just,

00:08:23   we treat 'em the same way.

00:08:24   We have emotional, the way that you have

00:08:26   an emotional response to a person,

00:08:28   you have an emotional response to companies.

00:08:30   that I think it's an awful lot of people who formed their view of Apple in the 90s

00:08:36   when the company was in trouble and it looked like you could really make

00:08:41   the argument that their basic strategy of controlling the whole experience,

00:08:47   doing the software, doing the hardware, doing things their own way, that you

00:08:52   could, you know, reasonably make a data backed argument then that it was that's

00:08:56   the wrong way to go and that doesn't work. And that the other way, the PC way, the open

00:09:01   way of using, you know, Microsoft's operating system and having a whole ecosystem of crazy,

00:09:07   you know, configurations of hardware, that's the way to go. Well, you could back that up

00:09:11   then. And I feel people burn that into their mind, that Apple is stubborn and wrong and

00:09:17   a niche and designs for twee design aficionados and it's not successful. And that's the way

00:09:25   way it is. And everything that's happened since that seems to poke a hole in that, they

00:09:30   just see that as a fluke.

00:09:32   You know, that the…

00:09:33   Tim Cynova The things will write themselves…

00:09:35   Dave Asprey The fluke that's going to be corrected

00:09:36   any day.

00:09:37   Tim Cynova Things will write themselves… yeah, yeah.

00:09:38   Things will write themselves eventually. I have a cute little phrase for people. I mean,

00:09:40   this kind of thought process, which is people cutting themselves on Occam's razor. Because

00:09:45   they… it's a simple explanation. And usually, you know, they say that simple explanation

00:09:52   is usually the right one. It's not true in all cases, and it's not true in this

00:09:56   case. The idea that the mobile landscape is exactly the same as the PC landscape was in

00:10:04   the '90s is really not the case at all. There are certain similarities, but to say

00:10:12   that it's going to play out exactly the same is just wrong-headed.

00:10:15   Well, and here's the other thing I keep coming back to, and I feel like I should…

00:10:19   This is an idea that I could expand into a pretty good article, maybe.

00:10:23   Hang on, I want to type this down.

00:10:25   I want to get this down so I can steal it from you.

00:10:29   Primarily what people are arguing about today is iOS.

00:10:31   It's phones and the tablet.

00:10:33   And when they say that Apple's going to run into the same problem that they did before,

00:10:36   it's this basic argument that Android is the new Windows and iOS is the new Mac.

00:10:41   what happened to Apple with the Mac against Windows in the 90s is repeating itself now,

00:10:46   but it's Android and Google instead of Microsoft and Windows. And there's a couple of problems

00:10:53   with that. One, Apple back in the 90s with the Mac never, ever, ever had this sort of

00:11:00   success that they have now with iOS in terms of the millions of users and brand awareness.

00:11:08   They didn't have the retail presence because they didn't even have retail stores. There's

00:11:11   many things that are different, right? They were not the world's most profitable company

00:11:14   at some point, you know, when the Mac was at its peak and Windows 95 hadn't come out yet. They

00:11:20   weren't the most, I mean, they were doing better than they were in those dark years of 96, 97, 98,

00:11:25   but they were never the world's most profitable company. They were never the biggest PC seller.

00:11:29   They never had, you know, market share like they have with the iPad and tablets. None of these

00:11:35   things were true. But I would just say, I would push all that aside and just go back and just

00:11:39   revisit the idea that something actually went wrong for Apple in the PC industry.

00:11:44   They did have a couple of bad years, but they had really bad management at that time, right?

00:11:50   Just look at where the Mac is today.

00:11:53   It has 25 or 26 consecutive quarters of outgrowing the PC industry as a whole, right?

00:12:00   And it's very profitable.

00:12:03   Did Apple actually lose the PC wars?

00:12:05   I don't even see the argument of that.

00:12:08   that there – yes, there were a couple of years where things were bad. But in hindsight,

00:12:12   and given the stability that's happened in the last 15 years with the Mac, how can

00:12:18   you argue that they even lost that one?

00:12:19   Tim Cynova If you add the iPad in now, as you consider

00:12:22   that a computer, you can't really say that.

00:12:27   Steven

00:12:27   I think and I think it let's just call the PC industry. Let's let's separate the iPad from it, right?

00:12:32   Let's say that that's post PC and let's say the PC industry is

00:12:35   What we thought let's draw the line at

00:12:38   2007 and say before the iPhone what we thought of is the PC industry just tops and

00:12:43   laptops running Windows or Mac or Linux and

00:12:47   You know keyboards and mice and pointers that that type of thing

00:12:52   I would guess that if you separated out Apple's profits, I mean in fact I don't even think

00:12:58   I have to guess. I'm almost certain that Microsoft is still the most profitable PC

00:13:04   company. That Microsoft makes more profits from what that definition I just made of PCs

00:13:11   than Apple. And maybe Intel makes the second most, I don't know. But Apple certainly

00:13:17   makes a lot and I'm pretty sure that they make more profit than any other company that

00:13:22   makes PC hardware. That they make more profit on it than HP or any of those companies. It's

00:13:29   certainly a very good business.

00:13:30   Tim Cynova That's interesting that nobody's…

00:13:31   Dave Asprey But yet I feel like there's still this assumption

00:13:33   that Apple screwed the pooch with PCs in the 90s.

00:13:36   Tim Cynova Yeah. It's interesting that nobody's done

00:13:39   that. That you don't see somebody, I mean everybody focuses so much on mobile right

00:13:44   right now that nobody really is having that argument anymore.

00:13:49   No, and I feel like the time to make it is fading too because the PC industry is shrinking.

00:13:56   And now that it's shrinking, I mean, like I kind of misspoke just before going on the

00:14:01   air here. I posted a thing about Apple and why is Apple expected. It was an argument

00:14:06   from some woman that Apple needs to introduce something new. And I just, you know, a brief

00:14:11   piece and I just said well why does Apple need to do something new when they

00:14:14   the things that they've already got are all profitable the Mac iPad and iPhone

00:14:18   all profitable and growing and somebody pointed out that the Mac isn't actually

00:14:21   growing anymore I feel like quarter to quarter sales might even be down a

00:14:25   little bit what I was thinking was that they're still growing it's still

00:14:31   outpacing the in PC industry as a whole it's just that the PC industry as a

00:14:35   whole is starting to shrink so fast that even with the Mac doing well relative to

00:14:40   all other PCs, it's still actually shrinking quarter to quarter. But that's all, it's

00:14:45   actually, you know, it's one of those like nice problems to have because it's all

00:14:49   about the iPad. Because so many fewer laptops are being sold because people are buying iPads.

00:14:54   Right. And I wanted to talk to you about that. I wanted to discuss that as well, that, that,

00:15:00   what you had. Yeah, I was just looking up the Mac unit sales numbers and they're up,

00:15:06   up year over year but just barely yeah it's close it you know it's it would be

00:15:16   tough to say growing anymore but they're still strong and compared to their

00:15:19   historical numbers they are they are they are literally growing it's it's but

00:15:24   they'll have to have a pretty good quarter to be I think they would do it I

00:15:26   think they would do it they are still growing but it's it's not by it's not a

00:15:29   lot it's not no and they maybe maybe these numbers for this last quarter will

00:15:34   be pretty good because they introduced a couple of new, you know, they had new iMacs and…

00:15:39   Steven: They shipped late though. I don't know. I wonder how many…

00:15:42   Steve, off camera, I'm not sure if the 13… I don't know. I guess the 13-inch MacBook

00:15:45   Pro is their best-selling laptop. I don't know.

00:15:48   Steven, off camera Really?

00:15:49   Steve, off camera I would think the Air…

00:15:50   Steve, off camera I would think the Air…

00:15:51   Steve, off camera Or at least you can't get Retina. I don't

00:15:53   know. They might have a really good number…

00:15:55   Steve, off camera Yeah.

00:15:56   Steve, off camera …for Macs. You know, anybody who was holding

00:15:58   out on a new iMac…

00:15:59   Steve, off camera God forbid anybody wait until next week to

00:16:01   find out. We shall…

00:16:02   Steve, off camera Right.

00:16:03   I'll talk about it now.

00:16:04   Maybe it actually won't show up in the quarterly results, though, because like the iMac didn't

00:16:08   ship until the first week of December.

00:16:09   That's the thing I'm thinking.

00:16:10   So maybe they didn't, maybe they were, it wasn't, because it wasn't available the whole

00:16:13   quarter, maybe it'll be this next quarter where we'll see, you know, the spike from

00:16:17   the new introductions.

00:16:18   Yeah.

00:16:19   But the holiday quarter usually does better than, regardless of whether they—

00:16:23   Yeah, because, you know, computers, you know, maybe it's not, it's kind of a big ticket

00:16:26   Christmas gift, but it still is the sort of thing that people will buy and call it a Christmas

00:16:30   gift.

00:16:31   Yeah.

00:16:32   But the thing about that that I think is that it's fine for them to go along for a while

00:16:39   and just try and ride the growth of these existing products.

00:16:42   But eventually, the Apple that we know is more about going into new markets and reinventing

00:16:49   a new market and staking out the high end and scooping up all the profit and leaving

00:16:57   the low end for everybody else.

00:16:59   Right, and I'm certainly not arguing that they never need to introduce something – a

00:17:03   major new disruption.

00:17:05   I just think, though, that it's goofy to say they need it immediately.

00:17:09   And that's the thing – that's the other thing.

00:17:11   There's a big difference between they need a major new disruption eventually versus they

00:17:16   need a major new disruption now, right now.

00:17:19   And that's something else I think I touched on in that column is that there's this myth

00:17:25   that Apple, under Steve Jobs, churned out—and I think we've talked about this before—but

00:17:30   churned out a groundbreaking product pretty much every quarter, which is not at all the

00:17:35   case.

00:17:36   In hindsight, it's gotten to the point where, yeah, every single time the guy came on stage,

00:17:38   he obliterated an industry.

00:17:41   And Tim Cook still hasn't done it.

00:17:43   Right.

00:17:44   And it's been a whole year, and Tim Cook still hasn't done it.

00:17:46   But you could say the iMac was groundbreaking, I guess, even though the operating system

00:17:54   was exactly the same as the previous operating system. So they did the iMac, they did the

00:17:59   iPod three years later, and then they did the iPhone six years after the iPod. Something

00:18:12   like that.

00:18:13   Right, which is way longer than the scope of period we're looking at right now from

00:18:17   need, you know, everybody points to the original iPad in 2010.

00:18:22   So that's, we're coming close to about three years.

00:18:27   But we still haven't even hit.

00:18:28   Which would be the bare minimum for coming up with something new.

00:18:33   Right.

00:18:34   So, and as somebody, one of the things I linked to recently said, I think it was this piece

00:18:38   from Harvard Business Review by Dan Palata, who made the exact same point you just did,

00:18:43   they went six years without a disruption under Steve Jobs between the iPod and

00:18:49   iPhone is that when the iPad came out which everybody now hails as the thing

00:18:55   that they need to do something like that again a lot of these same people said

00:18:59   that it's just a big iPod just a big iPhone that they didn't even count it

00:19:03   when it appeared yeah that's usually the hallmark I mean the iPhone is the the

00:19:11   the exception. I've often said this, that it's like the holy grail of Apple introductions,

00:19:16   because it was the one that blew everybody away. It blew me away, you know, I'm assuming

00:19:23   it blew you away. It blew the people who get Apple away, and it blew the people who don't

00:19:27   get Apple away. Everybody, even the people who don't understand the company, were like,

00:19:30   "Well, wow, that's a thing." That's amazing. Why can't you do that every time?

00:19:34   And that was my first Macworld, was that one.

00:19:38   And I remember, I think I was sitting,

00:19:41   I might have been sitting next to Glenn.

00:19:43   Yeah, right, I might have been sitting

00:19:44   next to Glenn Fleishman at the time,

00:19:45   and I thought, are they all like this?

00:19:47   This is amazing.

00:19:49   - That was the one where everybody recognized it.

00:19:56   But all the other ones usually are met,

00:19:58   like it's a good sign that Apple's onto something

00:20:00   if it's greeted with a collective meh.

00:20:04   Yeah, yeah, right.

00:20:06   It's getting—I kind of pity the guy because I feel like it's going to go on his tombstone,

00:20:10   but Commander Taco's famous Slashdot reaction to the original iPod. What was it?

00:20:16   Apple releases iPod. This is from Slashdot on October 23, 2001.

00:20:21   And here's what Commander Taco wrote. "No wireless, less space than a nomad. Lame."

00:20:26   Nomad.

00:20:28   It's even better than I remember. Lame.

00:20:31   Also, he didn't capitalize Nomad.

00:20:36   I feel like there's a sort of disdain to that.

00:20:41   Did you have an MP3 player before the iPod?

00:20:46   Yes, I did not.

00:20:49   Amy did.

00:20:50   Amy had a Rio something or another.

00:20:54   was a flash-based jobbie and it held 10 songs, 11 if you picked the right song.

00:21:02   So it was cool in the sense that if you were used to the song restrictions of a CD or a tape,

00:21:15   where you could have about one album worth, you could do it. And it was this device that was way

00:21:20   lighter than the spinning disc player and smaller and never had to worry about jostling

00:21:28   it and having it skip or something like that. But in hindsight, it was a collective pain

00:21:34   in the ass where if you're sick of the 10 songs that were on it, you had to connect

00:21:37   it to your Mac. I think it used SoundJam. SoundJam was what she used to manage music.

00:21:43   Tim Cynova Right. That's what I did too. At the time,

00:21:45   I got it just before going to Tokyo. My wife and I spent three months in Tokyo and it was

00:21:50   working there and it was actually,

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

00:21:55   because it was like a shuffle.

00:21:57   It was like an iPod shuffle because you just load it up

00:22:00   with a few songs, obviously more size constraint.

00:22:05   But I had like a 20 minute commute and it was perfect.

00:22:10   But you know.

00:22:14   - It was funny, the interface was so bad

00:22:17   that I really do think, no joke,

00:22:19   It was harder to find a specific song, even though there were only 10 or 11 songs total,

00:22:24   than on an iPod that you might have loaded up with thousands.

00:22:27   It was useless.

00:22:28   I mean, the interface for it was useless, which is something that Apple rightly recognized.

00:22:32   There's no point in having the screen on there.

00:22:34   You know what the songs are.

00:22:36   Right.

00:22:37   Right.

00:22:38   It shouldn't have been published off of.

00:22:39   And you're going to play them in a random order.

00:22:40   There was no point in having the screen.

00:22:41   The screen just made it worse.

00:22:43   Right.

00:22:44   And it also comes to that thing.

00:22:45   It also gets to the point that Siracusa made this week in an article about companies, the

00:22:51   software being the weak link in all of these hardware products at CES.

00:22:58   What was wrong with all the MP3 players before the iPod was their software.

00:23:02   The interface was just horrendous.

00:23:05   This is what I don't understand about this cheap iPhone thing is the way Apple made cheap

00:23:12   iPods is by stripping out features and making a better, more restricted device that just

00:23:18   did less but did it really well and easily.

00:23:22   And I don't see how they're going to be able to do that with an iPhone.

00:23:27   You can't strip out the platform.

00:23:30   You can't have one that's just a phone.

00:23:33   So what exactly are you removing?

00:23:38   And it seems like they're going with this, you know, to date they've just been going

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

00:23:44   And I don't understand if they're going to do that.

00:23:48   There's an intellectual laziness to the argument, this,

00:23:52   oh yes, finally they're going to make a cheap iPhone.

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

00:24:01   welcome and good news.

00:24:03   But their arguments in favor of it are intellectually so lazy.

00:24:07   It really all comes down to what I call the church of market

00:24:09   share.

00:24:11   It's just this religious fervor that market share is the most important thing and anything

00:24:17   that's a move from market share is good and anything that doesn't help your market

00:24:21   share is bad.

00:24:23   Regardless of things like profitability or consumer loyalty or building out the platform

00:24:30   in a sane way from a developer's perspective, none of that matters.

00:24:33   All that matters is if they sold an iPhone cheaper, they'd gain market share.

00:24:37   And that's…

00:24:38   Scully says that you should know myself that's it ipso facto it's it would be

00:24:41   good for Apple and if they don't do it it's bad and John Scully says you should

00:24:44   do it you should not do it what I didn't read this gully thing yet I have it open

00:24:50   and he basically is well his point was that they should make a small I mean a

00:24:54   cheaper iPhone to do just that you know and Scully I saw some I saw I know that

00:25:01   he has a thing I didn't read it yet but uh he gets he's getting a bad rap because

00:25:05   He didn't leave Apple in too bad a shape.

00:25:09   And the Newton thing didn't work out, but boy, he was close to a thing.

00:25:16   I just think he's – but his business management is poorly suited to Apple's strengths.

00:25:24   But if I were him, that said, even given that he left the company in pretty good shape – and

00:25:28   it was really Michael Spindler, his successor, who ran the company into the ground, who you

00:25:32   never hear of anymore.

00:25:33   I don't know what that guy's doing.

00:25:34   He's the guy I'd like to hear people get, you know, "What do you think Apple should

00:25:38   do?"

00:25:39   You might get a really good answer out of him.

00:25:40   But if I were Scully, boy, I would never ever get near those questions.

00:25:44   I just, you know, don't, don't, just don't.

00:25:48   Don't.

00:25:49   You know what I mean?

00:25:51   You're the guy who ran Steve Jobs out of the company.

00:25:53   Don't.

00:25:54   I would like to go…

00:25:55   And maybe, you know, and it's such a long, complicated thing, and maybe that really was

00:25:58   good for Jobs because it really made him reevaluate things and he learned lessons and, you know,

00:26:04   you could even argue that culturally Next was more of like a sibling to Apple than its

00:26:11   competitor and that the reunification in 1998 was really more like two halves that never

00:26:17   should have been separated coming together but it never would have happened if Jobs hadn't

00:26:22   been kicked out and, you know, then they never would have had Next Step which turned into

00:26:27   OS X and blah blah blah. But in a nutshell though, Scully screwed up. I feel like he

00:26:33   should just say one nice sentence about Apple and say, "But I'm not going to comment

00:26:39   on their management."

00:26:40   Yeah, it's like talking about an old girlfriend.

00:26:43   Right. Or it's like, what was his name? Pete Best talking about Beatles albums. You

00:26:49   know what I mean? Given a critique of what was wrong with the White Album. You know what?

00:26:54   Pete Best doesn't do that, and that for good reason.

00:26:58   Talking about management, old management of Apple,

00:27:00   I would like to go back and look at--

00:27:01   I haven't done this recently, and I

00:27:03   don't know if there's a concise place to look at this--

00:27:05   but what the product mix looked like when jobs or when

00:27:10   Emilio took over.

00:27:13   Because they had all those-- and if you included the clones.

00:27:18   Wow.

00:27:19   I mean, it was just a mess.

00:27:21   Yeah, it really was.

00:27:24   Yeah, because the clones were in place before Emilio came in.

00:27:29   Right.

00:27:30   Right.

00:27:31   Right.

00:27:32   Emilio wasn't there that long.

00:27:33   No.

00:27:34   He was only there for like, was it less than a year?

00:27:35   Maybe a year and a half or something.

00:27:36   He gets a bad rap too, because he actually did a pretty good job.

00:27:40   I mean, he didn't introduce anything new to fix the company, but he stopped a lot of

00:27:50   the bleeding.

00:27:51   Yeah.

00:27:52   triage surgeon, you know what I mean?

00:27:54   Like an ER doctor who came in and at least fixed

00:27:58   the stuff that was awful.

00:27:59   And then it was up to Jobs to come in and get some new stuff

00:28:04   that was going to turn it around.

00:28:08   But yeah, I would love to see-- I could just

00:28:10   see it as one of those things like on a Tumblr site,

00:28:12   like one of those posters.

00:28:14   And instead of just like all Apple products in history,

00:28:16   just what was the product lineup like in the summer of '96?

00:28:21   Right.

00:28:23   What did you own back then?

00:28:25   I had a Power Mac 9600, which was an incredible machine

00:28:33   at the time.

00:28:34   And I think it was a machine that debuted at like $4,000 or $5,000.

00:28:42   And it somehow quickly got superseded.

00:28:48   I forget what--

00:28:48   That happened a lot.

00:28:50   But I got it brand new right after the next thing had come out, and I got it for $2,100.

00:28:58   So six months earlier, it was retailing for $4,500, and I got it for $2,100 and used it

00:29:06   for years.

00:29:07   It was one of the best computers I've ever owned.

00:29:09   I had a Performa 6400, which is widely considered a road apple, but I really liked that.

00:29:20   I really liked it.

00:29:22   It had a …

00:29:23   It had a …

00:29:24   I guess it wasn't a Power – was it a Power – was my thing called a Power Map?

00:29:25   I think it was called a Power Map.

00:29:26   I think you forgot.

00:29:27   I think it was called a Power Map.

00:29:28   Yeah.

00:29:29   It probably would have been …

00:29:30   I actually forget, but I'm pretty sure that it was a Power Map.

00:29:31   I know it was a 9600.

00:29:32   Were they still making Quadras?

00:29:33   No, it wasn't a Quadra because it was – it wasn't Quadra – Quadra wasn't Power

00:29:39   power PC. And this was my first power PC. I think there was a power manual. And I remember

00:29:45   specifically that it was a 9600 because I named my hard drive like "HAL 9600." My

00:29:51   hard drive icon on that machine was a HAL icon. Because I thought, you know, if it's

00:29:57   9600 and HAL was the HAL 9000, you know, obvious way to name your computer.

00:30:03   Did you use a kaleidoscope and lots of icon packs?

00:30:08   That's a great question. I did on and off for years.

00:30:12   Yeah.

00:30:13   A kaleidoscope I didn't really get into, but I did use—because I feel like by the time

00:30:19   kaleidoscope came out, I had outgrown that urge.

00:30:22   Right.

00:30:23   What I remember using was—was it called Aron?

00:30:29   Maybe. There was—yeah.

00:30:30   And it was by the guy who eventually went on to make kaleidoscope with somebody else,

00:30:34   but it was Aron. And he also had one. It was just an extension you dropped in your folder

00:30:38   and it changed the look and feel of your windows to look like anything. This is the crazy part,

00:30:46   is that Apple had purposefully ceded, like to Mac World and Mac user, screenshots of the next

00:30:52   generation Mac OS, the Copeland and whatever the other, Gershwin, whatever the hell they were

00:30:57   coming out with, and they were like, "Here's what it's going to look like." Like that. They were like

00:31:02   so desperate for publicity and they're so stagnant on the OS is that to keep people excited, they

00:31:08   revealed like two years in advance what everything was going to look like. And so this guy, what

00:31:13   was it, Greg Landweber made an extension called Aron which gave you that look and feel right

00:31:21   now. I think it was like $10 shareware or something like that. And then he came out

00:31:25   with one, I forget what it was called, but it did the same thing but made the Mac look

00:31:28   like the BOS with the yellow tab style windows. I ran that for a while.

00:31:34   But like I said, like you said, I think it's an itch that you get for a while, and then

00:31:40   once you've scratched it, you're done.

00:31:42   Yeah, all of a sudden you feel silly.

00:31:45   Maybe it's an age thing.

00:31:46   Or maybe it's an age thing.

00:31:47   Or something like that.

00:31:48   Like cosplay or something.

00:31:51   I haven't lost the urge for that yet.

00:31:53   I just felt like that.

00:31:54   I don't know.

00:31:56   I always thought that, especially in those days with the system extensions, that the

00:32:01   curve for power users was that as you got more and more into your Mac as an

00:32:06   enthusiast and a geek and someone who's just into it, you added more and more

00:32:10   extensions and when you, you know, for those of you who don't remember, when you

00:32:13   booted your Mac in those days, each system extension you had would put a

00:32:17   little icon up at the bottom of the screen and you'd get this. Usually it

00:32:20   would just go across one row, but if you were like really into it, you'd get two

00:32:23   rows and then if you really loaded your system up with extensions, you know, you'd

00:32:26   get the third row or even a fourth row. And you could measure how much of a nerd

00:32:30   you were by how many rows of those icons you got when you started your computer.

00:32:34   But I always thought that when you got to a certain point, it was like a bell curve

00:32:37   and it started going down the other way.

00:32:39   And the people who really knew the Mac and really got into it ran with as few extensions

00:32:44   as possible.

00:32:45   Tim Cynova – Yeah, because there was always that sense of dread that it would stop as

00:32:50   it was loading those icons.

00:32:51   John Greenewald – Oh, because it would happen sometimes.

00:32:53   Yeah, exactly.

00:32:54   Tim Cynova – I mean, I would have a lot.

00:32:55   John Greenewald – That you'd be doing it and one of the icons would come up and

00:32:57   then it would just stop at that point.

00:32:58   Tim Cynova – It would just freeze.

00:32:59   the operating system would just lock up while we were booting because you've gotten a conflict.

00:33:03   I know I've talked about this probably with Dan on an old talk show, but

00:33:08   one of the greatest software, one of the greatest apps in the history of macOS was Conflict Catcher,

00:33:15   which was a program whose entire point was defined and help you find and identify conflicts between

00:33:23   system extensions and identify them and then you could have like you know if

00:33:29   extension a which made your cursor turn into Snoopy dog when instead of a watch

00:33:35   when you were waiting for something conflicted with extension B which gave

00:33:41   you like a system-wide Apple script menu or something like that you could like

00:33:45   set presets and say okay when I'm running this extension I'm not running

00:33:49   this one and when I'm running the other one I'm not running this one and you

00:33:51   like switch between them when you started up. And the app, I just remember it was like,

00:33:56   you know, it was like, what were they doing then? The app was written by Jeff Robin, who

00:34:01   went on to write Sound Jam, which you may have heard of is now called iTunes, and he's

00:34:05   still at Apple.

00:34:06   Oh, is he really? Okay.

00:34:07   Yeah, because he still does the demos. He did the demo of iTunes 11.

00:34:12   Oh.

00:34:13   He's still in charge of iTunes.

00:34:15   Oh.

00:34:16   But Conflict Catcher was a huge hit.

00:34:18   Yeah.

00:34:19   And it's just so funny in hindsight that it was necessary.

00:34:21   necessary because we were running these things.

00:34:23   Do they eventually, well they made their own, right?

00:34:27   They made some sort of conflict management.

00:34:29   Yeah, but it wasn't powerful.

00:34:30   No, it wasn't nearly as powerful.

00:34:31   Like you could do it manually, but you couldn't save sets or something like that.

00:34:35   Yeah, something like that.

00:34:37   Well, the gist of it though is that, you know, ultimately long term they needed to move to something like

00:34:43   Mac OS X with a modern architecture where one process isn't going to hang, whether it's an extension or whatever,

00:34:50   isn't going to hang your whole computer. But like the people who used to complain

00:34:54   about their Macs locking up inevitably had like four rows of system extensions

00:34:58   and they were all using you know APIs that weren't meant to be used by third

00:35:03   party developers. Whereas if you just stuck to what Apple gave you, you just ran

00:35:06   the stock OS, it was very very reliable and it was pretty hard to do that though.

00:35:12   Because there were so many, I mean developers just began to ship those

00:35:15   things like crazy and you'd get a new box set of software and it would install 15 extensions.

00:35:22   Right. Everything was an extension. Man, you needed like Adobe Type Manager. Just to render

00:35:28   PostScript fonts, you needed an extension from Adobe. ATM, Adobe Type Manager. And you

00:35:34   had to name Adobe Type Manager. I mean, we're really out in the weeds here. But remember

00:35:38   you had to name Adobe Type Manager with a tilde.

00:35:41   Oh, yeah. Yeah, they definitely…

00:35:42   tilde ATM because it had to load last because of I don't even know why but you

00:35:48   had to make sure it loaded last and it loaded in alphabetical order and tilde

00:35:51   sorted to the bottom whereas most punctuation characters sorted to the top

00:35:56   before the letters and so it was tilde ATM I don't miss that no I don't miss

00:36:03   that at all which was sort of the one thing that Windows I mean even as a Mac

00:36:07   user we had to say that Windows 95 with protected memory and none of that stuff

00:36:14   was was actually an improvement we would bitch about the look and feel and how it

00:36:18   was all stolen from yeah there was a stable Mac that was antithetical to

00:36:27   apples the way things ought to have ran you know that you really did have to be

00:36:32   it's almost it's almost the complete polar opposite of the App Store mind

00:36:37   mindset, where the App Store mindset is, "Look, we've vetted this stuff, and it's in a

00:36:41   tech…"

00:36:42   You know, both two levels of protection.

00:36:45   A, we've vetted it personally before we allowed it into the store, and B, there's

00:36:49   a sandbox that technically locks this software into an area where it's not going to mess

00:36:54   up your whole system.

00:36:55   So we can't guarantee you that the app is going to be good, but we can guarantee you

00:36:58   that it's not going to – you're not going to screw up your computer in any way

00:37:02   by installing anything from the App Store.

00:37:04   Whereas in the '90s, with the late era of System 7 and System 8, you really had to almost

00:37:10   be an expert when you installed anything to make sure that it wasn't going to hose your

00:37:15   system, which was exactly the opposite of the System 7 and 8 days, where you really

00:37:19   had to do a before and after on your extensions folder to make sure that nothing sketchy had

00:37:24   been stuck in there.

00:37:26   Tim Cynova And you allocated memory manually.

00:37:28   Remember that?

00:37:30   Dave Asprey That seems so ridiculous.

00:37:33   Tim Cynova It does.

00:37:34   completely ridiculous.

00:37:37   You the human being decided how much RAM to give Photoshop.

00:37:42   RAM doubler.

00:37:43   Man.

00:37:44   Anyway, we should stop talking about that because it sounds like old man.

00:37:47   You know what though?

00:37:48   I do feel though that it does show though that Apple – yeah, Apple was not in great

00:37:52   shape in 1996.

00:37:53   Right.

00:37:54   That's the point.

00:37:55   Right.

00:37:56   And it's not true.

00:37:57   In many, many ways.

00:37:58   But do you want to talk about the stock, the whole stock thing?

00:38:01   Yeah, I do.

00:38:02   Before we get into the stock thing, let's take a break,

00:38:04   and I will do, I'm gonna do a sponsor break.

00:38:09   - Okay.

00:38:10   - I wanna tell you about a great new app for the iPad.

00:38:14   It's called Infinite Refrigerator.

00:38:16   Infinite Refrigerator.

00:38:18   Net name's gonna make total sense to you

00:38:20   as soon as I tell you what it does.

00:38:21   Infinite Refrigerator provides you with one or more

00:38:26   personalized virtual refrigerators,

00:38:29   and the idea is that you make one for each of your kids,

00:38:32   and you use it to display digital photos,

00:38:36   pictures of artwork, report cards, notes,

00:38:40   anything that you might put up

00:38:42   on your real-life refrigerator in your kitchen,

00:38:44   you can put up instead on your virtual refrigerator,

00:38:47   an infinite refrigerator.

00:38:49   Why would you do this?

00:38:50   Easy.

00:38:51   It eliminates the guilt that sort of

00:38:53   is the implicit guilt.

00:38:54   When you put stuff up on a real refrigerator

00:38:57   and then time goes on and you get more pictures

00:38:59   and you've gotta take the old stuff down

00:39:01   to put the new stuff up.

00:39:04   If you do an Infinite Refrigerator instead,

00:39:06   you never have to take stuff down.

00:39:07   You can just keep piling it in because it's a computer.

00:39:10   It can store it all.

00:39:11   And it gives you a permanent digital home

00:39:15   for these type of mementos.

00:39:17   Photos that you store on an Infinite Refrigerator

00:39:20   support full screen pan and zoom,

00:39:21   just like the built-in Photos app.

00:39:23   You can pick them from your camera roll,

00:39:25   or you can take a new picture using the app.

00:39:30   Put them up, it looks like a thumbnail on this little virtual fridge, there's a little

00:39:33   magnet.

00:39:34   Tap the photo, zooms to full screen, pan and zoom, everything you want.

00:39:38   Tap again to close and you're back to the refrigerator view.

00:39:43   You can supply a title and a note for each photo.

00:39:45   You can even record audio commentary or have your kid record audio commentary describing

00:39:50   the photo or the picture or the image or whatever it is in their own voice.

00:39:55   Unlike the real refrigerator in your kitchen, an infinite refrigerator never forgets, right?

00:40:00   And hanging next to each Infinite Refrigerator is a calendar.

00:40:03   I'll write there on screen.

00:40:04   Tap the calendar and you can go back in time and see what the refrigerator looked like

00:40:09   before.

00:40:10   This is the type of app where it's kind of fun to use to keep, you know, to start using,

00:40:13   but you're really not – and you can just imagine this.

00:40:16   The benefits really aren't going to come until you've been using it for months or a year

00:40:20   or even a couple of years and you have a whole bunch of mementos stored in this thing.

00:40:24   And then you can use the calendar view to go back and see what it looked like six months

00:40:28   or a year ago and just sort of page through time like that.

00:40:32   Fridges, the whole fridge, the whole collage type layout

00:40:35   that you make or any individual photo can be shared

00:40:39   through the app via email, iMessage, Twitter, Facebook,

00:40:43   all the standard iOS sharing stuff.

00:40:46   So how much does it cost?

00:40:47   Here's the deal.

00:40:49   It's an iPad app built for iOS 6.

00:40:52   Download the app from the App Store, absolutely free,

00:40:55   free download.

00:40:56   But here's the hitch.

00:40:57   You only get one fridge to start with.

00:40:59   It's Glacier Blue.

00:41:00   Now you can make more than one of them,

00:41:01   but if you want to use the other colors,

00:41:03   they've got five other styles and colors of fridges,

00:41:06   it's an in-app purchase, $1.99.

00:41:10   So it's a free app.

00:41:11   Download it, there's no limits to it,

00:41:13   but you're using the Blue Fridge.

00:41:14   You wanna use other colors, two bucks.

00:41:17   Two bucks to unlock the whole app.

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00:41:26   Refrigerator.com that's infinite refrigerator.com you'll find that all the information you need you'll get see how cool it looks

00:41:32   really cool built for kids

00:41:35   Last thing I noticed there's in the little virtual kitchen you get there's a little virtual kitchen surrounding your fridge

00:41:42   They even have a toaster and you can write messages on a piece of toast and keep that in there

00:41:47   So I feel like there's something in here

00:41:49   You could tie this together with that Tim Cook line last year about

00:41:55   Combining a toaster in a refrigerator, but those things are probably not going to be pleasing to the user

00:41:59   Well, here's an app that combines a refrigerator and a toaster and it's actually pretty cool. So maybe maybe Tim Cook was wrong on that

00:42:06   Once again, my thanks to infinite refrigerator go check them out at infinite refrigerator calm

00:42:12   So the stock yes, all right, what do you want it? What do you want to say about this stock?

00:42:19   I try not to write about the stock, but I feel like what's happened recently is so extraordinary that it's so absurd

00:42:25   that you can't not talk about it. Right. And I tried to spend at least a little bit of time trying

00:42:32   to understand the situation with the options, with the call options on this. Why, because you had

00:42:42   posted a link to something from November explaining why there is a large block of options out there,

00:42:53   so that with prices in the range of like 550 to 800 or something like that. So it is in

00:43:02   the best interest of these money managers who have those options out there to try to

00:43:08   keep Apple's price down until they expire.

00:43:11   I don't know what – I don't know enough about the stock market to know what like an

00:43:16   option like that costs for. But let's – the gist of it though is that back in the summer

00:43:20   when the stock was flying really high, like up around $700, and spent most of the summer

00:43:26   in the 600s.

00:43:29   People who bought these options, options come with, have an expiration date, and it seems

00:43:36   like a lot of them expire this week.

00:43:40   At price points, let's say, like you said, $550 to $650 or something like that.

00:43:43   People who thought the stock would still be like that.

00:43:45   So you'd buy the option for, let's say, I don't know, I don't know, I'm throwing this

00:43:51   out there, 10 bucks, I don't know.

00:43:53   Maybe it's higher, it's got to be higher, maybe it's higher.

00:43:55   But you buy the option for $10.

00:43:56   You don't own the stock, you're not buying the stock, you're just buying the right to

00:43:59   buy the stock at a certain price at a certain date.

00:44:04   And you're betting that come January 19th, Apple stock will still be up at like $700

00:44:10   And your option to buy the stock at $550 means you can buy a whole bunch of shares of Apple

00:44:15   at 550 come January and it's already worth $700 because that's what the stock is at.

00:44:22   And then you make money – you made money by betting that the stock would be higher

00:44:26   on that date than the option price.

00:44:29   And on the converse side, the person who sells these options is making sort of the opposite

00:44:36   bet.

00:44:37   if come the date that the options expire, the stock is under that striking price for

00:44:43   the option, they win because they keep the money that you paid for, that 10 bucks per

00:44:49   share that you paid for the option to buy it, and they still own a share that they had

00:44:54   to buy to cover these options if the person had actually bought them. But because it's

00:44:58   under the price, they don't have to sell it.

00:44:59   Right.

00:45:00   Is that – did that sound right?

00:45:02   That sounds right to me, yes.

00:45:04   Right so that there's all these institutional investors who and and the guy you know and I guess these options you can you can like

00:45:11   Look up what the options are I mean it wasn't like he was making stuff up like like we do

00:45:15   He was actually found on you know all these out

00:45:18   You know he was tallying all the options that are out there just at five hundred and fifty dollars

00:45:22   And it was like I don't know six hundred million dollars worth of them

00:45:25   And that wasn't counting the ones at higher prices, and so it's easy to say that there's

00:45:31   well over a billion dollars at stake if Apple's stock is like at 500 or lower in the next

00:45:38   two days.

00:45:39   Yeah.

00:45:40   Which in turn leads to, you know, the people who have those options, certainly motivates

00:45:44   them to sort of poo-poo, badmouth the stock and make, you know, these arguments like we've

00:45:50   been talking about earlier in the show about why Apple's in trouble and that they're not

00:45:53   doing too well and the stock is down.

00:45:55   And we should say that the bulk of this recent decline in Apple's, I don't even know what

00:46:03   it's at now actually, but the sort of the doldrums that they're in right now is because

00:46:08   a couple of publications came out and said that iPhone 5 demand was soft based on the

00:46:13   fact that they had heard from some people, nameless people, that Apple had cut orders

00:46:21   for iPhone 5 screens in half without really getting into what exactly that means.

00:46:30   Right. I mean, here's the Wall Street Journal version of it. There were two publications

00:46:36   that had this, I guess, Sunday night to Monday morning. It ran on the front page, I think,

00:46:41   of the Journal on Monday. It was Nikkei, N-I-K-K-E-I. It's a Japanese newspaper. I don't know if

00:46:48   It's like the Japanese equivalent of the Wall Street Journal or what.

00:46:51   But it's Japanese and so what I know about it is all secondhand.

00:46:55   It's people I guess can read Japanese and translating it.

00:47:00   And the journal, which seemingly had the exact same information.

00:47:03   Here's how the journal story started.

00:47:07   And the headline was "Apple Cuts Orders for iPhone Parts."

00:47:12   Apple Incorporated has cut its orders for components for the iPhone 5 due to weaker

00:47:17   than expected demand. People familiar with the situation," said Munday. So there's

00:47:22   like no if, ands, or buts in that sentence, right? I mean, they're not saying who the

00:47:26   people familiar with the situation are, and they never go on to really clarify. But that's—if

00:47:31   you take that at face value, if you read the Wall Street Journal and think that, well,

00:47:34   it's the Wall Street Journal, so if, you know, if you read it, it must be true. There's

00:47:37   no hemming or hawing or—well, you know, there's two things in there. One, that the

00:47:43   components were cut by half or no it didn't say that in the first paragraph

00:47:48   but it does say in the next paragraph it says Apple's orders for iPhone screens

00:47:52   for the January March quarter for example have dropped to roughly half of

00:47:56   what the company had previously planned to order two of the people said so half

00:48:00   is a huge number that's huge it doesn't even matter what you know what what it

00:48:04   was from or two and they don't hammer ha or say maybe it's or that it's a sign of

00:48:10   of weaker than expected demand for the iPhone 5.

00:48:13   They say that, the journal says,

00:48:14   it's due to weaker than expected demand.

00:48:16   And the stock took a bath on that over the next two days.

00:48:23   I mean, it really, I think it dropped by,

00:48:25   I forget, market cap-wise, it dropped by $170 million,

00:48:30   billion dollars, which is bigger than all but

00:48:32   maybe the 10 biggest corporations in the world.

00:48:36   They dropped in value by more than the size

00:48:38   of most big companies.

00:48:39   And originally they...

00:48:42   And I wrote a lot about it this week. I think the whole thing is a pile of horse shit.

00:48:47   I really do. And the Nikai one from Japan gave actual numbers.

00:48:54   It said that they said that the original order was for 65 million displays.

00:49:00   But apparently the journal had that in there originally and then removed it.

00:49:04   and then removed it.

00:49:05   And took it out. Like Sunday night online, they had that in there. And I don't think

00:49:10   it appeared in print, and by the time I read the story Monday morning, it wasn't in there,

00:49:15   that they had the same thing. But they didn't replace it with another number, which to me

00:49:19   is a huge problem. When you say it's dropped by half, but you don't say what—you don't

00:49:25   even give a ballpark range for what the original numbers were, there's no way to ever verify

00:49:29   that, right? Because then come next quarter, Apple will release and say how many iPhones

00:49:33   they sold and we can take a pretty good guess that what percentage of them were iPhone fives based on the average selling price

00:49:39   and

00:49:42   Whatever that number is

00:49:44   You could say well the journal was right because Apple expected to sell double that no matter what it is because they didn't give the number

00:49:49   Yeah

00:49:51   It's like when Amazon says that they've sold the most kindles ever in a quarter

00:49:54   But they never tells you how many they sold so who knows you know maybe they went from 10 to 11

00:50:00   Right or that the you know I forget Amazon always does that they never reveal how many kindles they've sold, but they'll say things like

00:50:06   You know it was 150 percent higher than the previous record for Kindle sold in the quarter. Yeah, but it's you know 150 percent of

00:50:14   Question mark and if they could guess if the number it just none of it

00:50:18   Just none of it makes any sense because it seems unlikely that they would order 65 million screens for the current quarter

00:50:25   Right it really makes no sense and nobody seemed to question this or well

00:50:29   I did but it seemed like most people people who should know better never questioned it that it's such an unusual number because there's

00:50:35   the most they've ever sold in a quarter is 37 million its iPhones in a quarter and that was last year's holiday quarter and

00:50:42   This year. There's the consensus among analysts both the Wall Street ones and the independent analysts like Andy Zaki

00:50:51   Who's you know have a much more accurate track record is?

00:50:54   is about 50 million. So they'd go from 37 million last year to 50 million this year,

00:50:59   year over year for the holiday quarter. And nobody is really picking a number much higher

00:51:05   than 50. And the next quarter after the holiday quarter, they've always sold less than the

00:51:11   holiday quarter because there's so many people who buy them as holiday gifts. And now, the

00:51:16   last two years, the holiday quarter is when the new iPhone came out. So you get the double

00:51:21   whammy of both the people who are like, like us, who are like, "I want the new iPhone

00:51:25   as soon as it comes out and order it in that quarter and you get the holiday gift bump."

00:51:31   Like, so last year they went from 37 million in the holiday quarter to 35 million in this

00:51:36   January to March quarter, which is like, I think, roughly 5% drop. In all previous years,

00:51:42   there's some level of drop from holiday to the next quarter. But yet, if you take the

00:51:46   65 million number at face value, then somehow Apple expected 30 percent growth in the January/March

00:51:54   quarter after the holiday quarter, even though there's no historical reason for it and they're

00:51:59   not introducing a new model or anything like that. It just doesn't make any sense. Like,

00:52:05   if they actually wanted to order that many displays, it seems like somebody was drunk.

00:52:11   Although I guess the other argument I've seen, which I hadn't thought of, the other argument

00:52:16   I've seen, I think Horace is dead you, you know, typical of the smart, bad bastard, but

00:52:21   somebody pointed out that it could just be that they're getting higher than expected

00:52:24   yields, that maybe they, you know, had expected that only four out of every five displays

00:52:31   they ordered would be up to their snuff, and that they're finding that, you know, 95 percent

00:52:36   of them are passing their requirements, so that they, maybe they originally planned to

00:52:40   order 65 million not because they expected to buy…sell 65 million iPhones, but that

00:52:45   they needed 65 million to sell 45 million because they expected 20 million of them to

00:52:50   be duds or something like that.

00:52:51   So there's other arguments you can make, but it's still the 65 million thing just

00:52:55   does not…it doesn't make any sense.

00:52:59   And it doesn't make any sense that they would need to cut it in half due to…this

00:53:03   is the bigger part, I think, regardless of the actual number.

00:53:06   The bigger part is whether such a cutoff would be due to weaker than expected demand, because

00:53:12   there seems to be no sign that there's weaker than expected demand.

00:53:14   I am almost across the border saying that they expect 50 million iPhones sold this quarter

00:53:20   – the quarter that they're going to announce next week – versus 37 million last year,

00:53:24   which is higher, not lower.

00:53:26   And they only caught up with demand about a month ago.

00:53:28   Right.

00:53:29   They spent most of that holiday quarter with – you know, when you go to the website with

00:53:33   with, you know, like seven to ten day lead times when you ordered one. They spent most,

00:53:39   you know, up until I think December, they, you know, they hadn't, production hadn't

00:53:42   caught up with demand. They'd clearly been making them as fast as they could.

00:53:46   Tim Cynova It's ridiculous. I mean, and then of course

00:53:49   the usual collection of ne'er-do-wells have been saying, "See, we told you that iPhones,

00:53:57   nobody likes iPhones anymore."

00:53:59   Right. And the other thing I got inundated with is accusations of, you know, I swear

00:54:04   to God, one guy called me Baghdad Bob. You know, it's like, I don't know, I can't

00:54:14   win. I mean, there's no use worrying about it. I mean, but this is why I drink. But this

00:54:20   is no way, you know, they're so convinced that it doesn't matter how many holes you,

00:54:26   solid holes you can poke and say, "Boy, this just doesn't add up," and point to

00:54:31   interesting ways of looking at why it doesn't add up. It's the fact that

00:54:35   there's so many people, and it gets back to, you know, what we were talking about

00:54:38   at the beginning of the show, who are so convinced that Apple is set to fall and

00:54:42   that the iPhone is collapsing, that they just took that journal story and

00:54:50   that's it. It's the gospel, right? And so anybody who's arguing otherwise is just

00:54:54   grasping at straws because they're beloved apple.

00:54:57   Yeah, because it's a religion.

00:54:58   Because it's a religion.

00:55:02   So next week, there's a couple of things to look for.

00:55:06   Look to see what happens with Apple's share price because of these options and then look

00:55:11   to see at the conference call, part of the conference call, how many iPhones they sold,

00:55:18   which you should do every quarter.

00:55:19   But…

00:55:20   Right.

00:55:21   I do wish that they would break it out.

00:55:22   guess, you know, I mean we should, we're lucky because Apple reveals a lot more

00:55:26   sales data than a lot of its competitors. I mean, like I said, Amazon has never

00:55:29   revealed how many Kindles they've sold of any kind. Google never reveals how

00:55:37   many Android phones are sold. They just have that weird activation number that

00:55:40   they never define what the hell it means. And, you know, they certainly don't

00:55:46   reveal numbers of their own Nexus stuff, which they would know more than just

00:55:50   activation. They should know exact sales numbers. Nobody really reveals any of that.

00:55:54   So I guess you wish I mean I'm greedy though I wish that Apple would break it

00:55:57   down and say we sold this many iPhone 5's this many 4's and this many 4S's.

00:56:01   Yeah I guess so apparently I guess it's not it's not required for audit purposes

00:56:07   to do that. No but they you can kind of backwards engineer it though by at least

00:56:12   getting a ballpark estimate by looking at the average selling price and right

00:56:17   through analytics. But it's kind of weird that app developers and websites, mobile websites,

00:56:22   looking at their statistics can kind of suss out how many. Although I'm not sure if a website

00:56:27   can tell if your iPhone's an iPhone 5. I think it would just know the version number. I guess

00:56:32   it's only the app developers that get the analytics that they can kind of tell, you

00:56:36   know, what the CPU is. You can tell by screen size, right? Couldn't you do the – doesn't

00:56:43   to tell the screen size? Oh, it does. I don't know. In that instance, you can tell. I guess

00:56:49   what I'm saying is I don't know how to – I guess since the iPhone – it does report

00:56:55   the screen size, you can tell because the only iPhone with the 1136 pixel height is

00:57:00   the iPhone 5. But it's weird that Apple reports more than

00:57:03   other – I mean, Apple, which is famously – Secretive. It reports more about what

00:57:10   sell than other companies do.

00:57:12   Yeah, and you know, part of it is that they're not really secretive about everything. They're

00:57:16   really mostly secretive about what they're going to do.

00:57:18   Right.

00:57:19   And they're not so secretive about what they have done.

00:57:22   What they've done.

00:57:24   You know, and I feel, you know, I've always said this too, that, you know, and it still

00:57:27   continues even now that Jobs is gone. But Jobs' explanations on stage talking about

00:57:32   products really, I have always thought they were incredibly insightful and honest about

00:57:38   about where Apple was coming from when they made the thing.

00:57:41   You know, that it was like an honest explanation

00:57:44   of here's what we were thinking we could do

00:57:46   and here's how we did it.

00:57:46   - Yeah.

00:57:47   I went back and watched the iMac unveiling,

00:57:54   which I don't think I'd actually seen that before.

00:57:57   - I don't think I have either.

00:57:59   Wasn't he wearing like a weird suit?

00:58:00   - Yeah, he was wearing a, well, he was wearing a jacket.

00:58:04   It was like a suit with a button-up shirt,

00:58:07   button up to the top without its eye.

00:58:10   It was weird. It's like, I guess, it's sort of like if you ever thought, like,

00:58:14   you know, in a heyday in that decade-long run, if you ever, like, crossed your mind,

00:58:18   like, "Why does he wear the same stuff every day?" And then you look at some of the

00:58:22   stuff he wore before he settled on that, and you're like, "Maybe he was right to

00:58:25   settle on the black shirt and jeans," and that's it.

00:58:30   He had some goofy outfits in those first couple years.

00:58:34   He swore us like a sweater vest for a long time.

00:58:40   Right.

00:58:41   Do you have a link to that YouTube?

00:58:42   Is it on YouTube?

00:58:43   Yes.

00:58:44   It is on YouTube.

00:58:45   I can find it for you.

00:58:46   Yeah.

00:58:47   You should send me that.

00:58:48   We'll put that in the show notes.

00:58:49   Yeah.

00:58:50   But it's interesting.

00:58:51   I thought it was just funny how he touts the mouse as like the best mouse ever made.

00:58:56   You know, you can get people fired up about that.

00:58:57   You know that my wife is an enormous fan of the hockey puck.

00:59:01   Are you kidding me?

00:59:02   Loved it.

00:59:03   I forget. She tweeted about it a couple months ago, and a couple of other of our nerd friends,

00:59:08   a couple of them chimed in and said, "You know, I liked it too." It was not universally despised.

00:59:13   Although I think it was majority despised.

00:59:16   Tim Cynova Yeah. I had a little like, they just, they sold like these clip-on things,

00:59:22   these plastic, like a clip-on tie, with basically a piece of plastic you clipped on it to make it a

00:59:28   more like a normal mouse.

00:59:30   Yeah, I never had a computer that came with one of the round mice, so I never really spent a lot of

00:59:36   time with it. I mean, it's... But I guess the argument, the main argument about it was that

00:59:42   because it was perfectly round, there was no way to tell which way it would... When you just held it

00:59:47   without looking at it, you couldn't be certain what the orientation was. Yeah. Yeah. Not a fan.

00:59:54   a lot of people thought it was uncomfortable too.

00:59:56   It was wide, which I liked because it just, that felt good, but I couldn't tell which way it was

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01:02:59   else? What do we got left on the agenda? Here's a question. And again, this is one of the

01:03:06   reasons why I sometimes feel out of place talking about the stock. I'm not really a

01:03:10   stock expert and my Apple's stock price is not really the reason that I follow them.

01:03:17   I don't own Apple stock because I don't feel like it would be appropriate with what I do.

01:03:26   I do feel though that it's it is like it when it really fluctuates like it has recently

01:03:32   It's a level of absurdity that even somebody like me is not an expert can can see that this just is irrational

01:03:39   You know that it's not built on based on what what investors call the fundamentals meaning the numbers, right?

01:03:45   There's there's so many

01:03:49   It's like 12 dimensional chip. It's like trying to understand 12 dimensional chess, right?

01:03:53   There's so many other things that go into it, and so many things that are just straight

01:03:58   out gambling that have nothing to do with the company at all, like these option calls,

01:04:06   that it seems like they're just better off not worrying about it.

01:04:13   So there's a measurement of a company stock price called the P/E ratio, price to earnings.

01:04:19   And again, correct me if I'm wrong, but the basic idea is you take the company's profits

01:04:26   and you multiply it by a certain – or you take the company's stock price and you divide

01:04:31   it by what their profits are, and that's the P/E ratio.

01:04:34   In other words, the price of the stock versus how much profit they're making, I guess,

01:04:40   quarterly.

01:04:41   And like the average for the S&P 500 is 15.

01:04:45   In other words, the average stock price of a big company is about 15 times the profit

01:04:50   of that company. And you know, some companies are higher, some companies are lower. But

01:04:54   you know, 15 to me seems like a reasonable…somehow it makes sense to me. That seems about right.

01:05:02   What, 15 is, you know, four years quarterly? You know, so a company is worth about four

01:05:10   years times its profits? I don't know. Sounds about right. Apple's is at like 10. And if

01:05:16   you subtract the hundred billion dollars in cash that they have in the bank, which seems

01:05:20   fair because if you're just going to say, here's what the company's worth, which is

01:05:24   what the stock price is supposed to represent, well, the cash you should be able to just

01:05:28   subtract from that. If you subtract that that massive amount of cash, it's nine. So their

01:05:34   their PE ratio is way less than the average company. Yet they've been in the midst of

01:05:40   this incredible growth over the last couple of years. And the number that gets me is Amazon's.

01:05:46   Amazon's P/E ratio, and I'm not making this up, it's like 2,600. It's not an exaggeration.

01:05:55   Amazon lives in like this—I linked to a Matt Iglesias article a while ago that Amazon

01:06:00   lives in this world where investors do not care about their profits, that their stock

01:06:05   The stock price is not, bears no relation to their profitability whatsoever.

01:06:09   They're the market share poster child.

01:06:11   Right. And Apple, I think, is almost the opposite.

01:06:14   Right. I was just going to say, they're two ends of the spectrum.

01:06:17   Even though they have profits. Massive profits.

01:06:20   I just, I don't get that. It seems like it's still the same old dot-com bubble mentality where,

01:06:28   "Oh, yeah, they're not making any money, but eventually, eventually they'll make money."

01:06:34   I mean, Amazon's been doing this for 15 years.

01:06:38   Yeah, I feel like with Amazon, Amazon's interesting.

01:06:41   And I have to admit, I don't get that strategy.

01:06:44   Like to me, it's just, it's not just because it's Apple, but I, there's something, you

01:06:49   know, I think it's part of what just appeals to me about the whole thing is that I understand

01:06:53   what Apple's doing is making money every time they sell something and then just putting

01:06:59   that money away and not squandering it.

01:07:00   Now, I understand that.

01:07:01   That's not how I behave in real life.

01:07:03   I make money and then I squander every dollar of it. But I wish that I had the discipline

01:07:08   to build up a huge, you know, $100 billion cash hoard.

01:07:13   And before the show, when I was making notes, I wrote down the 100—I wanted to talk about

01:07:17   this—and I wrote down 100 billion cash. And I thought, "That can't be right. No,

01:07:21   it's 10 billion, right? It can't be 100." But it is. It's 100—they have $100 billion

01:07:25   in cash that they're just sitting on. But when I wrote it down, it seemed like a preposterous

01:07:31   number.

01:07:32   It does seem preposterous. It seems crazy.

01:07:36   Right. But it doesn't seem to have any kind of value in that it doesn't become valuable in the

01:07:43   stock. And you know, I guess you could argue maybe reasonably that the run-up that Apple had

01:07:50   last year over the summer when the stock price reached its peak, maybe that was a little

01:07:55   irrational too, just as irrational as the dive that it's taken in the last three months. But,

01:08:02   even at its peak, their PE ratio was still like, never got more than like 12 or 13. It still never

01:08:10   reached the average PE ratio of a company in the S&P 500. That you could make a reasonable case

01:08:16   that only looking for a PE value of the average company in the S&P 500, that Apple stock should,

01:08:22   you know, should be up at around, I don't know, 800 or 850 or something like that.

01:08:25   I had a screen capture that I had for a little while, and I finally eventually just deleted

01:08:31   because I didn't know where to post it. But it was our local paper, I followed their Twitter

01:08:37   account. And I think they're just, they're pulling wire stories for this stuff because they don't,

01:08:41   they don't follow this directly themselves. But it was back in October, I think when Apple,

01:08:49   both Apple and Amazon were reporting their quarterly numbers. Apple had a good quarter,

01:08:57   missed the analyst estimates of course again. But Amazon reported a loss, if I remember

01:09:07   correctly.

01:09:08   Yeah, I think the last quarter Amazon reported a pretty big loss, like $247 million.

01:09:11   Yeah. Both of the tweets which came within 15 minutes of each other or something like

01:09:18   that said about each of them, "Apple misses analyst's estimates.

01:09:26   Amazon misses analyst's estimates," as if the two both had equally bad quarters.

01:09:33   When Amazon reported a big loss and Apple made a whole crap ton of money.

01:09:39   Darrell Bock Yeah, and you've written about this pretty

01:09:42   well about when Apple does miss the analyst projections that it is so… the way it gets

01:09:51   played in the stories is so misleading. It is… and again, I'm not trying to be a

01:09:57   reflexive "defend Apple at all costs and paint no matter what the news is" is good

01:10:02   for Apple, but it emphasizes "miss, miss, miss, miss, miss" and doesn't mention

01:10:09   that it was the miss involved $8.2 billion in profit.

01:10:13   Right.

01:10:14   And it's sort of – I mean I think the idea, if you want to take their point of view,

01:10:18   is that it's an industry shorthand for if you have money in Apple, you might have just

01:10:26   overestimated because if you were betting on what the analyst said, then they weren't

01:10:33   quite right.

01:10:34   But for the average person, they don't understand that.

01:10:39   They just think Apple had a bad quarter.

01:10:41   Right.

01:10:43   And it's entirely – yeah, because they don't put that context in there, right?

01:10:48   And it emphasizes only the – it emphasizes only the miss.

01:10:53   And the miss is just of numbers that analysts pull out of their hats.

01:10:57   I mean, not entirely.

01:10:59   You know, I –

01:11:00   It's based on something, but it's never –

01:11:01   Right.

01:11:02   They've got spreadsheets that they're looking at.

01:11:03   But they're just making a guess.

01:11:05   I guess, hopefully in most cases, an educated guess, but it's still just a guess. And

01:11:10   you look at things like, well, year over year, how are they doing? And it's up, up, up,

01:11:14   up, up, you know. Even in the quarter with the miss, it was up, up, up. It's just that

01:11:20   it just wasn't up as high as a lot of these analysts had guessed. And it's just, you

01:11:25   know, and again, I'm not saying that they shouldn't report that, but it just seems

01:11:27   like the way that they presented is so heavy-handed. And I think part of it, even if you don't

01:11:33   have to be have an apple bias a specific anti-apple bias but I think it's this

01:11:38   mindset that we've written so many good things about Apple and their success

01:11:41   that we need to emphasize anything that's bad in the name of objectivity

01:11:49   you know I think that's you know it gets back to why everybody jumped on this

01:11:53   and ten agate story you know so it's such fervor is that well here's

01:11:59   something we can say that Apple did that is imperfect and now we're going to

01:12:03   to hammer it into the ground.

01:12:06   It's very strange to me that they come up with such vastly different numbers.

01:12:13   It is.

01:12:14   And I'll tell you, here's the point I wanted to make, was that it seems like Apple's

01:12:16   getting hurt because for a long time, Apple would offer their own guidance.

01:12:21   They still do.

01:12:22   I think they're legally obligated to it.

01:12:23   At the end, after they report the last quarter, they offer guidance for the coming quarter.

01:12:28   Apple notoriously offered

01:12:30   Sandbagged guidance, you know in other words, you know

01:12:34   They it was not what Apple honestly expected to report

01:12:38   It was it was a number that it was a number they were sure they were comfortable

01:12:42   We're yeah, it was a number they would pick their

01:12:45   their

01:12:47   Numbers and they'd be a little you know somewhat higher than Apple's project own projections

01:12:52   But all of them were short of reality and I think that what's happened over the last year is that you know

01:12:58   they've finally caught on that Apple's projections are so low that they've adjusted

01:13:05   their own to be even higher to compensate and that they've really more gotten good.

01:13:10   Right?

01:13:11   Right?

01:13:12   It's like even the miss that they reported last quarter wasn't that far off.

01:13:18   It was actually so like it's really not so much that Apple missed or came way below.

01:13:23   It was that these analysts projections were actually pretty spot on for a while.

01:13:28   once instead of coming in way under and having Apple blow them away.

01:13:33   Right.

01:13:34   Yeah.

01:13:35   Which is another – yeah, it's just another element of the whole thing that makes this

01:13:41   also incomprehensible and I throw my hands at that trying to figure this stuff out.

01:13:47   It doesn't seem like – you always think, "Well, maybe the people who are really into

01:13:51   this stuff, they know all this."

01:13:52   But it really – I don't get that sense.

01:13:55   No.

01:13:56   And I think the analysts know all this.

01:13:57   And I'll bet most of the people out there who listen to the show,

01:14:01   I'll bet a lot of them do own some Apple stock.

01:14:03   And hopefully the way that they do it is just buy it when somebody--

01:14:07   like last week, when somebody prints something stupid

01:14:09   and the stock drops down.

01:14:12   Buy it then, and then just put it away and don't look at it.

01:14:16   And assume that it's gone up and will keep going up in the long run over time.

01:14:20   But if I owned Apple stock and looked at the numbers

01:14:25   and week to week and jackass by jackass. I would have indigestion. I would be like sick.

01:14:31   [Laughter]

01:14:32   Mike: So much of it – and the thing is it's – there's that famous phrase that's always

01:14:38   in – if you get like a statement from your mutual fund company and it's like past performance is no

01:14:44   indication of future performance or something like that. And it gets back to that point about

01:14:49   whether or not Apple needs a hit. And whether or not they sold a lot of iPhones this past quarter,

01:14:57   I mean, that's done. It's the stuff that they're going to do in the future that's going to get you

01:15:03   growth potential out of the stock, provided the market doesn't do something dumbass like

01:15:11   like it's been doing the last week.

01:15:14   So you kind of have to decide based

01:15:18   on the history of the company-- I mean,

01:15:21   I guess you base this judgment on the history of the company

01:15:24   and the management of the company,

01:15:25   whether or not you think that they're

01:15:27   going to be able to do something in the future that's

01:15:30   going to be a big hit and they're going

01:15:31   to get a lot of growth out of.

01:15:32   And I don't understand-- you could

01:15:34   say that Steve Jobs is the only one that could innovate at Apple

01:15:37   and so therefore I don't think the company's going to do.

01:15:41   They're just going to make iPhones and iPads

01:15:43   and Macs for the rest of forever

01:15:46   and they'll never have another breakout product.

01:15:49   But I don't, that seems incredibly short-sighted to me.

01:15:53   And I don't own the stock, but just for--

01:15:55   - The thing, and it's, I just feel like all of them,

01:16:00   all of their executives, but Tim Cook in particular,

01:16:03   he's the one, you know, he's the one who sits on the throne now. My hat is off to him for

01:16:10   just not blowing his stack and going nuts because there's no way he can't win and he surely knows it,

01:16:18   right? So he's getting excoriated now because Apple hasn't released a major new innovation

01:16:23   disruption since he took over as CEO. And if and when eventually they do, I guarantee 99, 99, 99,

01:16:33   times out of a hundred, 99 chance out of a hundred, it's going to be dismissed as, "Wow,

01:16:39   that's terrible. This guy's no Steve Jobs." And if Jobs had died two years earlier and

01:16:47   the iPad, exactly as it is, exactly as it was in 2010, was introduced under Tim Cook,

01:16:54   that whole, "Oh, it's just a big iPhone. Meh, you know, that's it. It's just a nine-inch

01:17:01   it would have been ratcheted up to 11 as it's nothing but a big iPhone total turd

01:17:07   This guy is no Steve Jobs

01:17:09   All he did is take the iPhone and make it 10 inches guys an idiot apples apples doomed and

01:17:15   They still would have sold just as many right because real people that tune out to they go and yeah

01:17:21   I go in the store for the most part. That's cool. This is cool

01:17:24   I'm gonna buy but I think it would have been you know and and you know

01:17:26   I I expect that whatever you know Apple's next big thing is it's you know

01:17:30   Like, almost all of their things that have been innovations don't look like innovations

01:17:35   to the people watching right away, to most people.

01:17:41   That's just not how it works.

01:17:46   Under Jobs, there was enough faith that they would just say, "Eh, kind of a turkey."

01:17:52   But now that he's gone and everybody is looking for this doom situation, this "Apple

01:17:56   can't function without Steve Jobs," the exact same thing is just going to be turned

01:17:59   up to 11. Yeah. So it'll be interesting to see when they do release something. And I

01:18:06   personally don't have any doubt that eventually within the next few years they'll enter some

01:18:14   new market. I would think they have to. Yeah. I think it's inevitable. But I just don't

01:18:20   know that you – it'll happen when – you can't make it happen now. There was no way

01:18:27   to make the iPhone sooner. Yeah, you can argue that, "Wow, it took six years between the

01:18:31   original iPod until they did the iPhone. Why couldn't they do that sooner?" But there was

01:18:36   no way. I mean, the iPhone was so ahead of its time technologically. I just don't think

01:18:41   there was any way to make it before. There weren't chips or touch screen. None of the

01:18:45   technology existed.

01:18:46   Tim Cynova You could argue that the fact that – I mean,

01:18:49   this is – I know people are going to roll their eyes at this, but the fact that they

01:18:52   haven't introduced something is just proof that the company is actually still the same

01:18:57   because companies that are bad throw crap out the door every day and respond immediately

01:19:06   to whatever is going on in the market and try to match what's happening, whereas Apple

01:19:11   sits on their stuff and makes sure they get it right before they send it out the door,

01:19:18   which is why these things only come out every three to six years or whatever it is.

01:19:22   Right.

01:19:23   And in the meantime, they're going to keep doing what they've always done, which is iterate

01:19:26   on the stuff that's already out there and popular as aggressively as they can. And iteration

01:19:32   to iteration never really making any single great leap forward, but yet, you know, and

01:19:39   with a little bit, even just a little bit of hindsight, making remarkable progress,

01:19:42   right? I mean, three years ago, they were still selling the iPhone 3GS. I mean, you

01:19:46   compare the iPhone 5 to the 3GS and it's, you know, it's like night and day. That's

01:19:52   the other thing that kills me about these, the pessimists on Apple that say that like,

01:19:57   I keep saying over and over again that innovation in smartphones is over. Like, smartphones

01:20:01   are done, so they've got to move on to the next big thing because smartphones have been

01:20:05   completely commoditized. And it's like, are you nuts? It's like, I can't believe

01:20:10   anybody would think that when there's so much more room for faster computing and faster

01:20:17   graphics and thinner phones and more durable materials and I mean just the camera alone

01:20:27   is making such unbelievable progress year over year. I mean that's like the one thing

01:20:31   where I can almost tell like when I look back at like family photos and stuff like that

01:20:37   like I look back at the ones I snapped on my iPhone two years ago and they look terrible

01:20:41   like just from a technical perspective. Just camera technology alone is, there's so much

01:20:49   room for potential for new hardware and stuff going forward. Makes me nuts.

01:20:56   Hey, I'm going to see you at Macworld.

01:21:01   Oh yeah, I'm going to Macworld. That's worth being on the show. Everybody out there,

01:21:07   everybody should go to Macworld Expo. What is that, two weeks?

01:21:09   Two weeks.

01:21:10   I think we'll be there two weeks from today.

01:21:14   I think I'm on a panel two weeks from today.

01:21:17   You want any panels or anything?

01:21:18   You're speaking?

01:21:19   Mike: Not that I know of.

01:21:20   Not yet anyway.

01:21:23   I often get drawn into something late because I always book late.

01:21:26   I am booked.

01:21:27   I am now booked as of a couple of days ago.

01:21:32   But yeah, looking forward to it.

01:21:35   I haven't been to San Francisco.

01:21:36   That's fair.

01:21:37   On the talk show where I get to see you.

01:21:38   I'll see you soon.

01:21:39   That's right.

01:21:40   That's right.

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