127: Congratulations, You're an Analyst


00:00:00   [Music]

00:00:08   From Relay FM, this is Upgrade, episode 127. Today's show is brought to you by Mac

00:00:15   Weldon, Encapsula, and Squarespace. My name is Myke Hurley, I am joined by Jason Snell.

00:00:19   Hi Myke Hurley, how are you?

00:00:21   I'm very well, Jason Snell. Oh, look at that. I was a poet and I didn't even know it. How are you?

00:00:28   Fine, Myke Hurley, I'm feeling churlish.

00:00:33   Nope, I didn't do it.

00:00:34   - Close, close, very close.

00:00:36   Now we have a big show planned today

00:00:39   and we actually start off with quite a lot of follow up.

00:00:42   So we should just jump straight in.

00:00:44   I mentioned last week that I bought

00:00:47   one of those bridge keyboards.

00:00:49   - Yep.

00:00:50   - That we were talking about.

00:00:51   So my unit arrived and it doesn't work.

00:00:55   I have the missed keys issue.

00:00:58   - Yeah, so it's the same thing that I saw twice.

00:01:01   - And that Federico had as well.

00:01:03   - Yeah, they obviously just got a bad batch of keyboards

00:01:05   and it is, I feel like they should maybe test

00:01:08   all their keyboards.

00:01:10   - If this is, this is happening,

00:01:12   every person that I know that has bought one of these

00:01:14   has had this problem.

00:01:16   So I was talking with their support team,

00:01:19   they gave me some things to try,

00:01:20   which I didn't bother doing because I knew it was pointless.

00:01:23   - Yeah, indeed.

00:01:25   I disconnected and reconnected it, but that was it.

00:01:28   I wasn't gonna erase my mic.

00:01:30   - Your network settings. - Network settings.

00:01:31   I'm not doing any of that.

00:01:32   This is unnecessary. - No.

00:01:34   I did that, but it does nothing.

00:01:36   - Did you? - No.

00:01:37   - Okay. - I did.

00:01:38   - I didn't do it because I know other people

00:01:40   have had this problem, right?

00:01:41   Like this isn't isolated to my iPad.

00:01:43   Like I'm very confident of that.

00:01:46   So I am going to send it back to them

00:01:49   in the hopes of trying to get a working replacement.

00:01:51   I'm gonna give it one go,

00:01:53   even though this is very frustrating

00:01:55   and I have to send it via a tracked method and everything.

00:01:59   But I'm gonna do it because this is a cool product.

00:02:03   Like it's a US layout keyboard, which sucks.

00:02:06   I'm not happy about that,

00:02:07   but they only have one layout. - You suck.

00:02:09   What's wrong with the US, we shouldn't get into it.

00:02:12   - The main problem is just the return key slash enter key

00:02:15   being the wrong size,

00:02:16   which means that I hit the keys incorrectly.

00:02:18   - It's the right size, but yeah, okay.

00:02:19   - It's the right size for you.

00:02:21   I'm not saying that one is better than the other.

00:02:24   You shouldn't have a right angle in them. That's my opinion.

00:02:27   My argument is not which is best, it is the fact that I am used to something. That's my

00:02:33   argument.

00:02:34   That's true. You've been using weird keys your whole life. I get it.

00:02:37   That key shape is super weird. I don't know why it's that way. It doesn't make any sense,

00:02:41   but it is the way that it is. Anyway, also when I used it, because I did try it out a

00:02:46   little bit, it feels like my iPad is really far away from me, which is strange. It's as

00:02:51   far away as a MacBook screen would be. When I use the smart keyboard, my iPad is way closer

00:02:59   because there's such fewer keys, right? And they're all squished up.

00:03:02   That's true.

00:03:03   And there is a part of me that is wondering if that is intentional on Apple's part. That's

00:03:08   why there is only so few rows of keys, et cetera, et cetera.

00:03:12   Maybe. Maybe.

00:03:14   I do get arm fatigue when I'm reaching out. And I know that arm fatigue is like a nothing,

00:03:18   but…

00:03:19   physics of the way the smart keyboard works too, right? I mean, I think physics comes first. They

00:03:23   had to have it be something that fits like a keyboard and that you can fold over and have it

00:03:27   actually stand up and all of that and, you know, they had to have the base the size that it is. But

00:03:32   it does have the secondary effect of having you be, you know, your keyboard is very close to the

00:03:39   screen. But the reason I want this, the reason I'm going through this, what I consider to be massive,

00:03:44   and I hate returning things. I hate returning things. Me too. And I'm very frustrated that I

00:03:50   have to do this considering that, you know, this shouldn't be a problem because they know it's a

00:03:54   problem. This shouldn't still be happening, but it is. Yeah, I agree. That's why I'm so...

00:04:00   As much as I like the keyboard that I've got now, why I was hesitant about writing my review and I

00:04:06   put in the whole thing about this problem, and it's the same thing, which is it's great that they

00:04:10   they gave good customer support to me after the fact, but this is clearly a rampant issue

00:04:17   with their product and they should, I don't understand why they are wasting everybody's

00:04:21   time shipping out defective units and not just re-evaluating their entire warehouse

00:04:30   and pulling the units that are no good.

00:04:33   But the reason that I'm going through this is because the hinge is amazing.

00:04:37   It is.

00:04:38   Being able to position my iPad into any orientation, any degree, I really want that feature.

00:04:47   And for me it was not just the repositioning of it, which is huge, but also the fact that

00:04:51   I can use it without any feelings of instability on my lap, sitting on a couch, sitting in

00:04:58   a beanbag chair, wherever, not just on a table, but on my lap.

00:05:03   no other iPad case other than the ones where you snap it in

00:05:07   and turn it into a laptop like the Logitech ones

00:05:10   have given me that kind of feeling of stability.

00:05:13   And that hinge is great, right?

00:05:13   The Logitech one, it's still one or,

00:05:16   maybe it's got like a couple different angles you can place.

00:05:19   No, you can't because it's the smart connector.

00:05:21   Actually, the smart connector makes it that way.

00:05:23   I feel like there's an opportunity here for somebody.

00:05:26   I hope Bridge gets it together,

00:05:27   but I feel like there's an opportunity here

00:05:28   for somebody else to do a design similar to this,

00:05:30   maybe with a smart connector,

00:05:32   'cause that would eliminate the Bluetooth issues.

00:05:34   But having that padded hinge that allows you

00:05:37   to hold that iPad in any angle is a,

00:05:41   and use it on your lap, it's so good.

00:05:43   And then it makes it so easy to take the iPad out

00:05:46   when you're done with it, which is also great.

00:05:49   - So I'll let you know how this goes,

00:05:52   probably a couple of weeks away

00:05:53   from getting a replacement one.

00:05:55   And I really hope that it works.

00:05:57   Like I really hope. - I hope they get it together.

00:05:58   - When I send them the, I mean,

00:06:00   I said to them in the emails,

00:06:01   like I know this is a problem that you have.

00:06:03   So when I send them the tracking information

00:06:05   that they want, I can be like, please,

00:06:07   please send me one that works.

00:06:09   That's all I ask, that's all I ask.

00:06:11   There is a, currently if you're in education,

00:06:14   this is a student or you're an educator,

00:06:16   there's just a deal that Apple's doing

00:06:18   that I think is so good I just wanted to mention.

00:06:21   You can get a ton of their Pro apps,

00:06:24   so Logic Pro 10, Final Cut Pro 10,

00:06:27   Motion Flyer, Compressor 4, and Main Stage 3 for $199.

00:06:31   This is a saving of $430.

00:06:34   So you could basically for the price of Logic, you get all of those apps.

00:06:38   I think if you are in education and you're interested in this stuff,

00:06:42   I recommend getting that because that is a very, very good deal.

00:06:46   I don't see that stuff very often so I wanted to mention it.

00:06:49   Yeah, great. That's a great deal.

00:06:51   I also wanted to do some follow-out to a blog post written by Oisín of Castro.

00:06:57   He has posed the idea of Apple using rich notifications for their new in-app review

00:07:04   system over modal dialogue boxes.

00:07:06   Remember we were talking about this last week, the fact that this will pop up inside of apps

00:07:10   and ask you like, "Hey, rate this app."

00:07:13   The argument that she makes is like, you're interrupting someone, even though you're telling

00:07:17   them where you can place this, it's still an interruption.

00:07:21   And if there was a notification that came up and you could pull down and then make the

00:07:24   rating, that would be way better because people can get to it when they want to and even after

00:07:29   like they could have closed the application and could be checking their notifications

00:07:32   later on and then could write the application. So I think that is actually a really nice

00:07:40   implementation of this and you know there is a radar that Oceana's Raisin is linked

00:07:44   in the post so if you agree with it you can dupe it. It just seems like just a terrible

00:07:49   system for that.

00:07:50   So the number one reason that I don't rate apps in app is actually that I'm doing something

00:07:56   else in that app that I want to keep doing when it interrupts me.

00:07:58   I'm not just sitting and like letting the application do its thing. Like you're doing

00:08:04   stuff. Whatever it is, you're doing something.

00:08:06   I just like to have apps open and I look at them and I ponder them and wonder what they

00:08:11   might do next. No, right? We're always using mobile apps, much more than desktop apps.

00:08:18   always using them or they don't exist. Those are the two states almost always of mobile

00:08:23   apps. So the modal dialogues are bad in any, for those who don't know, modal dialogue,

00:08:28   right, where something pops up and you literally cannot do anything else until you dismiss

00:08:33   it. Those have been known, I'm gonna sound a little like John Syracuse here, but like

00:08:38   in the '80s, in the '90s, we knew that modal dialogues were terrible user experience, right?

00:08:47   people who remember the old days of the Mac, there was a time when a modal dialogue literally

00:08:52   stopped everything on your computer. You couldn't switch to another app. You just had to deal

00:08:57   with the modal dialogue. They're still bad and they need to go away. Now I get how developers

00:09:04   might be feeling like, "Well no, but I want to get in their faces. I don't want to just

00:09:09   be a notification that they can ignore." I see that, but I wonder if there's some sort

00:09:14   a combination that might be good because I actually think this would be better for users

00:09:19   and it might be not it might just be different for developers. I'd love to see like either

00:09:24   that the developers get a choice or that the user gets a choice or that the in-app review

00:09:31   notification thing, you know, whatever it is the API gets modified. So maybe you get

00:09:37   a push notification simultaneous with the in-app and then dismissing it. I don't know

00:09:43   quite how to do it, but maybe there's a way to split the difference here, because I do

00:09:48   think that you're more likely to get a user when they're not in the middle of doing something.

00:09:55   So, a good idea, very good idea, Postm

00:10:04   Machine.

00:10:05   Yes, you sent me a message this weekend saying, "I think it's time," and we have a little

00:10:09   spreadsheet that I've been collecting of movies that you've seen, or you haven't seen that

00:10:12   I have seen, and actually a few that you've seen and I haven't, or that we both haven't

00:10:17   seen. And I decided to go with, to continue with our 80s theme, and so I am happy to unveil

00:10:26   today that for Myke at the Movies on February 20th, we will be watching 1984's James Cameron,

00:10:36   Arnold Schwarzenegger, Linda Hamilton, epic, The Terminator.

00:10:40   So, this will be on February 20th, and I would like to just state for the record right now,

00:10:46   I saw this movie when I was a kid. I remember nothing.

00:10:50   Yeah, it is. In my notes column, I've got "hasn't seen, hasn't seen, hasn't seen, saw

00:10:54   but don't remember."

00:10:55   I remember when I was a kid, I had a Terminator action figure thing. It was a really large,

00:11:03   very detailed action figure of like the melted-off skin, and you could press buttons and you

00:11:10   would say like "Hasta la vista, baby." Stuff like that.

00:11:13   - Yeah, well so that's from Terminator 2 though.

00:11:15   So you may have seen Terminator 2 and not the original.

00:11:17   - Maybe I've seen Terminator 2.

00:11:18   - Terminator 2 was a much bigger hit

00:11:21   and is a very different kind of movie.

00:11:22   It's sort of like Alien and Aliens in some ways,

00:11:26   speaking of James Cameron.

00:11:27   But we, and we may get to, we may yet get to Terminator 2.

00:11:31   But we must start with the Terminator, where, yes, so.

00:11:35   - How else would I understand Terminator 2

00:11:37   if I haven't seen Terminator, right?

00:11:39   I'm assuming that the lore is strong.

00:11:41   - Yeah, unfortunately there's one of those thing crawls

00:11:43   at the beginning that tells you the entire premise

00:11:46   at the beginning of Terminator 2,

00:11:48   but then it turns into a pretty great action movie.

00:11:50   So Terminator is a very different feel.

00:11:51   We did this as an incomparable episode last year,

00:11:54   year before last, so, but I'm fun,

00:11:57   I'm happy to revisit it as a movie

00:11:59   that you either haven't seen or can't remember.

00:12:01   - Let's talk about Apple's earnings.

00:12:06   Now we have one product category

00:12:10   that we're gonna take some time today to discuss in detail.

00:12:13   You can probably guess which one,

00:12:15   but it's worth I think maybe breaking down

00:12:17   a couple of the numbers.

00:12:19   Just to kind of follow up on us

00:12:22   talking about this last week.

00:12:24   Apple had a record quarter in many ways.

00:12:27   This is for Q,

00:12:30   it's the Q1 earnings for Q4's performance.

00:12:35   Yeah, first quarter of 2017, fiscal quarter,

00:12:39   which is in human calendar terms the last three months,

00:12:44   more or less, of calendar year 2016, the 2016 holiday

00:12:49   season, which is called the first fiscal quarter of 2017

00:12:55   by Apple.

00:12:56   Because Apple's fiscal year doesn't start on January 1.

00:12:59   It starts on October 1, thereabouts.

00:13:02   Although therein lies a tale of exactly how long

00:13:05   the quarter is that we'll get to. So they had a record revenue of 78.4 billion

00:13:11   dollars. This is the highest revenue record recorded in a single quarter.

00:13:14   Right, as they predicted last quarter when they gave their guidance. The second

00:13:19   highest profit of all time is 17.9 billion and I assumed there was like

00:13:24   currency reasons and just markets and such. The most iPhones sold in a quarter was 78.2

00:13:32   million beating Q1 2016 who does sold 74.8 million. MAC revenue was 7.2

00:13:39   billion the highest ever. Services revenue was 6.4 billion the highest ever

00:13:43   and Tim claims the most Apple watches sold in a quarter. And Apple Watch revenue

00:13:49   too. He said he said both of those things so I updated my Bezos chart to say best

00:13:53   ever for this quarter. We now know that once again the Apple watches has hit a

00:13:58   a best ever high in things.

00:14:01   So we don't know any numbers.

00:14:02   - Based on these numbers, Apple is back

00:14:05   into growth territory.

00:14:06   It's not crazy growth, but it's growth.

00:14:09   And I was thinking to myself, how did they do this?

00:14:12   Like how did they sell more iPhones than ever before

00:14:17   when like it was categorically known that Q1 2016

00:14:22   performed so well because of pent up demand

00:14:25   for larger phones, right?

00:14:27   So you know, on all of the things, all of the things that they did, blah, blah, blah,

00:14:31   blah, like how did they do this? So would you like to tell me what they did or what

00:14:37   happened maybe that led to this?

00:14:40   So, well, one thing they did is they had a good holiday quarter. It's always their best

00:14:44   quarter of the year is the holiday quarter. They sell a lot of stuff and they sold a lot

00:14:47   of stuff again. So on a very gross level, that's what they did. They also guided to

00:14:53   76 to 78 million, sorry, 76 to 78 billion in revenue, and they hit 78.4 billion. So

00:15:03   they went above their guidance, which means that Wall Street reacted incredibly positively

00:15:08   to this for a couple reasons. One is they beat their guidance, which means the business

00:15:11   is actually doing better than Apple said that they were going to do. And the guidance gets

00:15:14   built into the stock price, because that's not a secret. Everybody knows Apple says we're

00:15:19   going to make between '76 and '78 next quarter, and they beat that. So they did better than

00:15:25   Apple expected, actually, or at least better than Apple was willing to predict. And then

00:15:31   their guidance for next quarter was good too. So the stock goes up.

00:15:36   One of the funny things about this is it has to do with our stupid calendar, which is that

00:15:43   there are a couple different ways you can handle financial quarters. You can base them

00:15:47   on weeks or you can base them on months. The challenge with basing them on months is that

00:15:54   the months are different sizes and the months start on different days and so a lot of accounting,

00:16:00   what they want to do is have every week start on the same day and then they count weeks

00:16:06   for their quarters. So instead of saying it's the last three months of the year, it's actually

00:16:10   the last thirteen weeks of the year. However, if you do that, you will eventually, because

00:16:17   of the stupid rotation or stupid revolution of the Earth around the Sun, right, you will

00:16:21   need a leap quarter, where one quarter gets 14 weeks, otherwise your quarters will really

00:16:27   start to drift away from the calendar. And so, this quarter, this holiday quarter, was

00:16:35   a 14-week quarter, when they're usually 13 weeks. And this happens every like four or

00:16:41   five years that Apple has a 14 week quarter. It was disclosed in the financial statements,

00:16:49   it was talked about on the call, but you know, a lot of the headlines are, and you know,

00:16:56   I did this, all of us did this, a lot of the headlines are Apple records record quarter,

00:17:03   year over year product growth on a quarterly basis. Those statements are true because this

00:17:11   is how we define quarters, and it gets reported in quarters. Quarters is the way that the

00:17:16   regulations dictate that Apple disclose, so this is how they do it. And in this case,

00:17:21   and they don't get to just change their quarters willy-nilly, they get to have these 14-week

00:17:26   quarters every so often and say that they have them and they disclose them. But it is

00:17:30   fair, and there were a couple links going around that pointed out that it is a 14-week

00:17:34   quarter, and if you want to drill down on Apple's performance during this quarter versus

00:17:40   last year, the year-over-year quarter, which was 13 weeks long, and do some division, you

00:17:46   can say this actually wasn't a better quarter than last year. Well, you can't say that because

00:17:52   the quarter is what it was. You could say that the contents of this quarter on average

00:17:57   were actually down a little bit week-by-week from the contents of the previous quarter

00:18:02   year over year because it was 14 versus 13. Now, you can, I wrote about this in six colors

00:18:10   a little bit, you could deconstruct these numbers so many different ways. The fact is

00:18:14   they are reported quarterly. You could talk about the differences in the channel and in

00:18:21   inventory management and one-time costs and all of that. The bottom line is it is a record

00:18:26   quarter for Apple because atomically the disclosure works in quarters and this is a 14-week quarter.

00:18:32   quarter. But, yes, this was a longer quarter, so the comparison year over year includes

00:18:38   more counting stats. Literally, even a slow week for Apple is going to add, when you add

00:18:43   a 14th week, is going to boost the numbers over the year-go quarter. So, a smart analyst

00:18:49   of Apple's business will look at this and say, "It's essentially flat." Wall Street

00:18:53   knows that it's a 14-week quarter. Wall Street knows what the guidance was, which was quarterly

00:18:59   guidance for a 14-week quarter. It's not really a surprise. But if you're somebody who's trying

00:19:03   to point to the raw numbers and say, "Apple's holiday this year was appreciably better than

00:19:11   last year," you can make the argument that it wasn't really, because if you take out

00:19:17   that the fact that it in the average per week was actually a little bit down, it was basically

00:19:22   flat. And that's, you know, except for services, which was way up. So there it is. There's

00:19:28   the statement. It gets muddy, it's not a scandal, it's not a misreporting, it is in some ways

00:19:36   a misunderstanding of how this works, but there it is. So now, you know, we, the problem

00:19:43   is that the quarter is what Apple defined it to be. So, it's, I think, not very productive.

00:19:50   If you want to start taking it apart, you can, but the fact is those are the quarterly

00:19:53   results and all the quarterly results you see going back historically with Apple are

00:19:58   the quarter is defined by Apple, and every four or five years there's a 14-week quarter.

00:20:02   There it is.

00:20:03   There it is. I mean, the quarter was always going to be amazing. It may have not beaten

00:20:08   the year ago, or it may have just beaten it, right? But there is something to say that

00:20:13   maybe this might be why it was record all around, was that they had one more week to

00:20:18   do it.

00:20:19   Yeah. It was a very good quarter in their best time of year, and they got an extra week

00:20:25   in the best time of year for them.

00:20:27   Yeah. It was winning.

00:20:28   put those together and that's why it's a clear record instead of what it would have been

00:20:32   probably if they had cut off that 13th week and said that the 14th week was going to be

00:20:36   this quarter in which case it would have been down slightly, very slightly from last year

00:20:41   and would have been the second biggest quarter in Apple history. That it wouldn't you know

00:20:46   that's that's a it's a fine point to make but there it is.

00:20:50   Now there is one more story from the earnings report and that is the story of our friend

00:20:55   the iPad. We're going to get into that just after we thank Mac Weldon for supporting this

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00:21:16   Let me look. Sure. Let's say yes.

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00:23:01   BOBBY Wow, they've got, uh, they've got shorts now.

00:23:03   I'm gonna have to buy some of those. Oh yeah. Getting ready for spring, man. If I could,

00:23:11   if I had my way, I would just live the entire year in a short-sleeve t-shirt and shorts.

00:23:18   I'm gonna need to move to Hawaii to do that.

00:23:21   Well I mean, you do live in California.

00:23:24   Oh in the summertime, in the spring and summer, it's only in the winter that I switch to like

00:23:29   sweats or flannel pants and the heavier hoodies.

00:23:35   But yes, I'm not complaining, I mean I don't live in Minnesota, but if I had my way I would

00:23:40   just wear shorts and a t-shirt all year long.

00:23:44   Let's talk about our friendly iPad.

00:23:46   The iPad was the only product line that did not set a sales record in the previous quarter.

00:23:54   That's true.

00:23:55   That's a little bit of an understatement.

00:23:59   The iPad sold 13.1 million units compared to 16.1 million last year and ASP was down

00:24:06   two year over year.

00:24:08   Now I would like to read some stats and thoughts from our good friend at a show, Mr. Tim Cook.

00:24:15   he provided some more color on the conference call which you collected up into tweets. Who

00:24:19   was doing the live tweeting? Was that you or Dan?

00:24:22   That was Dan on Six Colors Events. I was building charts and things like that. Yeah, he did

00:24:27   a great job. As always.

00:24:29   As always. Dan Moran. He's the man with the plan.

00:24:33   The iPod... That's how it's pronounced, but okay.

00:24:34   That's how I've decided to pronounce it. We went through this with him when he was on

00:24:37   Connected a couple of weeks ago. Dan Moran just sounds more fun.

00:24:41   No.

00:24:42   more fun. The iPad owns 85% the tablet market for tablets priced over $200.

00:24:49   Apple is unwilling to make a cheaper tablet and this could be a

00:24:54   problem for them, it can be a good thing. It's kind of difficult to know what that

00:24:57   means but it does show that they have a large part of this market which is either

00:25:03   a good thing because they have a large part of the market or the iPad owns the

00:25:08   market because the market's shrinking around it is another way to look at

00:25:12   I mean, it's difficult to know, but you know.

00:25:14   - Yeah, either the iPad market or the tablet market

00:25:17   is all sub 200 tablets because they've got 85%

00:25:20   of the over $200 tablet market.

00:25:23   And Apple, I think Apple is not interested in that market,

00:25:25   quite frankly, I mean, making a $75 tablet like Amazon,

00:25:29   is that really Apple's place?

00:25:30   Does that sound like something Apple would do?

00:25:32   I don't think so.

00:25:33   But the other, yeah, the other question is just like,

00:25:38   is it the whole tablet market?

00:25:39   It's just kind of not there.

00:25:40   But Apple's doing well in its segment,

00:25:43   but it's in a market that seems really sluggish.

00:25:46   - Now here's something that's difficult to get your head

00:25:50   around, but Apple made some adjustments to the amount

00:25:53   of iPads that they had in the sales channel.

00:25:56   So last year, they boosted it with 900 million

00:25:59   into the channel, I think to probably meet demand

00:26:02   for the new iPad, the big one, the Pro.

00:26:05   This year, they've removed 700 million from the channel.

00:26:09   So this is all inventory stuff, but it puts a 1.6 million unit swing on the channel affecting

00:26:15   the ship number, which if they would have had that number in there, the drop wouldn't

00:26:19   have been as bad.

00:26:21   And as you put out, you kind of put some commentary into your post, this may indicate that Apple's

00:26:26   drawing down inventory because there are new iPads in the pipeline.

00:26:30   It might also just indicate that Apple's got a glut of iPads that aren't selling.

00:26:33   Now explain to me then.

00:26:35   So the number that Apple report it shipped not sold to customer?

00:26:40   Yeah it's this is a this is a point of contention where Apple seems to so Apple always says

00:26:52   that the that the numbers that they give on sales figures are the numbers that they sold

00:26:59   to customers but it sounds like that's not entirely true that they put them in the channel

00:27:05   and they anticipate that they'll sell and then they don't.

00:27:09   But I'm unclear on the mechanics and exactly what they're reporting.

00:27:13   But that's the idea, is that they take a hit. I'm also

00:27:17   not sure if it's the numbers of sales versus

00:27:21   the revenue figure, if they're taking the revenue figure and tweaking

00:27:25   it because they've got stuff that they're pulling back. Also sometimes

00:27:29   what happens is that in order to move their inventory, what they do is they do a discount.

00:27:33   you know they they put on sale somewhere and that pushes the ASPs down the selling prices

00:27:39   but it it moves units because they're trying to get the galette out of the channel. So

00:27:43   I'm unclear on this point because I've been told at various points that it is a sell-in

00:27:47   number which is essentially we put it in the store and at that point we call it a sale

00:27:52   for for retail purposes and or we sell it you know we get to give it a Best Buy and

00:27:58   then for retail purposes we sold it. I've also been told at other times by Apple that

00:28:04   when they report a sales figure it means that the product actually sold. So I am not quite

00:28:09   clear on exactly what they're doing today.

00:28:12   Will Barron 1 Tim said that they got the demand wrong for

00:28:14   the quarter and apparently they did not make enough iPads to sell. Which is strange because

00:28:19   they removed them from the channel but then said they got it was very peculiar.

00:28:23   - But that's really vague, right?

00:28:25   It may be that they got demand of some model wrong.

00:28:30   That's my read on that.

00:28:31   Is that there were some models that they couldn't,

00:28:33   they'd gotten demand wrong and couldn't make up.

00:28:36   And that might be, the question is what are those models

00:28:39   look based on their average selling price?

00:28:40   I don't know, maybe it's the low end models

00:28:42   or maybe it's the high end models

00:28:43   and that's why the average selling price dipped

00:28:45   is that they actually got demand for the 9.7 Pro wrong.

00:28:49   And so they couldn't make those fast enough.

00:28:52   It also could be that like the Mini had more demand and they stopped making those and they

00:29:00   couldn't fulfill demand. I don't know. But it looks like there's a... What this says

00:29:05   to me in the big picture is that even Apple is not quite sure what people want iPads for

00:29:12   and which iPads they want because they are pretty good at nailing demand other than when

00:29:18   they're having issues of spinning up a new product, they're pretty good at fulfilling

00:29:23   demand. When they spin up a new product, sometimes demand just exceeds the supply that they can

00:29:29   offer. But in this case, there's no new iPad to speak of, and they just made a wrong call.

00:29:34   And that's interesting in the sense that it's not too often that Apple cops to being surprised

00:29:40   about demand for a product. They did it with the iPhone SE last year, where that exceeded

00:29:45   but for a launch product but this is an existing product with existing trends

00:29:49   and they seem to just get it wrong. No new iPad could have been a factor. There

00:29:54   was no new device in the last quarter of the year which hasn't been

00:29:59   that way for a while. You know I think we're still believing, well we very

00:30:04   strongly believe there'll be new devices this year, the timing who knows, but a

00:30:08   spring was our initial expectation which would be the anniversary of the 10.9

00:30:12   9.7 inch iPad Pro.

00:30:13   10.9?

00:30:14   Yeah, it would be the anniversary of the last new one.

00:30:18   The 10.9 was in the fall, the late fall of the previous year.

00:30:27   So the iPad, I mean, those two ones are the only ones that have been updated any time

00:30:31   recently and those are both basically coming up a year plus.

00:30:38   I think that's one of the issues with the iPad is there's nothing new.

00:30:43   Tim did say we have exciting things coming, whatever that would mean. I mean, he always

00:30:48   says that about the iPad.

00:30:49   Yeah, he does.

00:30:50   I'm holding out hope. Also, customer satisfaction is through the roof, not necessarily off the

00:30:55   charts but through the roof with 99% customer satisfaction.

00:31:00   Yeah, I mean, and the point there, he felt like he was kind of talking himself into getting

00:31:06   to being bullish on the iPad. Like he's always said, "We're bullish on the iPad." He's been

00:31:11   saying the same thing, right, for several years now as iPad sales have been going down.

00:31:15   It's like, "No, no, we think long-term it's great," and they would give reasons. And this

00:31:18   time he started out much more almost hesitant with the language he was using, but by the

00:31:22   end he had built up a head of steam and seems to have convinced himself that he was bullish

00:31:26   on the iPad. And this is one of those kind of examples about it where they're finding

00:31:32   ways to say positive things about the product and customer sat. You know, Tim loves that.

00:31:40   But the fact is, basically what they're saying is people who buy the iPad love it, and then

00:31:44   a lot of people buying iPads now have never bought an iPad before. So his point to analysts

00:31:49   in the call was that Apple believes that this is not a saturated market and that there's

00:31:55   a lot of potential there, which means that really when you look at the numbers, that

00:31:59   also means that Apple believes that there are a lot of iPads that are just still in

00:32:05   use. And so if sales are coming from new users, that means the existing iPad users either

00:32:10   abandon their iPads or love them and still use them and don't need a new one, and then

00:32:15   he points at customer satisfaction and says they love their iPads, so that's not it. And,

00:32:20   you know, and then you draw a dotted line and there's a cloud and a question mark and

00:32:24   you move on. But that's how Tim got from okay to bullish by the end of that statement.

00:32:31   So, as is normal with the results now, especially concerning the iPad, these statistics led

00:32:37   to a lot of people questioning the iPad's future, like what its place is and what its

00:32:40   future is, because the product continues to decline from a unit sales perspective. Marco

00:32:45   Arment wrote a post comparing the decline of iPad sales to the stability of Mac sales.

00:32:52   Marco questions the idea of the iPad being the future of computing, which is something

00:32:57   that a lot of people believe.

00:33:00   As I've said on this show and in other places, I personally believe the iPad is closer to

00:33:05   the future of computing than the Mac is.

00:33:07   Whatever it is that replaces the Mac, I think it's closer to the iPad than the Mac.

00:33:13   That's my own belief on that.

00:33:14   Marco's kind of saying that the sales numbers may prove this to be inaccurate, and he says,

00:33:19   What if, like so much in technology, the iPad is mostly just additive rather than largely

00:33:24   replacing PCs and Macs, and furthermore, has had a cooling fad effect as initial enthusiasm

00:33:30   wore off and customers came to this conclusion?

00:33:32   So he's saying that people were originally really excited, hence why it used to sell

00:33:35   so well, and now people don't care about the iPad.

00:33:39   That's why it's continuing to decline and that the Mac has been unaffected by the iPad

00:33:45   from a sales perspective as the Mac has continued to sell very steadily.

00:33:49   And then similarly on ATP this week, the guys discussed the iPad and questioned if people

00:33:53   are really using it for anything other than entertainment, and questioned if it was possible

00:33:57   to really for it to replace the Mac or PC.

00:34:01   That's a, I listened to that whole episode, which I usually do, but that was a difficult

00:34:05   episode to listen to at a few points because I felt like they were arguing different points

00:34:11   against each other and so it got really confusing because I think, you know, John and Marco

00:34:19   were making a lot of arguments that were about specific use cases and Casey was talking about

00:34:23   more broad use cases and, you know, there was a lot there but I think it's interesting,

00:34:30   it was an interesting conversation and I think Marco's post was really interesting. I think

00:34:35   there's a lot to unpack here and I suspect that we're about to do that because I looked

00:34:39   at how much you've put in our show notes about this and you are going to go off on a rant

00:34:43   in a little bit. You've taken some, you've done your homework this week.

00:34:46   - Yeah, I wouldn't call it a rant. I would call it a researched argument.

00:34:52   - Yes, I apologize. Rant withdrawn. But I think this is an interesting issue because

00:34:58   I do think that a lot of Marco's reaction is about feeling that the iPad was sold as

00:35:04   something that it didn't deliver and it's not about the iPad and it's not

00:35:09   about the future of the iPad it's more about the concept that the iPad is the

00:35:14   future of computers and that our classical computers like PCs and Macs

00:35:18   are not and that as a Mac user he is offended by that where John you know and

00:35:24   again this is why they were all taking different tax on it John says you know

00:35:28   something that I think I may have said last week on this show too which is the

00:35:32   The iPad, it's not about like the iPad now being the future of computers, it's that there

00:35:37   is a future of computers that we can see and it probably has a lot more to do with the

00:35:42   iPad in that it's streamlined, a lot of junk that computers have that we don't need, as

00:35:47   most users don't need, but that eventual device doesn't necessarily have to be an iPad or

00:35:55   a Mac or a PC. It could be sort of anything, but how do we get from there to here and what

00:36:00   device is more likely to do that. And he said, "Windows PCs could get there, maybe, theoretically.

00:36:06   It could be a modified version of the Mac that loses a lot of what the Mac has to offer

00:36:12   as a unique product, or it could be the iPad progressing and adding features, which might

00:36:16   lead to some usability issues or might not, depending on how it's designed." So it was

00:36:22   an interesting conversation that I think got to the heart of it in a lot of ways, that

00:36:28   is a battle between sort of pushing back on the vision that Steve Jobs, I think, had,

00:36:32   which was pretty soon the PCs are going to be, you know, put on the corner for specialized

00:36:39   use and that the iPad is going to reign supreme, and the reality that PCs to this point still

00:36:48   are necessary for so many different tasks, although not necessary for other tasks. And

00:36:54   realization that a standard PC as we view it today is not going to be the

00:36:58   computing device ten years from now for most people probably and what is what's

00:37:03   going to change between then and now and what devices is that going to be so

00:37:06   there's a lot there's a lot bundled in here the conversation about the iPad we

00:37:10   got some feedback from somebody this week who emailed and said don't talk

00:37:12   about the iPad responses basically we don't take requests thanks very much for

00:37:16   your feedback I think that the iPad is interesting because it's more than just

00:37:22   just the iPad, it is about where all technology goes

00:37:25   in the future, where all interfaces go in the future,

00:37:28   and whether we are converging on a single device

00:37:32   kind of future, or whether we're actually leading

00:37:34   to a point where there's just different kinds of devices

00:37:37   and you take your pick based on who you are

00:37:40   or what kind of work you have to do.

00:37:41   There's a lot in this that is not just moaning

00:37:44   about bad iPad sales figures.

00:37:49   All right, I have a point that I want to get across.

00:37:53   And we're going to talk about that

00:37:55   just after we take a moment to thank our friends

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00:39:29   and Relay FM.

00:39:31   Alright, so, here we go. I feel that a lot of the commentary about the iPad in technology

00:39:38   Technology media is written from a Mac or PC bias. Lots of people that are writing and

00:39:45   commenting about technology today are coming at this from a place of having used the Mac

00:39:50   for a long time. I come at these topics as someone with an iPad bias. I love the iPad,

00:40:02   I want the iPad to continue to get better. Ideally I would like to just work from the

00:40:07   the iPad always. I look forward to today when I am able to do 100% of my work on the iPad

00:40:14   reliably and comfortably.

00:40:16   So I wanted to just lay this out there because everything that I'm about to talk about now

00:40:21   comes from someone who has a bias towards the iPad. So like the argument that I'm putting

00:40:25   forward will be peppered with that, although I feel that there is merit to it. But I want

00:40:30   to put that out there that like, I think Marco is definitely coming to his argument from

00:40:34   a Mac bias. And he's looking for something in his argument that says that the Mac is

00:40:39   the best, and I'm looking for something in my argument that says the iPad is the best.

00:40:44   There are merits to everyone's arguments, but I feel it's important to say that.

00:40:47   I think it's important to disclose it, but I think you're both clear on that. Marco has

00:40:50   said many times that he relies on the Mac for his livelihood, and that's where he's

00:40:57   coming from. And he's somebody who converted from the PC to the Mac because of, and saw

00:41:02   the benefits of it and so really loves it. And there's that saying about how, you know,

00:41:08   people who are raised believing something are not nearly as strong as people who convert

00:41:14   and Marko converted, right? So he has very strong feelings about the Mac and you have

00:41:18   very strong feelings about the iPad. I think you're right. I mean, most people, the Mac

00:41:23   and the PC are a known thing. People grow up using them and are comfortable with them.

00:41:29   And so I think you're right, a lot of people are viewing this from a desktop. It's very

00:41:34   much like, prove to me that the iPad is something because they want to, you know, see how it

00:41:40   would improve their lives based on the context of being a Mac or PC user. I am proudly team

00:41:47   both still, and I use both platforms and enjoy them both for different tasks. So I try to

00:41:55   be, I find that there are times when I listen to these arguments and think I'm a longtime

00:42:01   Mac user and so therefore I am biased for the Mac. But then there are also those conversations,

00:42:06   we just had this on Clockwise last week where somebody was listing like, there are those

00:42:11   people who try to do lots of work on the iPad and they said, mentioned Federico Vittucci

00:42:15   and Fraser Spears and then they said, "Oh, and Jason, you too a little bit." And I'm

00:42:20   "Yeah, well that's true too, right?"

00:42:22   So I'm trying to be a little more impartial here,

00:42:26   but we all bring our biases to it.

00:42:28   So go ahead, lay it on me.

00:42:29   - So I have an argument or a point that I wanna

00:42:32   just kinda put into the rhetoric discussing these things.

00:42:35   You know, I think in the little bubble that we're in,

00:42:37   there are a bunch of arguments that we make

00:42:39   for certain things, and I wanna put this one out there.

00:42:42   So it's clear that the iPad is declining right now

00:42:47   until it finds a stable sales level.

00:42:50   I think this is something we've been talking about quarter after quarter.

00:42:52   Like I think everyone, I don't think anyone feels that the iPad will go to zero.

00:42:57   Like I don't think that that's what we're thinking.

00:42:59   Just that it's going to find a stable level like the Mac has.

00:43:04   And then when it gets there, it will stay there.

00:43:05   And I believe, just for whatever reason that I believe this, probably because of my

00:43:10   bias, that the iPad stable level will be higher than the Mac's current level.

00:43:15   So maybe it will take a couple of years to get there, but maybe it will stop at like

00:43:18   seven or eight or nine million units a quarter on average as opposed to the Mac's like five.

00:43:25   And right now, I think that it's really worth remembering that in unit sales, the iPad is

00:43:30   currently outselling the Mac on a quarterly basis by at least a factor of two, sometimes

00:43:34   three. I think this is a forgotten thing.

00:43:37   Yeah, this is, this is, um, a lot of the feeling about the iPad has to do with revenue comparisons.

00:43:46   I mean, you can make charts, hey, I make charts, right?

00:43:49   There are a few different ways you can make charts.

00:43:51   And one of the ways you can make charts

00:43:52   is to look at the revenue number,

00:43:54   'cause Apple gives you a quarterly revenue number

00:43:55   for each product line.

00:43:56   You can also do unit sales.

00:43:59   And if you want to make the iPad look worse than the Mac,

00:44:04   focus on revenue, because the average Mac sells for 2.7,

00:44:09   so almost three times the cost of the average iPad.

00:44:14   and it's 1250, the average Mac selling price

00:44:17   is about 1250 US dollars and it's 450 for an iPad.

00:44:22   So if you want to compare units,

00:44:25   the iPad looks way better than the Mac.

00:44:27   And if you wanna compare revenue,

00:44:29   the Mac looks a little bit better than the iPad.

00:44:32   - So my argument on this is that I would say

00:44:35   that in these product lines, Apple probably cares more

00:44:38   about people with the devices and the revenue they generate

00:44:41   just because the revenue they generate

00:44:43   is so far away from the iPhone.

00:44:45   Like just having people with more devices

00:44:49   in the ecosystem could add to the services.

00:44:51   They're like, I know revenue is of course very important,

00:44:54   but with the level that these products are,

00:44:57   I don't know how important

00:44:59   this actual dollar number is to Apple.

00:45:01   Like that's something that I scratch my head over

00:45:03   because the iPhone makes so much money

00:45:06   that the money made from other things

00:45:08   is maybe not as important,

00:45:09   but businesses work on money, so I'm very likely wrong.

00:45:13   However, it is the unit number that has led me to thinking

00:45:17   because I don't know if the argument that people

00:45:20   are trying to make is that the iPad is dying

00:45:23   because of the revenue.

00:45:24   I think that the argument that people are trying to make

00:45:26   is that the iPad is dying because there are less people

00:45:29   buying them, that the market is shrinking.

00:45:31   - Yeah, yeah, if you look at my four quarter

00:45:34   rolling average unit sales or revenue sales graph

00:45:38   for the iPad, you can see that there's a run up

00:45:41   and then there is a long tail down that continues.

00:45:46   - And is that long tail down that got my wheels spinning?

00:45:51   So the general argument is that people do not use

00:45:54   the iPad for work.

00:45:56   This is an argument that is both sides, right?

00:45:59   Lots of people say, like they were talking about some ATP,

00:46:02   that nobody uses this thing for work.

00:46:03   And when we see people using them for work,

00:46:05   we'll know that the iPad might win,

00:46:07   or that the iPad might replace the Mac.

00:46:09   until then it's just an entertainment device. It's just a consumption device, not a creation device.

00:46:13   Let's assume this is true. I would ask the question of how many people use the Macs that

00:46:20   they buy for work. We don't know this figure exactly, but let's assume it's a majority,

00:46:25   right? So we'll assume that a minority of iPad users use their device for work and a majority

00:46:31   of Mac users use their devices for work. But the thing that I would wonder is,

00:46:37   how many people that want or need a computer at home are buying it to do all their work on?

00:46:43   Like I would say that most people these days that use a computer for work, that computer is provided

00:46:49   by their employer and is most likely a Windows PC. Yep. So then let's assume that people want

00:46:57   computers at home or for their personal uses for entertainment, surfing the web, email and maybe

00:47:03   some work like spreadsheet stuff, document stuff. This is the basis of the argument in

00:47:09   which people say that the iPad can be a computer replacement because if you think of what most

00:47:15   people use computers for, it can and does all of those things perfectly fine or great

00:47:20   depending on how you approach it. So there is some work being done on these machines

00:47:25   but it's also entertainment. And as I said, this doesn't encapsulate the whole market

00:47:29   right? Because the Mac is in the professional world and it serves that much better than

00:47:34   the iPad can.

00:47:35   I think there's a lot of examples too and I think this is where a lot of growth comes

00:47:38   from but I think it's also a reason why the buying cycle is so long for these devices

00:47:45   is that lots of computers are sold to do basic functions. This goes to what you're saying

00:47:52   about why do you buy a computer at home if your employer provides one for you when you're

00:47:58   and it's to stay in touch and it's to do kind of like fun stuff and so much of

00:48:02   that that used to require a computer doesn't now and this is this is when I

00:48:10   always talk about my mom who had a MacBook Pro at one point right and then

00:48:16   iBook for a long time and the reasoning was that she needed to do email and

00:48:22   wanted to look at websites and for a long time those were the options but

00:48:27   But there are other options now, devices that do that, and now she's iPad, all the way,

00:48:32   she has an iPad Air, and that is her device that she uses, and she doesn't use a Mac anymore.

00:48:38   So that's an extreme example, she's retired, she doesn't have a job that she's going home

00:48:44   from at the end of the day and needing to check in on or anything like that. But I think

00:48:47   it's a good example where, and I think you're right about this, that there is a large segment

00:48:52   of people for whom a device they would buy and use at home is not being put into heavy

00:49:00   computing use, but it used to always be a computer because you had to have a computer

00:49:04   if you wanted to be on the internet. Now, you could argue that the bulk of that can

00:49:07   be taken care of via a smartphone, and that for a lot of people, the smartphone is enough

00:49:12   and that they don't even need a computer at home. I think there are some issues with like

00:49:16   screen size and stuff like that that fit into it. Not everybody's the same, but I do think

00:49:22   that there's a fundamental question there about the PC in general and whether most people

00:49:26   who are coming home from work really need a traditional PC for, they might want one

00:49:34   or feel comfortable with one, but do they need one for what they do on it?

00:49:38   And you know, it is good to bring up the iPhone, but it's not the only option. Like if all

00:49:43   anybody ever needed was the iPhone, then no iPads or Macs would be sold anymore, right?

00:49:47   Like the iPhone does most of this stuff for most people, clearly.

00:49:52   But it's not all that there is.

00:49:54   And there are people that have additional needs, whether it be that they want bigger

00:49:58   screens because they're more comfortable, etc.

00:50:01   So if we return to the premise that home computers cater for that set of tasks, right?

00:50:06   So like entertainment, surfing the web, email, some work.

00:50:10   Which device, the iPad and the Mac, is better?

00:50:13   Now we can't answer that question because it's a matter of personal preference.

00:50:18   The only indicator we have for preference is sales numbers.

00:50:21   So if we want to look at what people at large tend to prefer, let's look at sales numbers.

00:50:26   So what we know is that the iPad sales are currently declining.

00:50:30   So there are fewer people buying new iPads every quarter.

00:50:34   And I would think that given the way that the conversation has kind of turned over the

00:50:38   last couple of years, there was just something that had been playing in my mind.

00:50:42   I was like, well, what is there more of?

00:50:46   Are there more Macs or are there more iPads that are currently being used?

00:50:49   We know what the refresh rate at the Mac is because we can see that the numbers are stable.

00:50:54   So it's a strong refresh rate.

00:50:56   It's not declining.

00:50:57   People are just buying new Macs when they need them and that works out to be 5 million a quarter.

00:51:01   It's a known entity at this point.

00:51:03   But the iPad is going down.

00:51:05   So does that mean that people are abandoning the iPad?

00:51:08   So I thought to myself, how can we know which device currently has more units in active use?

00:51:12   Like are there more iPad users or more Mac users? What we can look at are sales numbers.

00:51:18   So let's assume that a machine that is currently defined as being in use is a modern machine.

00:51:27   So it hasn't been replaced, it's therefore inside the refresh cycle, so it hasn't been replaced yet

00:51:32   shared by somebody, it is a modern machine.

00:51:34   And we can assume that a likely cutoff

00:51:37   for people to update their computer

00:51:39   is when the current one cannot run

00:51:41   the most recent operating system.

00:51:43   Some people will keep it for longer,

00:51:45   some people will refresh it faster than that,

00:51:47   like people who really care about this stuff, like we do.

00:51:49   We buy these things on a faster basis

00:51:52   'cause we want more and more and more.

00:51:53   But I feel like a good cutoff point

00:51:55   is can it run the recent operating system?

00:51:58   So let's start at this point.

00:51:59   The oldest Macs that can support Sierra go back to 2009/2010. The oldest iPads that can

00:52:17   run iOS 10 go back to 2012 and then in 2013 the iPad mini 2.

00:52:25   Due to the release dates of the final devices for each of these categories, I'm going to

00:52:31   take sales data on a quarterly basis for each of these devices and cut it off at Q3 2009

00:52:38   for the Mac and Q1 2013 for the iPad. Within these date ranges, Apple sold 133 million

00:52:47   Macs and 252 million iPads. So on a raw figure, there are twice the amount of iPads that can

00:52:54   run the current version of iOS, then there are Macs that can run the current version

00:52:59   of Mac OS. So this is even cutting out everything from 2010 to 2013 sold in the iPad, where

00:53:08   there are assumed more people still living, you know, working with those devices, and

00:53:12   they're saying that there are probably older Macs as well. But I'm kind of, for the purpose

00:53:17   of this argument, because you have to stop at some point, we will class these as modern

00:53:21   devices. So they can run the current version of the operating system. So it's

00:53:26   six and a half years of Macs and four-ish years of iPads. Yeah. So if even

00:53:34   though you hear these numbers 133 million Macs and 252 million iPads you

00:53:40   may still assume that the current Mac user base people currently using the Mac

00:53:44   is bigger than the iPad market. If you make that belief you have to make some

00:53:48   assumptions and these assumptions may be as bold as every single person that's

00:53:53   bought a Mac since 2009 is still using that Mac and also 50% of the iPad sold

00:54:00   in this period are no longer in use. They're like the only ways that you can

00:54:03   bring those numbers to break right and you can change things around you can say

00:54:07   you maybe 10% of the Macs are no longer in use and 60% of the iPads but it feels

00:54:13   unlikely to me that all of those devices all of those iPads are no longer in use

00:54:18   It would be over 50% of them are not used anymore.

00:54:23   So if I was going to pull a number out of the air as to where these devices sit, I would

00:54:27   maybe say that of those devices, those modern devices, maybe 50% of the Macs are in use

00:54:33   and 60% of the iPads.

00:54:35   Because iPads, people seem to run these for longer and there's less need for replacement.

00:54:39   They typically tend to not be worked very hard or they can, whatever speeds they are

00:54:44   can cope with things.

00:54:46   know, there are iPads that my family members own, like Adina uses an iPad

00:54:50   Mini 2 just fine, she has no reason to want to change it, right? So these devices

00:54:54   I think run longer than Macs do, and also the Mac market is more likely to refresh

00:55:00   their machines because it's an enthusiast market and a professional

00:55:03   market. So if you were to say that the numbers that I pull out of the air are

00:55:07   accurate, so 50% of Macs and 60% of iPads of the modern devices that I've

00:55:11   established, you'd be left at 66 million Macs and 151 million iPads in current use.

00:55:18   So, so, um, I checked your math against, I mean, this is all guesswork based on figures,

00:55:24   right? We're trying to make some guesses here, and this is analyst stuff.

00:55:27   Yeah, I'm just making some estimates of this stuff.

00:55:29   You could become an analyst now. Congratulations, you're an analyst.

00:55:31   I am an analyst.

00:55:32   Uh, what do you get for being an analyst? Nothing. Um, Benedict Evans wrote a piece

00:55:36   in the summer last year about this that I found, and we'll link to it in the show notes.

00:55:41   Platform Wars final score and he's doing a larger bit about like who's

00:55:46   got an install base and what platforms but he used some different metrics he

00:55:51   basically guessed the estimated like years of life of a product and I think

00:55:57   what he's saying there is that you know the average year of life of a Mac is

00:56:01   probably not seven years that which is sort of where your cutoff is and the

00:56:07   average lifetime of an iPad is less than your cutoff as well, but his numbers are

00:56:13   different.

00:56:14   Yeah, I think actually I think he ended up with more Macs and iPads than you did,

00:56:20   so he thinks that the life is longer, although of course, you know,

00:56:23   percentages dwindle and all that. Anyway, he looked at how the sausage was

00:56:27   being made and came up with some different numbers and said that he

00:56:29   thinks that there are about, at least last summer, 250 million iPads in use and

00:56:33   90 million Macs and for perspective, 880 million iPhones.

00:56:37   We'll just throw that in there too.

00:56:38   But his ratio of iPads to Macs is pretty close to yours.

00:56:42   It's similar to yours.

00:56:44   And that's because they're both based on the raw numbers,

00:56:47   more or less of the sales figures of iPads and Macs.

00:56:51   - So this is the thought experiment that I'm posing here,

00:56:55   which I have no doubt is giving many people conniptions.

00:56:59   Even the chat room right now is very upset at me.

00:57:01   But the reason I'm making this argument

00:57:03   is to try and understand where should Apple place its resources. Should they be working

00:57:08   to make the iPad greater or the Mac greater or both or if they have to prioritise where?

00:57:14   And there are a bunch of arguments for each of these but I would say, personally, that

00:57:18   there being more potential modern devices to almost a factor of 2 is a pretty good one

00:57:23   for the iPad. And let's throw out my modern devices argument and just look at 2016 where

00:57:29   Apple sold 45 million iPads compared to 18 million Macs. Throughout all of 2016, we had

00:57:36   the exact same conversation about the fact that the iPad was failing. This was the thing

00:57:41   that we were talking about constantly. But it still outsold the Mac at over a factor

00:57:47   of two in the year. So the iPad continues to fall, but it has a long way to fall until

00:57:53   it is selling what the Mac sells every quarter. And even though this current belief is that

00:57:58   the iPad is dead or not the future or just plain terrible, if this is the

00:58:03   understood, why does it still sell twice the amount of the Mac? Like, and again, you

00:58:08   can say all these are iPad minis and they're being given to children, nobody's

00:58:12   doing real work on them. Again, is that over half of them that are being done? I don't

00:58:18   know about that and I don't think that's, personally, I just don't think that that

00:58:21   is the case and you know even at the prices these days as well, iPads do start

00:58:28   bumping up against the Mac, so I don't even think this is necessarily a matter of cost

00:58:33   that people go to the iPad over the Mac.

00:58:36   And nobody truly knows what people are using all these devices for, but as it currently

00:58:42   stands it's clear that more people want to buy iPads than Macs for whatever reason they're

00:58:48   buying them for.

00:58:50   And I think, for myself, after looking at this, I would argue that the current total

00:58:55   active user base for the iPad exceeds the Mac.

00:59:00   And I don't think this is necessarily the argument that a lot of people would expect.

00:59:07   It wasn't the answer I expected to get.

00:59:09   I was just wanting to confirm them.

00:59:11   I wanted to see what it looked like.

00:59:13   But I think I'd gotten so eaten up in the idea of the iPad as being a failing product

00:59:19   that I had just assumed that it wasn't doing well overall.

00:59:25   and there is undoubtedly a difference in what people use these devices for

00:59:29   but even if you assume that just a quarter of the people that bought iPads in 2016

00:59:34   were using them to get work done

00:59:36   it would be pretty close I reckon to the amount of Mac users doing the same

00:59:40   because not every Mac is bought for work

00:59:44   people buy Macs for the same reasons they buy iPads

00:59:47   and that reason can be to watch movies

00:59:50   but it's just a device that they prefer

00:59:52   so basically

00:59:54   All of this is because I think that the general tone right now is to call the iPad dead or

01:00:00   a failure because of declining sales numbers.

01:00:02   But even though it's going down, I'm actually becoming more and more okay with the fact

01:00:06   that these numbers are going down because I think it will stabilize and I think that

01:00:10   it's going to stabilize at a higher level in the Mac world and I'm comfortable with

01:00:15   that now.

01:00:16   And I do think that Apple need to keep working on the iPad, especially if they consider that

01:00:21   they want to keep working on the Mac.

01:00:23   was Mac hardware, new hardware, new places that they were going with the Mac towards

01:00:27   the end of the year. A lot of people didn't like it, but they were doing some interesting

01:00:31   stuff. Touch Bar is interesting to me. So in my opinion, the iPad deserves its focus,

01:00:36   the same focus if not more focus because the iPad has more places it can go. It has more

01:00:41   potential pitfalls than the Mac does. There's more low hanging fruit to address. And if

01:00:46   If Apple are currently able to achieve these numbers, like looking at 2016, 45 million

01:00:53   iPads, 18 million Macs, if Apple can achieve these numbers with the iPad now, I think that

01:00:58   they can do more if they keep pushing it.

01:01:02   All they need to do now is find a way to stabilize these numbers, build on it, and then I think

01:01:07   the iPad continues to have a good future.

01:01:10   There are a lot of things that can be done.

01:01:12   I think the biggest issue, I think you make some good points. It is very easy for people

01:01:18   to dismiss the iPad and not understand that more people use the iPad than use the Mac.

01:01:24   And that's, I think that is hard for Mac users to get. I mean, I had this conversation sometimes

01:01:28   when we talk about iTunes and what's to be done with iTunes, the idea that more people,

01:01:34   more iPhone users use PCs than Macs, but just do the math, right? I mean, of course more

01:01:38   people, iPhone users, use PCs than Macs. Look at the Mac market share. Look at how many

01:01:44   iPhones are sold. It can't be like looking at your numbers or Benedict Evans' numbers.

01:01:49   I mean, it's not physically possible that even if every Mac user had an iPhone, that,

01:01:56   you know, look at all the other iPhones that they sell. So, right? This is like that in

01:02:01   a way where it's hard to grasp the idea that the iPad is Apple's second most popular computing

01:02:09   platform, not the Mac, the iPad, in terms of popularity, right? I think the growth is

01:02:16   where this all comes apart because that's where we have to say, "When does it stop?"

01:02:21   And I think you are right to make your defense of the iPad, but this is the open question

01:02:26   is where does that number stop? Because it keeps going down. And everybody, you know,

01:02:31   all of us expect it to stop and turn around and we will find out what the buying cycle

01:02:35   is of the iPad. But until we do that, it's an open question about whether what's really

01:02:40   happening here is a rejection of the tablet market, that that big bump was people trying

01:02:46   it out and realizing that they didn't really want it. Or whether it is this extension of

01:02:51   life that an iPad Air is great and you don't need to buy another iPad for five

01:02:55   years and that's just how it's going to be and Apple's, you know, Apple will tell

01:03:00   you as they did at the analyst call that that's what they think is people love

01:03:03   them and new people are buying iPads all the time and therefore this is going to

01:03:07   be a great business going forward it's just not the numbers that everybody

01:03:11   expected. That I think is all a nice argument but it's going to be met with

01:03:16   skepticism until that quarter arrives and probably several quarters where the

01:03:21   iPad shows stability and perhaps starts returning to growth. I don't think

01:03:25   anybody's even expecting or wanting exponential growth from the iPad but

01:03:31   right now it looks like the water is draining out of the bathtub and that is

01:03:37   a that's a problem of perception for the iPad and it's a problem when you're

01:03:41   trying to gauge the size of the iPad market if you're somebody who's a

01:03:44   software developer and you're trying to guess how much effort do I put into the

01:03:48   iPad version of my software, you're looking at the at the sales figures

01:03:52   going down and there's a real question of like how many people could I sell

01:03:55   this to and you kind of don't know what's that number. But you know so I

01:04:00   think as much as I understand your points and I think that they're good,

01:04:04   I think that there is always going to be skepticism applied to the

01:04:08   iPad until we finally see some stability and the fact is that this quarter's

01:04:12   numbers did not give us that. And in fact, I would turn it on Apple too, which is, this

01:04:18   is not just the market's fault, this is also Apple's fault, because I feel like Apple's

01:04:25   attention to the iPad has been sporadic. I mean, I think they took their eye off the

01:04:29   ball completely when those sales figures were doing really well, and they just didn't bother

01:04:35   doing anything on the software side, and they've been trying to catch up, but even that has

01:04:38   been sporadic. And I think it's going to take multiple years of Apple really paying attention

01:04:43   to iPad hardware and software, iOS software that unlocks the power of the iPad. Marco

01:04:48   mentioned on an ATP and he's absolutely right, the iPad hardware, the iPad Pros are really

01:04:53   great and the software kind of lets them down because it's locked into some of the assumptions

01:04:57   that we made about what iPhones were supposed to be like 10 years ago almost, you know,

01:05:02   eight years ago and so this is where Apple has to step up to and show its commitment

01:05:08   to the iPad and growing the iPad and you know it's not just Apple sitting there tapping

01:05:13   its feet waiting for the iPad sales figure to turn around. They need to put in the effort

01:05:18   to turn it around.

01:05:19   David: Yeah and the Mac doesn't need to and shouldn't try to do everything the Mac does

01:05:23   but it needs to get a little bit closer towards desktop than smartphone.

01:05:27   What, did you mean the iPad there? You said the Mac doesn't need to do everything.

01:05:32   The Mac doesn't need to do everything the Mac does either, in my opinion, but the iPad

01:05:37   needs to get closer to the desktop than it currently is, and it has done. iOS 9 made

01:05:42   that happen.

01:05:43   Yeah, and that's something where I've heard people say, including that ATP episode, boy,

01:05:47   big footnote for the ATP episode here, that's something I hear a lot about, like, what can

01:05:52   Apple do to make iOS more like this and the skepticism about that and you know, windowing

01:05:59   and things like that. It's like, I don't know, as somebody who uses an iPad a lot to get

01:06:03   stuff done, I can tell you there's a lot they can do. There's a lot that Apple can do. And

01:06:09   they're on their way with some of it. Like the existence of the iCloud Drive app, right?

01:06:13   It is, when people tell me now that the iPad doesn't have a file system, I'm like, well,

01:06:17   It does, it does. There is one now. It is sort of weird in that it's a synced with the

01:06:22   cloud file system, but it totally has a file system, plus it's got plugins for other services

01:06:27   to act as, again, cloud synced, but file system. So, but it could be better. It could be a

01:06:33   lot better. And multitasking could be a lot better. The split screen views could be a

01:06:37   lot better. There's so much there that they can do, to your point of it being kind of

01:06:41   low hanging fruit, that I don't, I am not a believer that you look at the iPad and say,

01:06:45   well they can't really take it that much further

01:06:47   because it'll break it.

01:06:48   I don't agree with that.

01:06:51   I think they could take it a lot further

01:06:52   and I think, I really do believe this,

01:06:55   one, that that mythical computing device of the future

01:07:00   is more likely to come from something like the iPad

01:07:02   having features added to it

01:07:04   than it is to the Mac having it being changed into it.

01:07:09   And two, I don't want the Mac changed into it

01:07:13   because the Mac is strong at what, you know, it's good at what it's good at. People like

01:07:17   it for what it's good at. I am really reluctant to see Apple take the Mac and try to OSify

01:07:23   it, iOSify it, right, where it's going to be like more locked down and things are more

01:07:27   obscure and all that. Like, that's not what I want the Mac to do. So, for both of those

01:07:33   things I feel like the iPad is the product to really drive this stuff forward. And if

01:07:38   If your argument is that people really just care more about their smartphones than tablets,

01:07:43   I think the same statement goes, which is the improvements that Apple can make to iOS

01:07:48   to make it more functional for people who want to do more with it.

01:07:51   Some of those things may be based on the iPad because it's got such a big screen, but some

01:07:55   of those go to the iPhone as well.

01:08:00   So that's my argument.

01:08:02   And it's more that I'm attempting to just point out the fact that the iPad sells better

01:08:08   and in the MAC and what that might mean. And again, it's so easy to point to the decline

01:08:14   of the sales numbers and I agree with that. But as I said, my personal belief is that

01:08:20   that will stop. It's not going to stop next quarter, but it will stop. And I think it's

01:08:23   going to stop higher than the MAC currently is. And it's got a long way to fall before

01:08:27   it reaches that point. And I would maybe argue that the MAC starts to sell less before that

01:08:31   point as well.

01:08:32   Yeah, so when we talk about the future, I think what we, it's careful to say, you know,

01:08:37   don't say nobody uses the iPad because it's not true. But being concerned about the iPads

01:08:43   falling sales numbers and what Apple's putting into it and all that, I think is valid. But

01:08:47   you make a good point, which is there are a lot of iPads out there and people seem to be using them.

01:08:54   And, you know, this is a muddy world where new devices are coming in and old devices exist and

01:09:01   and it's unclear what the mix of uses is going to be.

01:09:06   But I think it's fair to say that for some people,

01:09:09   the tablet is the right thing,

01:09:11   and for some people it's not.

01:09:12   And that's for today.

01:09:14   And ask us again in a year and see how it's changed.

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01:11:20   It is time for some Ask Upgrade.

01:11:25   Thank you for the lasers.

01:11:26   Brent wanted to know, "Will developer responses to app reviews be public?"

01:11:30   This is something we spoke about a little bit last week.

01:11:33   And again, Apple have not made public statements about this.

01:11:38   They have not yet updated developer resources.

01:11:41   But from some of the quotes that they gave to people like John Gruber, it would appear

01:11:46   that yes, they will be.

01:11:48   developer responses will be public and they will be lined up in such a way that

01:11:53   you'll be able to see developer A is responding to customer B and the

01:11:57   response that they had. Yeah that's the that's the idea is it allows the public

01:12:03   response if somebody says it doesn't do this that the developer can say actually

01:12:06   it does and that's you know it reminds me a little bit of like Yelp reviews

01:12:12   where somebody says oh I didn't you know I didn't like this and they're like well

01:12:15   "Oh, we're sorry you had a bad experience."

01:12:16   And they put in the boilerplate responses.

01:12:20   But it does allow you to, as a developer,

01:12:22   respond to a review that's got false things in it

01:12:25   and say, "This is not accurate.

01:12:27   We do this."

01:12:28   Or, "We can't do this because of X."

01:12:30   And then people can sort of judge that back and forth.

01:12:33   - Richard asked, "How sure are you about Thunderbolt 3

01:12:36   or USB-C iMac refresh in the spring?

01:12:39   I'm excited to join and promote the new USB-C world.

01:12:42   And just one confirmation,

01:12:44   making the right choice by waiting. I also maybe would expect this iMac update to be the most

01:12:49   compatible of any future hardware features such as Touch ID and or external touch bars.

01:12:55   Jason, what do you think?

01:12:56   Uh, I am sure we answered this fellow in email. I am sure that there is a new iMac coming.

01:13:05   Spring is a question. I would think so since that should have been out in the fall. I think by

01:13:10   timing-wise that that I'm more confident about that than I am about like new

01:13:14   iPads in the spring I think they could they could possibly slip although I hope

01:13:18   they don't but new iMacs I think they got to be there in the spring I

01:13:22   Thunderbolt 3 USB C yes so I'm very confident I think if you're ready to buy

01:13:29   a new iMac you should wait because I there's got to be one coming soon and

01:13:33   it's gonna be the new generation with all the new stuff which is gonna be a

01:13:37   pain to adapt to right now but in four years or three years when you're still

01:13:41   using that great iMac the last thing you want is the to be on the last generation

01:13:46   of the old ports. Frank wants to know what apps or workflows do you use and

01:13:53   or recommend for creating podcast show notes? So I'm not a hundred percent sure

01:13:59   what exactly Frank is referring to so if Frank is asking how do we display

01:14:06   our show notes, well that's a custom CMS. That isn't really something that we can help

01:14:11   you with. But if you're referring to the notes that me and Jason share with each other, I

01:14:16   recommend Google Docs. We have a big outline. Jason saw all of my crazy ramblings today

01:14:21   in the fonts in our Google Doc that we share. And I would say that with most platforms,

01:14:30   most publishing platforms, whether it be like a Squarespace or WordPress or whatever it

01:14:35   or like simple cast or something like that, however you're getting your podcast out to

01:14:40   the world, they usually have, or fireside, there are usually entries for markdown and

01:14:47   that's a good way to do it as well. And it's just write out some markdown and publish them.

01:14:51   And we have some hosts at Real AFM that do that as a choice, you can even use our book

01:14:55   markers that we have created for our CMS or you could just type all of your show notes

01:14:59   in markdown.

01:15:00   Steve - Right, yeah and I use those bookmarklets when I'm doing clockwise, for example, somebody

01:15:03   I'll mention something and I can look up the page and tap the bookmarklet and it's added

01:15:08   to the show notes. The incomparable, I need to do that by hand. And you're also writing

01:15:12   down on a piece of paper time codes and things so that if you if you're going to do chapter

01:15:17   markers for an episode or there are things you need to edit out that heaven forbid that

01:15:23   we pause the show at some point to talk about what we're going to do next, which we did

01:15:26   earlier secret you write that stuff down and then you go back and do it. So that's that's

01:15:31   part of the process too but you know the fact is podcasting in the end you're

01:15:34   feeding things out in an RSS feed there's no unified way to get it in it

01:15:39   all depends on what tools you're using and you know that's so that's those are

01:15:44   the tools we use for this. Richard wants to know if we use Apple News. I actually

01:15:52   opened it last week because I was shamed into it by Richard and my problem is I

01:16:00   I feel like I need to do a lot of work to get it to be what I want it to be and

01:16:05   I might give it a try on my iPad because I have other sources that give me the

01:16:10   news I want to see but I should probably give it another run and that's going to

01:16:16   require a lot of customization because a lot of the stuff it shows me I just

01:16:19   don't care about. I don't want to see it. So I think I need to do a lot of work on

01:16:23   Apple News and this is actually the reason why I never got into RSS,

01:16:27   which is people love RSS feeds. I never got into it because it felt like an

01:16:31   awful lot of work to curate feeds and to mark things as unread and all of that.

01:16:37   It just seemed like an awful lot and I got my information by other sources. So I'm

01:16:42   not using it but I did use it last week. I may go back to it and sort of force

01:16:47   myself to use it just to be able to get an idea of how it works today and

01:16:53   whether it could potentially work for me if I put in that work, but I don't know. I mean,

01:16:58   I used it a lot when it first was coming out in in beta and it didn't thrill me, but that

01:17:03   was a while ago now, so I should probably give it another chance to at least, so at

01:17:06   least I can talk about its current state of affairs and not have it be kind of carbonite

01:17:11   frozen at 1.0, which is my last view of it.

01:17:15   So I know Federico's been using it again, and I haven't spoken to him about it, but

01:17:19   I'm sure he's happy with it because he keeps sending me links to Apple news links.

01:17:23   So, you know, he must be getting some utility out of it now that he's back using it again.

01:17:28   But I also know he uses RSS, so I haven't spoken to him about it, but I know he uses it.

01:17:31   I have literally zero interest in getting my news in this form.

01:17:36   So there's no point in me doing this.

01:17:38   Like I could try it out to see what it's like, but I'm not going to use it because this

01:17:41   isn't what I do. Like I get my news from Twitter and I get my news from people sharing

01:17:45   links with me. That works perfectly fine for me without having to see a bunch of stuff

01:17:50   I don't want to see. And that's how it works for me. I don't want to see world news stuff

01:17:55   all the time. I get enough of that from where I need to get it from. And technology news,

01:18:01   anything that's important, I will see it. And this is just through Twitter. This is

01:18:05   how I get my news in this way and that's perfectly fine for me.

01:18:09   Chris was wondering if the theatre mode setting for the Apple Watch could be leading to an

01:18:15   always on watch or just solving a problem. I don't necessarily follow Chris's thinking

01:18:22   as to why theater mode would call for an always on watch because it kind of does the opposite

01:18:27   of keeping it off.

01:18:28   Tim Cynova If it's always on, then a theater mode would

01:18:32   dim the screen or shut off the screen except during on demand. I think that's his thought

01:18:38   here is that if your watch is always shining, then you still need a theater mode. And I

01:18:45   I don't think that, I don't think it's like a tell,

01:18:47   because I do think it's so clearly solving a problem,

01:18:50   but you would need a theater mode

01:18:52   for an always-on watch, wouldn't you?

01:18:54   - Yeah, and I think that Apple have to make

01:18:57   an always-on watch.

01:18:59   - I agree. - This is the next

01:19:00   really big thing that Apple must solve, in my opinion,

01:19:03   for the Apple Watch, is making that screen on all the time,

01:19:06   because all of their competitors do it.

01:19:09   - I'm a little disappointed that the watchOS 3,

01:19:12   as much as we've praised watchOS 3,

01:19:14   I'm a little disappointed as far as I can tell the algorithm about sensing when your

01:19:19   wrist is moving and turning on the screen hasn't changed.

01:19:23   And given how much battery life they saved by going to watch West 3, and especially on

01:19:27   the new models that have better battery life, I'm disappointed that it isn't erring on the

01:19:33   side of turning on that screen when it senses movement even more, but it's not.

01:19:39   So like, if it detects that my wrist is moving a little bit, it should turn it on.

01:19:46   Just benefit of the doubt, right?

01:19:47   And it kind of doesn't do that.

01:19:49   And in the long run, I agree with you 100%.

01:19:51   I think like number one thing that they need to do with future Apple Watch hardware is

01:19:54   get that screen on all the time.

01:19:56   Even if it's not animated all the time, even if it's not updating the contents of the complications

01:20:03   all the time, even if like the second hands go away and the blinking stops until you move

01:20:08   and it can tell that you're looking at it, it should be on all the time.

01:20:15   And Reid asked, "Do you think Apple would ever introduce an iPad upgrade program to

01:20:19   encourage users to upgrade sooner and increase sales numbers?"

01:20:23   So I was talking through this argument with Adina just to see if it would make sense.

01:20:29   My original argument that I made today.

01:20:32   And she pointed out like that, you know, the reason that there are so many iPhone sold

01:20:37   is because so many people get them on plans or some description, right?

01:20:40   So people aren't paying $1,000 a year to get an iPhone, but they do to get an iPad.

01:20:47   And I do wonder why Apple doesn't try this.

01:20:53   Seems like a smart move to me.

01:20:55   Yeah, I think, I mean, they, they have done like installment sales of expensive products.

01:21:01   Yeah, you can get anything on financing with Apple, but this isn't the same thing.

01:21:06   Yeah, and the idea here would be that if you got, well first off, are they committing to

01:21:10   a new iPad every year in the model that you want?

01:21:14   Whereas with the iPhone they kind of are.

01:21:17   But I'm intrigued, like if you had a two-year plan, let's say, for iPad where you stay current

01:21:23   on the iPad, it's an interesting idea.

01:21:27   What you do is you turn in your old model.

01:21:29   So there's a resale value.

01:21:30   The idea is they refurb that and they sell it again,

01:21:33   or they sell it used or whatever they do,

01:21:36   those go back, those get sold somewhere else

01:21:39   and Apple gets that money back.

01:21:41   So you're really paying like you would

01:21:43   for an auto lease or something.

01:21:45   You're paying for that period, using that period of time,

01:21:47   but any other residual value goes back to Apple.

01:21:50   And on one level, I'm intrigued by that.

01:21:55   I think maybe even some of the cellular models,

01:21:58   the carriers offer something like this?

01:22:01   - They do.

01:22:02   - Right, for the cellular iPads, right?

01:22:05   So I think it's possible.

01:22:08   I think the question is,

01:22:09   does Apple feel like there's a market

01:22:11   where somebody would subscribe to an iPad?

01:22:13   And if that's the case,

01:22:14   why wouldn't Apple do that to everything?

01:22:15   I mean, why wouldn't you just put a MacBook

01:22:18   subscription program to available

01:22:20   where every two years you get the newest MacBook

01:22:22   and you just pay a monthly fee.

01:22:24   And it's in the end, you're paying the equivalent

01:22:26   of buying a new one every two years

01:22:28   and selling your old one at market price,

01:22:31   but it's spread over,

01:22:33   it's put in your bill as a monthly thing instead,

01:22:36   and now you just are on the MacBook subscription plan.

01:22:39   I'm a little surprised that they haven't done that,

01:22:42   but maybe some of that is just going into the iPhone,

01:22:44   which is their key product, and doing it there,

01:22:47   and then seeing what happens.

01:22:50   But it's an interesting idea.

01:22:51   - It is.

01:22:52   I mean, I find maybe something about that

01:22:56   being interesting in which there is clearly like the move to services. One of the things

01:23:02   about services is recurring revenue and this would do more of that, right? There would

01:23:08   be more recurring revenue if you add all of your customers on plans.

01:23:11   It wouldn't be service revenue, it would be hardware revenue. But yeah, it's that idea

01:23:16   where you're doing it as an ongoing. People on the plans are getting a little bit of a

01:23:21   deal but what they're really getting is this kind of Apple will take care of it for you.

01:23:25   But what Apple's getting is a guaranteed new sale every year or two.

01:23:29   Mm-hmm.

01:23:30   So there you go.

01:23:32   All right, if you would like to get in contact with us, send all of your email to Jason.

01:23:38   That would be really great.

01:23:40   Send it all to Jason.

01:23:42   If you want to tweet, Jason is @jsnell, J-S-N-E-L-L, and he writes over at sixcolors.com and the

01:23:49   incomparable dot com.

01:23:50   You can find our show notes today at relays.fm/upgrades/127.

01:23:55   Thanks again to our friends over at MacWeldon in Capsule and Squarespace for supporting

01:24:00   this week's show. We'll be back next time. Until then, say goodbye to yourself.

01:24:06   [MUSIC]