74: Tablet Incorporated


00:00:00   [Music]

00:00:08   From relay FM, this is Upgrade, episode number 74. Today's show is brought to you by Ministry

00:00:14   of Supply and Squarespace. My name is Myke Hurley, and I'm joined, as always, by the

00:00:19   one and only Mr. Jason Snell.

00:00:21   Hi, Myke. I do whatever a spider can.

00:00:24   Yes you do, you do indeed. Jason Mann, Jason Mann. For everybody listening now, me and

00:00:31   Jason were just talking about Spider-Man for 20 minutes and it'll be a B-side for today's

00:00:34   episode so you can go and get that if you would like to.

00:00:38   Talk more about, listen to us talk about Spider-Man and digital comics we can...

00:00:41   Yeah. Spider-Man, Spider-Man. I want to just jump straight into follow-up this week, Jason.

00:00:46   Let's do it. We'll leap like a spider.

00:00:49   Exactly immediately pouncing onto the follow-up. I'm gonna say listener Yan. I'm gonna go with Yan

00:00:55   sent us a link to a

00:00:58   iMac which was referred to as the special edition iMac. Do you remember this? Yes. I remember that well

00:01:06   Oh, yeah, that's the it's the graphite was the color because it's got a great plastic bubble. This is the classic

00:01:12   CRT based iMac

00:01:15   And this was I believe now Stephen Hackett would be able to tell you exactly but I believe that this was a

00:01:23   Faster processor it was more expensive model a faster processor

00:01:28   I'm not sure if this had a ports because the iMac DV is what added firewire across the line

00:01:35   So I'm not sure if there was a special like extra ports or something or if it was just a faster

00:01:41   processor, but it was graphite. It was it was gray. It was serious. It was not a

00:01:44   Silly frivolous colorful computer. It was the graphite iMac special edition

00:01:51   And and it's just funny. It's a reminder that Apple used to differentiate the iMac

00:01:56   And the iBook by by color like they would do eventually with iPods

00:02:01   And you know, we don't see color differentiation other than I mean we now do have gold space gray and silver on the MacBook

00:02:10   So that's something but for a long time

00:02:12   Color just kind of went away from the Mac product line

00:02:16   But back in the day, you know

00:02:18   They they had the special edition iMac and the most notable thing about it other than I think it was the top of the line

00:02:24   You know config was that it was it was gray. I

00:02:27   Gotta say looking at this now

00:02:30   That is still an incredible looking machine, you know, so striking

00:02:37   Yeah, yeah, it is it is kind of brilliant. I mean what it's timeless. Yeah, I'd say I'd say the only thing about the iMac

00:02:44   that hasn't aged well is

00:02:46   Also part of its brilliance, which is and this is a you know, one of those full credit to Johnny I've moments

00:02:52   He you know, we see these videos and he saw Johnny I've always talks about him in his white room videos about how you know

00:03:00   a product needs to be true to itself, but

00:03:03   that was so true about that about the iMac it was a computer with an integrated monitor which means it needed and

00:03:10   And you saw in the run-up to the iMac in hindsight some of those other all-in-ones that they made the molar

00:03:16   That we've talked about before that g3 beige all-in-one that was primarily for education that looked like a big tooth

00:03:24   That Johnny I've kind of struggled with how do you integrate a CRT because the CRT has the screen that you see

00:03:32   as you're using it and you don't think about it, but it's got this huge bulb on the back of it,

00:03:37   because it's got a raster-like gun painting the screen, painting the phosphors on the screen,

00:03:46   right? That CRT technology worked like that. And that's what the iMac is. The iMac fully

00:03:52   embraces that there's this giant bulb on the back, this giant tube that is the CRT. And so,

00:04:02   So on one level it is a perfect and brilliant design, on another level from the perspective

00:04:08   of now where the CRT is completely dead tech, it is particularly anachronistic.

00:04:16   But I mean that's true of classic movies now too, there are lots of classic sci-fi movies

00:04:20   that, the thing that stops me short when I watch them now is that there are CRTs everywhere.

00:04:26   You go, "Oh." And if you can see the bulk of them and the curve of the glass screen

00:04:32   and it's very clearly a CRT and you think, "Yeah, that's gone." We, in the last 10 years,

00:04:38   have basically eradicated CRTs. So when I look at the iMac, that's what I think. On

00:04:44   one level it's like, "Wow, it's really cool." On another level it's like, "Boy, the CRT

00:04:47   was dumb. It's all we had." But it's so big. And that's why that iMac looks like that.

00:04:52   But it is brilliant. It is a brilliant design. And the moment that I remember the first time

00:04:56   we saw it, we're like, "Whoa," is basically what we all said. And it totally changed Apple's

00:05:03   fortunes. That was the thing that stopped Apple from sliding into the abyss, really,

00:05:07   was the iMac. And that design was a huge part of it because it was not a super powerful

00:05:12   computer. The iMac now is the sweet spot of the Mac line, but back then, it was kind of

00:05:20   underpowered. It was not a power Mac, but the design of it was kind of spectacular.

00:05:26   Every time I see one I do wish for a little bit more color in the product

00:05:30   line again. And I know that this is just a personal taste thing like I am a

00:05:35   clearly I am a documented relatively flamboyant person when it comes to my

00:05:40   technology right? I like color, I like stickers, I like all that stuff right?

00:05:45   That is just a thing that I like so my own personal tastes would love to see a

00:05:50   little bit more color come back to come back to the line the product line. I mean

00:05:55   I've always been a big fan of the 5C for that reason, and it's why I have blue and

00:06:02   orange cases for my iPhone, and it's why I have multiple colored sport bands and stuff

00:06:07   like that. That is just what I like.

00:06:11   Well, I suspect we are going to enter an era where Apple is at least confident enough with

00:06:18   their anodization of aluminum to make the MacBook come in three different colors, and

00:06:23   it wouldn't surprise me if at some point, you know, all the laptops certainly were like

00:06:27   that. I'm not sure whether they're gonna ever offer multiple colors of the iMac or the Mac

00:06:32   Pro. Can you imagine like the like the cherry red Mac Pro? Because that's what you need

00:06:39   is it's a style thing. But it's a start. I am actually a little disappointed that they

00:06:48   don't offer iPod colors for the iPhones and for the MacBook.

00:06:55   My only thinking behind this is just for the pure logistical nightmare that it would be

00:07:01   to manage eight color options of the iPhone. In my mind, they're edging it up slowly over

00:07:08   time but you can't really have four bright colors, right? You have to have a range like

00:07:14   they did with the iPods I think. If you're gonna go down that route you'd need to have

00:07:19   what they have now so you know remove rose gold from the equation because that would

00:07:23   just become pink right they just make that a colour but you'd need to have your gold,

00:07:27   silver and grey but then you'd need to have like red, blue, orange, pink, green you know

00:07:33   you'd need a much broader spectrum and that might be why and also it's like that feels

00:07:37   like in a year maybe when the S line has not got a lot to do that's when they throw the

00:07:43   colour in. You can keep that one in the back pocket, right? Because you don't need to do

00:07:48   it now if you're adding enough as it is. Or maybe our friend, the 5SE, will be the one

00:07:53   that gets put in a bunch of colours like they did with the C.

00:07:57   Maybe. I think for stocking reasons it's complicated, but they did it with the iPod,

00:08:02   right? I mean, they had the iPod in all the different colours and it was fine.

00:08:07   Yeah, but the iPod didn't sell as many as the iPhone. That's why I think there could

00:08:11   be an issue with it, you know?

00:08:13   >> Yeah, but what about the MacBook?

00:08:14   You know, why wouldn't you do a limited edition red Mac, you know, product red MacBook that

00:08:19   you could only order online or something like that?

00:08:22   Apple's shown their ability to do this.

00:08:23   So you know, it may just be that they, I think simplicity is probably in the supply chain

00:08:30   all the way through the distribution to the retail side that, you know, it's a big step

00:08:35   for them to have three instead of one for a laptop.

00:08:38   It's been a long time.

00:08:39   It is hard not to look at those old iMacs, you know, before they went to the flat screen

00:08:44   and became kind of monochromatic.

00:08:47   They were this incredible color thing, and they all had personality, right?

00:08:52   And in the end, it got a little ridiculous with the patterns, with like the cowboy one

00:08:58   and the hippie one, the blue dalmatian and flower power.

00:09:04   But you know, they learned their lesson there, and the iMac, or the iPod, they stayed on

00:09:09   brand, right? They stayed on colors. They would make the colors more vibrant or whatever,

00:09:13   which was probably a process thing, but they had like kind of a core set of colors. And

00:09:17   they knew which, you know, ultimately I think they knew what demand was for each color,

00:09:21   so they could really kind of control that. That could be the same. I don't know. I mean,

00:09:25   maybe people aren't clamoring for a blue MacBook, but oh man, actually, you know, if there were

00:09:30   a thing that would push me over the edge to buy a MacBook to replace my MacBook Air at

00:09:33   some point, having it be in a cool color, that might do it. That might do it. So who

00:09:38   who knows? I don't know.

00:09:39   >> Got a lovely orange one, match your crazy keyboard.

00:09:42   >> Yeah, I could, I could, that's true. I mean, it's, yeah, it's just fun. Well, they

00:09:46   made those, the, the, the iBook, they had the orange, the tangerine, right? They had

00:09:51   the orange and the blue iBook at the beginning too, the, the colors you could get. So that

00:09:57   was kind of fun. It was, I mean, fun, right? Like buying a computer is, it can be fun on,

00:10:02   on its own, but adding this whole other level of like, not just should I buy a computer,

00:10:07   model do you want, but would you like it in blue or would you like it in orange? And getting

00:10:13   to decide that. That's just, that's kind of fun. So yeah, special edition iMac takes us

00:10:19   back to back, back when it was a bold move to offer a Mac in monochrome.

00:10:24   A moment ago you mentioned the supply chain, which takes us to more rumors this week. So

00:10:31   following up on last week we were talking about the potential product offering for the

00:10:34   the spring, it now would appear that the iPad Air 3 is slated to be unveiled at this March

00:10:43   event, which is still scheduled to be around the 14th, as it stands right now. There have

00:10:49   been some rumours from the supply chain, there's also been rumours from some case manufacturers

00:10:54   on what's coming from there. And basically, the iPad Air 3 is looking to be the iPad Pro

00:11:01   We're talking four speakers, a smart connector and Apple pencil support, but also a flash

00:11:07   for the camera.

00:11:09   Again that, you know, whilst that seems crazy to some, I mean, the last of the things the

00:11:13   iPad Air 2, when they basically spent a lot of time devoting to saying, look, this people

00:11:20   take pictures on this thing, so we're putting a good camera in it.

00:11:23   And if you're going to put a good camera in it, put a flash in it too, right?

00:11:26   You know, it seems at this point seems silly not to.

00:11:31   What do you think of this, Jason? Are we likely to see the iPad Pro Mini here? Do you think

00:11:37   that's what Apple--they're not going to pitch it as this, but do you think it's really going

00:11:41   to have all of the same features that the Pro has?

00:11:44   There's so much here. There's so much here. And we are going to talk more about what we

00:11:50   saw in Apple's earnings report.

00:11:52   Oh yeah, do I have a lot to say about the iPad later on?

00:11:56   And they connect, right? They connect. So what I will say now is, I think, I mean, first

00:12:02   off, this is a Mark Gurman report, and I trust him. His sources are pretty much impeccable.

00:12:08   I think this is gonna happen. I think it's interesting that they haven't nailed down

00:12:12   the date yet. I mean, that means that Apple probably hasn't nailed down the date yet.

00:12:16   That's the week of the Yosemite Conference, by the way. So Serenity Caldwell and Jim Dalrymple

00:12:19   and I are probably sitting here going, "Oh man," because, you know, that's not good.

00:12:26   I've been waiting for Apple to do an event the week that I'm supposed to be speaking

00:12:29   at a conference and it might actually happen. Not quite sure what we're going to do about

00:12:32   that.

00:12:33   Hey Apple, I'll go. Just want to let you know, if you're listening, I'll go for them all.

00:12:40   Sure. So, Gurman, you know, he's solid. It's probably a done deal. It makes a lot of sense.

00:12:46   We will talk later, but I mean, when we were talking about iPad sales last week being down

00:12:52   again, I heard from a lot of people who said they didn't update their most popular iPad.

00:12:59   Why do you think, you know, there wasn't a boost?

00:13:01   And it's a fair point.

00:13:03   No iPad Air 3 in the fall, instead the Pro and the Mini got the updates.

00:13:06   I'm keeping my mouth closed right now.

00:13:08   Yeah.

00:13:09   And those are the edge cases.

00:13:11   So I think that's that. What I will say about the specific specs that you mentioned,

00:13:18   I think it's funny. Sometimes it really does pay to ask yourself the question, what

00:13:23   are the most logical things to be upgraded in a product? Just leave everything else behind

00:13:30   and say, and walk through it of like, what do people use? What is there to be upgraded?

00:13:35   What's in other products? What are the things that... And you can make a list and not everything

00:13:40   on that list maybe will happen, but there are some things on that list that this is

00:13:45   the same process that Apple goes through, right? Which is like, what are the things

00:13:48   we could do to update this product? It's a fairly mature product. What are the things?

00:13:51   And you know, Apple Pencil support and smart connector support seem completely logical.

00:13:56   Why would you have those be one-off products on the iPad Pro? That seems like you were

00:14:00   trying them out on the iPad Pro and then pulling them to the mainstream with the iPad Air 3.

00:14:07   good since it took you a while to make enough pencils, right? So, see again, kind of makes

00:14:12   sense.

00:14:13   Still not in all the stores in London that I go to.

00:14:15   And lots of bugs in the smart connector too, right? We've heard about that iOS 9.3 fixes

00:14:20   a lot of problems with that Logitech keyboard, that Create keyboard, right? That there have

00:14:28   been bugs there. So you shake the bugs out and then you put it in the more mainstream

00:14:33   product a little bit later. The four speakers thing again we saw in the iPad

00:14:37   Pro gives you a much better sound that kind of makes a lot of sense and then

00:14:40   the flash for camera thing although the iPad Pro doesn't have something like

00:14:43   that you know you mentioned it this is Apple embracing how these products are

00:14:47   used even if their anticipation about how they would be used was maybe not

00:14:51   accurate and the iPad as a thing where you take pictures it happens you know I

00:14:56   yesterday I took a bunch of pictures with my iPad because I was sitting on

00:15:00   couch, I was reading, and I saw that my dog and cat, who are not the dog—we only have

00:15:06   the dog for a few months—they are gradually warming up to each other, in that the cat

00:15:12   no longer hates us for bringing a dog into the house. But they were sitting—because

00:15:16   the great equalizer is the sunbeam, right? So they're both sitting in a sunbeam. And

00:15:21   I knew that if I stood up and went and got my phone or some other camera to take a picture,

00:15:27   moment would be gone because I would get up and the dog would follow me around or the

00:15:31   cat would run away or something like that. But my iPad was next to me, so I picked it

00:15:35   up, I took a bunch of pictures with my iPad because it was there, it was the camera that

00:15:38   I had with me. So, you know, embracing that the iPad is going to be used for photography,

00:15:42   whether we can complain about it, it's not appropriate or whatever, it's too bad, it's

00:15:46   going to get used. So putting a flash on it, I mean, it's not going to be probably the

00:15:50   same level of technology as on the iPhone, maybe, you know, that I'm sure they're cooking

00:15:56   up even more great technology for the iPhone for this later this year but it makes the

00:16:02   iPad better to have a flash on it. Why not? Why not do that? It makes it a better product.

00:16:06   So you follow you start to follow the lines there and then you read a story like this

00:16:11   from Mark Herman and it makes sense. This is how do you make the iPad Air 2 better?

00:16:17   Yeah you upgrade the processor and all that but you do these other things yeah you add

00:16:20   these other little things and it pushes the whole line forward and it gives people who

00:16:24   who are still using an iPad 3 or an iPad Air 1 reason to buy a new iPad, which is good

00:16:30   for Apple. They need that.

00:16:32   Yeah, they really do. I want to talk about earnings, which is not something that we do

00:16:37   very often on this show. We'll talk about on this episode of This Break why we're doing

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00:19:20   Alright, so, a couple of reasons we don't usually talk about earnings. This show is

00:19:24   on a Monday, and the earnings usually come out midweek.

00:19:28   Tuesday, yeah.

00:19:29   And also, also it tends not to be that exciting, right? Like from a, it's like everything's

00:19:34   up, Wall Street's crazy, on we go.

00:19:37   Yeah, we're not, we're not a, I mean this is what I tell people when I write about it

00:19:41   in Six Colors and when I wrote about it in Macworld back in the day, it's like, I am

00:19:44   not an investor. I'm not an investment journalist. I don't have Apple stock. I don't have technology

00:19:51   stock. I don't care. I mean, I legitimately don't care about this except as a way to,

00:19:59   because this is mandated, because Apple is a public company, we get to look at Apple's

00:20:04   business and understand it better. And for me, that's the most important thing is how

00:20:09   are the products doing? Why is Apple making the decisions that they're making? What can

00:20:14   we use? How can we use this information to understand Apple and its decisions and its

00:20:19   products better?

00:20:20   And also, as people that talk about this stuff and try to look ahead, that's kind of a lot

00:20:25   of what, you know, we do as thinkers about these things. This really helps us. It gives

00:20:30   us some guidance to look ahead, because you can kind of see where the products are going,

00:20:35   Apple were not going to put all of their money into the failing area right and just not make

00:20:40   iPhones anymore. You know you can kind of see a little bit more about where they're

00:20:44   going as a company. Now for anybody that doesn't know I'll give a couple of the headlines from

00:20:49   this earnings report. Their revenue is $75.9 billion, $16.1 million iPad sold, $74.8 million

00:20:57   iPhone sold, 5.3 million max and a quarterly net profit of $18.4 billion.

00:21:05   So again, this has been said everywhere because it's an important fact, it's an interesting

00:21:10   fact and especially in our circles people use it to try and butt against the crazy Wall

00:21:15   Street analysis. This is the most profit any companies have posted in the history of all

00:21:19   companies. This amount of money, this 70 something, how much did I say, 75.9 million,

00:21:26   $5.9 billion is the most ever. And it's up on last year by a hair, right? Like it wasn't

00:21:34   an awful lot, but it was still up. And that's kind of setting the stage for something interesting

00:21:41   in that Tim Cook basically got on the call and said, "Next quarter, we're down." And

00:21:47   that is unprecedented, right? Like that is-

00:21:49   It's been a while.

00:21:51   Next month, next quarter, our iPhone sales are going to be down.

00:21:55   Jason, what is going on here?

00:21:56   Wow, that's what an open-ended question that is.

00:22:01   What is—

00:22:02   Well, you listen to the call, right?

00:22:03   Why are iPhone sales going to be down next quarter?

00:22:05   What's happening there?

00:22:06   Well, I mean, who knows?

00:22:09   It's my answer to that.

00:22:11   We don't know.

00:22:12   It looks like the iPhone has—there's a question about, like, growth has slowed, essentially.

00:22:21   isn't necessarily stopped, although next quarter is going to be down year over year. Apple's

00:22:26   got some, you know, they've got some excuses for that that I think don't, that are deflection.

00:22:32   They say, "Well, last year we couldn't ship enough in the holiday quarter, and so there

00:22:37   was pent-up demand that we had to meet in the first quarter. So the first quarter was

00:22:42   higher than it would normally be, and so it's going to be hard for us to match that in the

00:22:47   first calendar quarter of 2016."

00:22:49   2016. Yeah, I like that excuse because that means that if you would have shipped them

00:22:53   all then Q4 would, like this Q1 wouldn't have been as big, it would have been down,

00:22:59   right? That you would have been down somewhere. Conference call today would be the first time

00:23:04   you've gone down year over year instead of in three months. It just shifts it, it doesn't

00:23:09   actually change it. You can kind of understand that thinking a little bit, right? Because

00:23:13   it was selling into China for the first time and they had a lot of pent up demand and they

00:23:19   had and basically sales went through the roof because they sent sold into China for the

00:23:23   first time and then I don't know what what's the I don't know what the carrier situation

00:23:29   is like but if it's anything like the rest of the world a lot of those people won't be

00:23:32   upgraded for two years or so right is if it's similar to to places like Europe and America

00:23:40   So yeah, maybe it would have been a bit different, but that's kind of where we are.

00:23:44   And one of the most interesting things that the, and this is kind of why the analysts have all

00:23:49   gone crazy in the stock field through the floor, is that the iPhone didn't grow by like 10 million

00:23:56   sales year on year, and next quarter it's going to be down. And that's why people are kind of

00:24:02   getting so upset about this. So I've been thinking about this, right? And I mean, okay.

00:24:08   Okay, again, we're not going to talk about this from the perspective of what the market

00:24:14   feels like because whatever.

00:24:17   Is this a bad thing?

00:24:18   Like the iPhone clearly seems to have reached now its maximum and it had to happen because

00:24:27   eventually they were going to run out of people that could buy it.

00:24:29   But what it would appear to be from the surface is that as we stand right now, the iPhone

00:24:36   has seen as big as it can get, and now we're just going to be in a stage where it will

00:24:43   grow very small if it grows at all, and all you'll see now is people buying new ones.

00:24:49   Is that what we're likely to see, do you think? Like, is that the situation that we're in?

00:24:55   So I think one of the challenges is that a lot of the language that Apple uses to communicate

00:24:59   with Wall Street and financial analysts is about growth, because that's what they're

00:25:02   concerned about is growth. And so for the average everyday person, they can misinterpret

00:25:08   that as being a discussion about iPhone sales stopping. Like, what they're talking about

00:25:13   is the acceleration stops. And what I think a lot of people hear is people have stopped

00:25:19   buying iPhones and sales are down. And my argument would be that iPhone sales aren't

00:25:26   really gonna go down anytime soon. Next quarter, they're gonna be down year on year a little

00:25:29   bit but in the long run I don't think what we've seen is peak iPhone in the sense that

00:25:34   there's a peak and then it comes down the other side like with the iPod. I don't think

00:25:38   that's the case. I think the I wrote a piece about about this a little bit at iMore on

00:25:43   Friday called the persistence of iPhone and one of the subheads in there is what goes

00:25:48   up stays up. I don't think this is the dome kind of chart where you see the iPod goes

00:25:54   up and then it comes back down until it's gone. Because the iPod got replaced by smartphones.

00:26:00   But smartphone category is the special category. It is, we live in the smartphone era. I don't

00:26:05   see any product on the horizon that is going to replace the smartphone and I don't see

00:26:09   people stopping buying smartphones because they are a key part of life now. And, you

00:26:17   know, in fact, not to get all philosophical, but I'm at the point now where I'm starting

00:26:22   to think history is going to look back at the personal computer era as that archaic

00:26:28   time when we could build technology but it wasn't small enough to fit in our pocket.

00:26:35   The PC is just a precursor for the smartphone and that the smartphone is the thing that's

00:26:39   like, "Oh." Now maybe in 10 or 20 years there'll be a thing you put in your ear or on your

00:26:44   eyeball or whatever in your brain that will all be like, "Oh, well, the smartphone isn't

00:26:49   that silly because we had to hold a piece of glass and put it in our pocket, but those

00:26:54   are probably a ways off. So for the foreseeable future, smartphones are going to be huge,

00:27:00   and unless Apple blows it and hands the market to Android phones, which they've shown no

00:27:05   sign of doing, the places where Apple competes, Apple does very well, I think the iPhone is

00:27:10   going to continue to sell. And Apple will make the argument that the iPhone still has

00:27:16   room to grow because they see switchers from Android a lot, and they have markets that

00:27:21   they're not very strong in. And although that's a little counterintuitive to point at some

00:27:25   place like India and say, "India is a great growth opportunity for Apple," when you have

00:27:29   very little presence in a market, there's a lot of growth opportunity because you are

00:27:34   doing nothing there. And if you can find a way to do something there, it's pretty much

00:27:38   all going to be growth because you're starting from zero or close to zero. So Apple's argument

00:27:44   is there's still room for growth. I think Apple would not even try to argue that there's

00:27:48   still room for, you know, 100% growth year over year because, first off, they're too

00:27:55   big. Like you said, everybody's got one. We seem to have left the people are still—people

00:28:03   don't have smartphones and are now adding smartphones. That era in most places, especially

00:28:09   in the richer, more industrialized countries seems to have passed. And so it's a different

00:28:15   phase. And if you're a Wall Street investor looking for massive growth, the iPhone is

00:28:19   not going to give it to you, I think, anymore. It'll still give you growth and Apple will

00:28:23   still have growth in other places. And Apple, actually, they spent a lot of time talking

00:28:26   about, which we can talk about, little things in other places that can provide growth. But

00:28:32   as the main iPhone, I think it's going to be an annuity, you know, where it's going

00:28:37   to be throwing off $40 billion a year to Apple for many, many years to come, and that's

00:28:46   an enormous amount of money. But is it going to suddenly next year throw off $60 or $70

00:28:52   billion? Probably not. You know, probably it'll be $39 billion and then $40 billion

00:28:58   and then $41 billion, and it's slow growth. And that's just how it is, because like

00:29:04   Like you said, everybody's got one, so we're no longer in that phase where, you know, ten

00:29:09   people stand in a room and only one has a smartphone.

00:29:11   Now we're at the place where ten people stand in a room and all ten have a smartphone, and

00:29:15   one of them may have a second smartphone in their back pocket.

00:29:18   Yeah, I think we've seen, I mean, looking at the charts, I think we've seen the end

00:29:22   of where there are ten million more iPhones sold every quarter on quarter.

00:29:28   I think we may be at the end of that period of time.

00:29:31   But the idea of the news stories that I've seen, for some reason the BBC really have

00:29:37   it out for Apple right now and have been publishing story after story about the fact that the

00:29:43   company's about to fail because of this.

00:29:45   I'm seeing a lot of this stuff around the internet and it's a very peculiar thing.

00:29:48   And I wonder why people write it because I think anybody who understands technology,

00:29:53   which you have to to get a job at these publications, surely understands that if they continue to

00:29:59   sell even 60 or 50 million of these every quarter. They're around for a very long time.

00:30:05   And plus Apple have an ungodly amount of money in the bank. What are they up to now?

00:30:10   >> I have actually lost count. I need to look it up. It's an enormous amount of cash in

00:30:16   the bank and in short-term annuities and things like that. I think, look, Apple doesn't need

00:30:22   defending. It's a big company. It's one of the biggest companies in the world. It had

00:30:27   the most successful quarter of any company ever, potentially, this last quarter. But

00:30:33   I will say this, there are people who've never understood Apple, who don't like Apple, and

00:30:39   the moment that there's perceived weakness, they will get the knives out. That's just

00:30:42   how it is. That's just how it is. And people in the technology industry and, well, first

00:30:47   off, in journalism, and I will say this, Myke, you mentioned, I mean, at BBC, you don't think

00:30:51   about it so much, but in British journalism, especially, if there's anybody successful

00:30:56   who shows a sign of weakness, the knives come out. That's like, British journalism especially

00:31:01   loves destroying anybody who is perceived as riding high. And journalism in general

00:31:06   kind of does that, but especially in the UK. We love tragedy. Yeah, and also taking people

00:31:12   down, right? Taking, "Oh, you think you're so great. You're not. We're going to take

00:31:15   you down." So there's that. And then in technology too, there's a lot of people who just have

00:31:19   never liked Apple, whether they never liked their products. They're always the people

00:31:25   who feel like Apple's—who never got it, right? They feel like Apple's products are

00:31:28   too expensive and they aren't any better than the competition. And you know, what can

00:31:32   you say to people like that? Anybody who is listening to this show probably has had that

00:31:36   experience with at least one, if not many, Apple products where they've said, "This

00:31:39   is way better than the competition and that's why I buy Apple products." But some people

00:31:43   don't feel that way. Some people look at an Android phone or an Android tablet or a

00:31:46   PC running Windows and say, "It's fine. It's the same." And for those people, Apple's

00:31:52   makes no sense and is frustrating and has to be explained by everybody who does see

00:32:00   value in Apple products being dumb or confused or tricked. And for people with that worldview,

00:32:06   any sign of weakness for Apple is an opportunity to get the knives out. So that's what we're

00:32:11   seeing. And it's ignorance because the fact is, yes, if Apple stops selling products today,

00:32:15   it could continue spending money at its current rate for, I forget what it would be now, but

00:32:19   last time I checked it was like 10 or 20 years. So Apple's not going away. In fact, Apple

00:32:25   has one of the most profitable, successful products in the world right now, and it will

00:32:30   continue to be so. I think the real questions are what happens with growth? Where do they

00:32:36   get growth? And the answer there is, you know, they talked about services. I would argue

00:32:41   something like the Apple Watch and other things like that that are about selling more products

00:32:46   to existing customers in the ecosystem is part of it. And then when they talk about

00:32:52   VR, when they talk about a car, that's Apple using its huge amount of cash and its knowledge

00:32:58   of manufacturing and software and all these other bits of expertise they've got to kind

00:33:02   of poke around and find other categories where they think they might be able to do something.

00:33:07   And if any of those hits, there's your growth. The growth's coming from the car.

00:33:10   Gregor: To find the next iPhone, right? That's what it's all about.

00:33:12   David: I don't think there's ever going to be a next iPhone or at least not for...

00:33:15   Maybe Apple will be involved in the next iPhone in 10 or 20 years, the next smartphone, right?

00:33:19   But I think even something like a car, unless Apple comes in and takes 20% of the car industry

00:33:24   market, which is unlikely.

00:33:27   Huh.

00:33:28   These guys aren't just going to walk in here and make a car, are they?

00:33:31   Yeah, well, I mean, at this point, Apple, I feel like Apple could just buy a car maker

00:33:35   if they really wanted to, but they don't want to.

00:33:37   That's the thing, is that there's no point.

00:33:39   So I don't know, but that's what they're doing when they're doing all this R&D, is that's

00:33:42   where they're looking for growth, and that's where they're looking for the future. Because

00:33:45   what they don't want to have happen is the next smartphone to happen and then be flat-footed

00:33:50   and miss it, and that's the end, right? They don't want that. And they don't have to—I

00:33:55   mean, that's why they've got, you know, people can say—and I've heard some people

00:33:59   say that Apple should stick to its knitting and focus, not get distracted by these other

00:34:05   things. But if you're Tim Cook and the board, you do need to be looking for growth. That

00:34:11   sort of how public companies work. And so they are doing that. And then in the meantime,

00:34:18   they're taking some percentage of their cash, and they're doing dividends, and they're doing

00:34:22   stock buybacks. So they're basically kind of rewarding their investors. And I think that's

00:34:28   a smart move for them too, just to, you know, a little bit of the financial thing. Because,

00:34:33   you know, they are a public company, they have investors, the investors want growth.

00:34:36   And I think that's what the car and the VR and whatever else might be going on. We haven't

00:34:41   even talked about Tim Cook's little coy VR mention, but…

00:34:45   Yeah, that was like when he spoke about the watch, right, like a watch. Remember the D

00:34:51   conference where he was talking about watches?

00:34:53   Yeah, that the wrist is an area of interest.

00:34:56   Yeah.

00:34:57   Yeah.

00:34:58   So's your eyes.

00:34:59   Yeah.

00:35:00   Just one last note…

00:35:01   That sounds like an insult.

00:35:02   So's your eyes.

00:35:03   A British insult.

00:35:04   Yeah, hand to your face. Just one last note on Wall Street and that kind of world. I think

00:35:10   I think at this point it's kind of fruitless to get annoyed.

00:35:15   Every time the stock goes down, we all get annoyed.

00:35:18   Like, "You're so stupid, you know, still making so much money."

00:35:21   The system works as it works, right?

00:35:23   And the system looks for growth.

00:35:25   Because you want to invest in things that are going to make you more money.

00:35:29   If growth is slowing down, in theory the stock should fall in line with that.

00:35:34   Because all you're doing is putting money in to receive the same money if the company's

00:35:39   not growing, right? At a very basic level, it does make sense.

00:35:46   Also—and this is the thing that I've tried to explain—even some very smart people who

00:35:51   I know and like and I've seen on Twitter complain about this over the years, I try

00:35:55   to explain it to them too. It's like, expectation is built into the stock price. That's the

00:36:02   other thing about it. And somebody I heard describe this—maybe it was on ATP last week—I

00:36:09   about how expectation is built in and investing is gambling, right? It's speculation. It is

00:36:18   literally speculation. It is somebody saying, "I think this is going to be worth more."

00:36:26   That's what it is. And so as a result, when like Apple has a record quarter, let's say,

00:36:34   not with this quarter where there's the issue of the future, but like a couple of years

00:36:37   ago and they would release record results and the price would go down, the stock price,

00:36:42   and people would complain. The reason it went down is because everybody who believed Apple

00:36:47   was going to do great had already bought in and believed it actually a little bit greater

00:36:52   than it did. And so once the truth came out, everybody recalibrated and the stock went

00:36:58   down. I mean, that is a simplification of it, but it's something that doesn't make

00:37:02   sense if you're not thinking in those terms. It's a very different kind of way of thinking

00:37:06   of it. So you think, "Hey, this did great. The stock should go up." And the answer is

00:37:11   it already went up because people assumed it was going to do great or predicted it was

00:37:15   going to do great. And now it's going down because some other people are predicting that

00:37:19   it will do less great or it's not as great as they thought. And it's counterintuitive

00:37:24   if you're just a regular person to think, you know, shouldn't the more money you make,

00:37:28   the higher your stock price be. And it kind of doesn't work like that, which is weird.

00:37:32   And Apple stock is not always, given its ratio and all sorts of other like financial things,

00:37:38   an argument can be made that Apple stock has often been underpriced and that the people

00:37:44   who invest in Apple often don't really understand how its business works because they try to

00:37:49   find analogs in other companies and I'm not sure there's a good one. So we could

00:37:55   argue that Apple stock price movements are sometimes illogical, but the, you know, the

00:38:00   frustration people feel about the stock price or about analysts beating on Apple because

00:38:03   they're afraid of a loss of growth, I think is mostly because it's just a cultural disconnect.

00:38:09   Like the way that investors view the world is not the way that we do. Forgive me if I've

00:38:14   told this story before, but the CEO of IDG once in a meeting we were in, we talked about

00:38:19   how we were a profitable company. This was years ago, this was many years ago. We were

00:38:25   a profitable company, we had profit margins of, you know, I forget what it was, you know,

00:38:30   5% profit margins or something like that. And basically what they said is, "Your profit

00:38:35   margins need to be greater. You need to make more money." And as an editor, I thought,

00:38:39   "Well, wait a second. We're making money. Isn't that the point of a business is to

00:38:42   make money?" And what he said to me was, "I could take the money that I'm investing

00:38:46   in you guys right now and put it in the bank and make more money. And certainly I could

00:38:51   put it in the stock market and make more money. And that was the moment where I realized,

00:38:56   ah, we are a financial instrument for our investors, right? They're not here to build

00:39:02   a sustainable business that throws off profits. They're here to put money in and get a return

00:39:08   on their investment greater than they could get somewhere else. And a little return is

00:39:12   not good enough for them because they can get more elsewhere. Why are they investing

00:39:16   in us? And that is the cultural disconnect. And that's just the way the world works.

00:39:20   you said, it's just the way it is. And the sooner you understand it, the sooner you can

00:39:26   get over the frustration about it and move on to something else. At some point I finally

00:39:30   just got over it. It's like, "Look, the stock's going to do what it's going to do. I'm glad

00:39:33   I don't write about stocks for a living."

00:39:35   All right, iPad. So last week in our Ask Upgrade segment, we kind of got into talking about

00:39:41   this and saying what we thought could happen with the iPad. And I think that one point

00:39:48   that I made was that if iPad sales aren't up, it's dead. It's effectively what I said.

00:39:54   And one of my sightings for this was the iPad Pro.

00:39:59   You were bullish.

00:40:00   And I know that a lot of people, I was very bullish. A lot of people have said this, that

00:40:05   the iPad Pro was too late in the quarter. I think that that's just like a scapegoat

00:40:10   response for the fact that the iPad is down because not only is it down, it is 25% down

00:40:17   year on year.

00:40:18   which is really, really bad. And for me, the idea of the iPad Pro was too late or they

00:40:25   didn't have the iPad Air, I just don't think that they're compelling enough reasons to

00:40:30   tell me that it would have been 26% up. I just don't think that shaving a quarter off

00:40:40   year over year would have been saved by those two products when it was on a downward trajectory

00:40:43   anyway.

00:40:45   I see what you're saying. And I know that you're skeptical of this, but it is still

00:40:53   throwing off $20 billion a year so far, although at this rate, it will be less as it goes.

00:41:00   And I think the question is, we're looking at it losing because there was this initial

00:41:06   run-up of enthusiasm about it. Instead of a slow build, there was a spike and then a

00:41:12   drop off. So I think the question is wherever it finds it, if it finds it at all, or if

00:41:20   iPad sales just continue to crumble and nobody buys iPads because it turns out nobody likes

00:41:23   them. According to Apple, people who have iPads use them and like them, and that's

00:41:28   not the issue here. So I would say I think some of it gets lost in the initial enthusiasm

00:41:35   for the iPad, that the sales were big and now they're still coming down, and that

00:41:39   at some point I do actually think they will stabilize but it's going to be at a level

00:41:44   that is not at all what we thought this this business was going to be for Apple and in

00:41:48   general and and I think that it's easy to get frustrated because everybody thought this

00:41:55   was a 40 billion dollar a year business and maybe it's a 10 billion dollar a year business

00:42:00   which is good but it's not what anybody thought about it so I just I just wanted to say that

00:42:06   that I think—I don't think this is a case, talking to people, hearing what Apple says

00:42:11   about this—I don't think this is a case where people are turned off of the iPad. I

00:42:15   think it's a case where we got a lot—nobody had an iPad and a whole lot of people bought

00:42:20   an iPad, and now we're at the point where some percentage of them are going to keep

00:42:25   buying iPads, but we're just not there yet. So rather than—this would be a very different

00:42:29   story if it just took—as I think we all thought in 2010 when it got announced—that

00:42:33   just took five years for people to understand what the iPad was for. Instead, everybody

00:42:38   was like, "All right, let's go buy one." And now the numbers are coming down because

00:42:43   that was not realistic, that people are not going to buy iPads at that level. But I don't

00:42:48   think it's going to just go down to nothing. I think it is going to find a level and then

00:42:51   probably grow from there. But boy, you know, we keep drawing a line and you said this,

00:42:58   we keep drawing a line and saying, "This is the level," and then waiting a quarter

00:43:01   and going, "Well, maybe this is the level." And the level keeps dropping. There's no

00:43:06   doubt about it. The level keeps dropping.

00:43:09   So I want to—I have a lot about—I have a lot of thoughts about this, and I need to

00:43:14   preface all of this by saying this is coming from a person who now, in 2016, their favorite

00:43:21   way of doing any kind of computing is from an iPad. You know, I want to do all of the

00:43:25   work from an iPad.

00:43:26   You're not a hater.

00:43:27   I am a lover of the iPad in a big way.

00:43:31   So you mentioned about the $20 billion a year business, right?

00:43:35   The $20 billion a year business thing is something I see quite a lot.

00:43:42   And also what follows that usually is this is bigger than so many companies, the iPad

00:43:46   would be in the Fortune 500 on its own.

00:43:49   I understand all of that.

00:43:51   But the next part of that story that never follows is if this was a company that made

00:43:57   tablets. A fortune 500 company that's tablet incorporated. Tablet incorporated

00:44:02   and every year they drop by a quarter we would be saying that they were dead and

00:44:07   spiraling the drain. Whatever it is 10 8 10 straight quarters of year-over-year

00:44:12   sales drops yeah. We would be saying this company is dying. That CEO would have

00:44:18   been replaced by the board right yeah of tablet incorporated. This is the thing

00:44:22   right so when you look at it inside of Apple you don't say that because the

00:44:26   the company's fine, it's just this one product.

00:44:28   But it annoys me when people say,

00:44:30   you shouldn't say these things about the iPad failing

00:44:33   because it would be its own business.

00:44:35   Because if it was its own business,

00:44:36   that business wouldn't be around anymore

00:44:38   because its stock would be worth nothing.

00:44:41   Just nothing, right?

00:44:42   Because Apple's is dropping because they are not gonna have

00:44:47   another $70 billion quarter or whatever,

00:44:49   you know, whatever the thing is in the next one,

00:44:53   but it's still gonna be tens of billions.

00:44:54   but this line is down a 25%.

00:44:58   It falls and falls and falls.

00:45:00   And then the other one is like the refresh cycle thing.

00:45:03   That's the other thing that we all fall on, right?

00:45:05   Like the refresh cycle's longer, that kind of thing.

00:45:08   And we don't know the line yet, as you said.

00:45:10   I think all of these are optimistic views.

00:45:13   Like what if it's not about the refresh cycle at all?

00:45:15   It's just that people buy them once

00:45:18   and then decide they don't want them.

00:45:19   - I think that is valid.

00:45:23   I think that given, I'm sort of, I'm willing to take Apple at its word to a certain degree

00:45:33   that their analysis of this suggests that people love their iPads.

00:45:39   Oh yeah, I agree with that.

00:45:40   And that people use them and are satisfied with them.

00:45:43   And so, but this is the question, right, is what percentage of the iPad user base is an

00:45:51   active engaged iPad user who will buy a new iPad at some point and what percentage.

00:45:56   Is doesn't really need it.

00:45:59   Do you know they, they, they thought they wanted it, but they don't really want it.

00:46:02   And that I think that's the open question.

00:46:05   I, I, I, we don't know.

00:46:08   I believe that there is a level that the iPad will reach that is it's sort of

00:46:13   replacement level and, and that's when it kind of hits the bottom.

00:46:17   And then from there, I think it will actually grow slowly.

00:46:21   but where that is I don't know I mean and I think that's the the the skeptic

00:46:29   would say exactly what you said which is you know well what if it's not what if

00:46:35   this is a product that people have rejected maybe maybe I think certainly

00:46:39   some percentage of them have rejected I don't buy the argument that the that you

00:46:43   know ninety percent of iPad buyers love it and they're all going to buy a new

00:46:46   iPad at some point but it's gonna be stretched out over the next five years I

00:46:50   I don't think that's true.

00:46:51   There's a percentage of people who are like,

00:46:52   "Yeah, I can just use my smartphone or my laptop is fine."

00:46:55   Or, "I don't love the iPad enough

00:46:57   "to spend another $500 on a new iPad."

00:47:00   I do think that there is a certain percentage

00:47:02   that will go away.

00:47:02   And that's the problem with that big sales spike

00:47:05   the first couple of years of the iPad

00:47:06   is we kinda don't know.

00:47:08   This isn't a slow build.

00:47:11   It's a lot harder to guess where the free fall stops.

00:47:14   - 'Cause nothing happened either, right?

00:47:16   Like it was going up, up, up, up, up,

00:47:18   then just started to go down.

00:47:20   And, but there was nothing that happened, right?

00:47:22   In that period of time, which would suggest why.

00:47:26   It just did. - I mean, the iPad Air

00:47:28   came out and maybe, yeah.

00:47:32   I mean, there's nothing that you could point at and say,

00:47:35   "Aha, that's the moment that the iPad lost its thing."

00:47:39   - That was when they screwed up the iPad, right?

00:47:41   'Cause there was never a thing.

00:47:42   Like, it's the product has had the same iteration

00:47:45   as the iPhone, right?

00:47:46   - Although, I would make the argument

00:47:48   that what screwed up the iPad to a certain degree

00:47:51   is that initial success was so great

00:47:53   that it gave Apple no reason to really invest,

00:47:57   and we've talked about this in previous shows,

00:47:59   really invest in ways of differentiating the iPad.

00:48:01   And I think it's funny listening to Marco,

00:48:05   especially on ATP the last few weeks

00:48:07   and the last few months talking about threats for Apple,

00:48:11   the one that I keep coming back to,

00:48:12   and I think the iPad is a great example,

00:48:14   which is when everything's going great,

00:48:16   Apple has no reason to try to fix something if Apple thinks that what they're doing is

00:48:22   great. And you know, the corporate culture is supposed to be replace your great thing

00:48:27   with an even greater thing and just don't rest and nothing's ever good enough. But I

00:48:32   think the iPad is a great example, and the App Store is another good example of this,

00:48:36   right? Of Apple saying, "Hey, it's totally great," and believing their own PR a little

00:48:41   too much. And with the iPad, like the initial numbers were so great, why do we need to invest

00:48:45   in making the iPad have features that the iPhone doesn't. The iPhone is much bigger

00:48:49   than the iPad. The iPad's doing fine. We're just not going to bother." And it took them,

00:48:53   what, four or five years before they were like, "Oh, this is a problem. Maybe we shouldn't

00:48:57   invest more in software features for the iPad and hardware features for the iPad." It took

00:49:02   them too long. And I think that's that. So how did they screw up the iPad? In some ways,

00:49:07   I think it did so well so soon, more success than any of us really thought it would have,

00:49:13   it took the pressure off.

00:49:19   I struggle with all of this. I do. I just don't know if there are any things like that

00:49:26   where it's like, "Oh, software will fix it." Because the software has made it a lot better,

00:49:29   but I just don't see at this point that there is a magical fix to get it back up to 25 million

00:49:37   a quarter or something like that anymore.

00:49:38   Definitely not. I think 25 million, you know, that's when you talk about like five years

00:49:44   from now maybe they get back up there.

00:49:45   Yeah, I really think that what we're looking at and where we'll end up being is that it's

00:49:51   going to keep going down for another couple of years and then they'll settle into like

00:49:55   10 million a quarter, you know, as the high and then it will maybe start to creep back

00:50:00   up again. I mean, I look at the Mac charts and that's what I think this is going to be.

00:50:05   Yeah, this is the initial spike of people who are unlike most tech products that take

00:50:09   time to build. This was an initial enthusiasm because of the iPhone, really. People were

00:50:15   like, "Yeah, iPad. It's like the iPhone. It's the next big thing." There's that spike of

00:50:19   enthusiasm that kind of makes it confusing and messes up all your graphs, but that at

00:50:23   some point it will just settle. And it's all a matter of taking—if we were investors

00:50:28   in fictional tablet corporation, it would all be taking bets about where we think that

00:50:33   line is going to go and you know what what is the level and what is the profit

00:50:37   of that product line. This is hard for me too because like you the iPad is used

00:50:43   constantly in in my house. I have the iPad Pro now and I use it all the time

00:50:48   and my wife has an iPad Air 2 and she uses it all the time and my son has my

00:50:53   old iPad Mini 2 and uses it all the time. So three of the four people in our

00:51:01   house are avid iPad users. And you know, when my wife goes on the laptop, it is, I noticed,

00:51:09   like it is rare. She does certain kinds of things on the laptop, but most of the time

00:51:14   she's just got the iPad. And, and you know, I am very rarely bring the laptop out of the

00:51:18   office here. I generally am using the iPad. So for me, it's hard because I can see the

00:51:24   use cases and why this is a great product. And so what I have to try to do is imagine

00:51:29   that for a lot of people, they don't need that third product, right? They need to have

00:51:34   a laptop because of work or whatever, and that's not going away as fast as maybe people

00:51:39   thought. And everybody needs to have their smartphone. And so, you know, you've got an

00:51:44   iPad and your kids use it to watch videos, and as John Syracuse said the other week on

00:51:50   ATP, for a lot of uses of the iPad, you could just buy one of those $50 Amazon tablets and

00:51:57   would be fine because all it's doing is playing video. So being the lord of the premium tablet

00:52:02   market, how big is that market? And we just don't know, but it's hard for me to see it because

00:52:08   we use them and we love them. So I firmly believe this is a good product that has a market, but yeah,

00:52:15   what's that market? We're still drawing those lines and hoping, you know, maybe this is the

00:52:19   bottom. And you've gone from being sunny to being so dark, but I'd say I think it's worth

00:52:25   asking yourself, at what point do you say, you know, "I can't just keep drawing the

00:52:31   line and saying 'this time for sure'. Maybe it's time for us to just expect that it's

00:52:36   got a long ways to go before it hits bottom."

00:52:38   Yeah, I mean, I look at the iPad now and I'm like, "I see this is the future of computing,

00:52:46   but not like this." The Apple iPad, as it is today, whatever this device is, whatever

00:52:53   it will be for the next couple of years is not the thing, but it's closer to whatever

00:52:59   the next personal computer revolution is than the Mac that I'm looking at right now. That

00:53:05   is closer to it, but it is not the thing.

00:53:08   Well, I occasionally have those moments where I think that, I mean, I think Apple's vision

00:53:14   is that it's sinking and, you know, all your data is kind of migrating from your phone

00:53:19   and that in the long run your tablet is kind of your more comfortable lean back screen

00:53:25   that you use when you're, you know, that gives you a view into the same stuff as your phone.

00:53:30   But you know, is that, I don't know, it's also, let's say Apple's trying everything,

00:53:36   right? Apple's got the iPad, they've also got the MacBook, which is what if we applied

00:53:40   that iPad technology to a more traditional laptop? How would people react to that? And

00:53:46   then they've got the iPhone. I think one of the advantages Apple has here is they don't

00:53:50   need to have—they're not tablet incorporated, right? They can have the tablet and they can

00:53:55   have the laptop and they can have the other laptop and they can have the phone large and

00:54:00   small and smaller. And part of that is that they have a varied product line and part of

00:54:06   that is they can find out what works and they can try stuff and see.

00:54:09   And it still makes enough money, right? Like even with it falling, it's still making enough

00:54:14   money, if the Mac at 5 million units a quarter is making enough money, the iPads are surely

00:54:19   making enough money, right? So you can keep going with it and keep trying to find it,

00:54:24   but I think we all just need to accept that this product is going to keep falling for

00:54:29   a way more, I think at least another year, it's going to keep dropping and then it will

00:54:35   stabilize. That's kind of the way that I look at it and you need to disassociate the product

00:54:42   itself I think because the iPad now is better than it's ever been. It's better than it was

00:54:47   in Q1 2014. It really is. And we just have to understand and hope that Apple's going

00:54:56   to continue to show the dedication to the platform that they showed of iOS 9 and that

00:55:02   they're going to keep developing and working on it and eventually I think that whatever

00:55:07   the next thing is that comes after the iPad, we'll learn a lot from the iPad and have a

00:55:13   much brighter success and a much brighter future than this product does. Because I really

00:55:18   think that now we're at a point where a lot of the excuses that we've been telling ourselves

00:55:23   since 2014 don't work anymore about why this product isn't working. Because it's just a

00:55:31   sort of state now where it just, none of those things make sense to me anymore I don't think.

00:55:36   Well my only question here is, although it was too late, is Apple now, you know, does

00:55:45   Apple now have an understanding that the iPad needs to be more than the iPhone? And will

00:55:51   they invest the effort in continuing that? And although I don't believe this, I have

00:55:59   heard from people, not—these aren't sources, just, you know, readers and listeners—speculating

00:56:04   about this thing that we've talked about where there's iOS and TVOS and watchOS, and so would

00:56:10   there not be macOS, right? Which I think is the way to go. I've had some people say, "Well,

00:56:17   maybe it should be PhoneOS and PadOS." And I think that's unlikely, because I think the

00:56:24   iPad is very clearly the same thing as the iPhone in many ways. And yet, you know, Apple

00:56:32   TV and the Apple Watch are basically running iOS, but they are no longer considered that.

00:56:37   And I have my moments where I think, at some point, would it be better for the iPad as

00:56:42   a product if it wasn't iOS anymore, and that they were able to diverge a little bit more?

00:56:50   Unfortunately, right now, I feel like the only reason that the iPad has the viability

00:56:56   that it does is because it is part of the same ecosystem as the iPhone. And so it benefits

00:57:02   like you're an app developer and you're developing iPhone apps and you're like, yeah, okay, I'll

00:57:07   do what's necessary to have it also run on the iPad. And so the iPad benefits from that.

00:57:12   I understand where you're coming from, but you know this, right? Like if you break the

00:57:18   iPad out, there are no apps. It goes the way a Windows phone.

00:57:23   That's exactly right.

00:57:24   Because it's hard enough, right, these days, for some developers, I think, to consider

00:57:29   the iPad.

00:57:30   Like, as we record today, the airmail for iPhone has come out, and that's all it's on.

00:57:37   And they're saying that they're considering iPad and working on iPad, but there is no

00:57:42   iPad app.

00:57:43   Right.

00:57:44   So I feel like the path forward for the iPad is basically what Apple is already doing.

00:57:48   And so that's the one I would say ray of hope here about this, is Apple seems to have figured

00:57:54   out now that the iPad needs to be more than the iPhone and it needs to do other things

00:57:58   that are fitting for the iPad as a product. And honestly, I don't feel as somebody who's

00:58:03   used the iPad since day one, there were many years where it felt like after the iPad launched,

00:58:09   pretty much the iPad was along for the ride with the iPhone. And it seems like they've

00:58:13   changed the philosophy in the last year or two to be like, all right, we're going to

00:58:19   take more care. And I think that's one way that you make the iPad a better product and

00:58:24   and have the potential for it to turn into a more viable thing that's like that next

00:58:30   thing that you're talking about, rather than having to completely revisit the product,

00:58:35   would be if Apple spends five years where every iOS update has major improvements for

00:58:41   the iPad, the iPad could get somewhere where people don't look at it and say, "Yeah,

00:58:47   I guess it's fine," and say, "Oh, I have to have one of those." But they're

00:58:53   late to the party because they haven't really done that until the last year or two.

00:58:58   Yeah.

00:58:59   WWDC, iOS 10, that holds a lot of answers for me as to where this thing could potentially

00:59:05   be going.

00:59:06   Right.

00:59:07   Because the other alternative is for them to look at iPad sales and say, "You know what?

00:59:09   It's not worth it to invest all of these engineering resources on the iPad."

00:59:14   And if they go back to the old way, which is, "Really, let's just focus on the iPhone

00:59:17   and the iPad will come along for the ride and it'll be whatever it'll be," that'll be your

00:59:21   signed that, you know, I think that Apple, even Apple has said, you know, it's not worth

00:59:27   the investment. And I hope that doesn't happen.

00:59:29   I remain confident because you could have made this assumption and that decision before

00:59:34   iOS 9 and the iPad Pro, but they went ahead and did them anyway. You know, you could have

00:59:39   looked at the sales numbers before either of those things went into development and

00:59:42   decided that it wasn't worth it. Yeah, no, and they rededicated themselves

00:59:46   to making it a great product, which, you know, we can argue about, did they, should they

00:59:49   have done that from the beginning, but there definitely seems to be within Apple now, based

00:59:54   on their output, a desire to make the iPad much more than it was. And they got a lot

01:00:00   of work left to do, but they seem to be moving on it, and that's great because that's

01:00:04   what they have to do.

01:00:06   It was hidden, you know. It was hidden before this, I think. You know, when they were just

01:00:10   having the iPad follow along with the iPhone, the iPad sales were not astronomical, but

01:00:15   they were going up. So why would you have done it any differently? And then it was too

01:00:19   I think.

01:00:20   Yeah.

01:00:22   Should we do some Ask Upgrade?

01:00:23   I think it's a great idea.

01:00:25   This week's episode of Upgrade and the Ask Upgrade segment is brought to you by our

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01:03:11   OK, so our first Ask Upgrade question this week comes from John. John would like to know,

01:03:19   do you think there will be an updated Apple TV if Apple do announce a streaming service

01:03:24   in September of this year that would be needed to take advantage of it?

01:03:28   I don't. I think we'll be living with the fourth gen Apple TV for a while.

01:03:33   Which is what you want, right? Because you don't want to have to buy new hardware. I

01:03:36   mean, and also the rumours around the release time was that this was the hardware that was

01:03:40   supposed to run that, but it just wasn't ready.

01:03:43   Yeah, the only caveat I'll say is I think at some point they will do a 4K-capable Apple

01:03:47   TV, and that might happen this fall, or it might be later, but I think at some point

01:03:52   they'll do it just because they have some competition that can do it, and there aren't

01:03:57   a lot of 4K video sources, or Ultra HD is really what it is. Joe Steele's in the chat

01:04:01   room, his head's gonna explode, but basically 2160 HD, double resolution, quad pixels, yeah,

01:04:10   yada yada. Netflix has content that does that. Amazon has content that does that. It would

01:04:17   be nice if, you know, Apple, one, had content that did that, and then two, also had a box

01:04:23   that was capable of playing that resolution. So that might happen, but I think otherwise

01:04:28   it will be the same hardware that we know now, and I don't expect anything big to change.

01:04:33   By the way, speaking of, I'm surprised there's still no Amazon app for the Apple TV. I'm

01:04:39   little surprised. Yeah. Jimmy would like to know, he's given us a link to a rumour, we

01:04:46   have a rumour here, this was on 9 to 5 Mac, this is not a German TM source. Do you think

01:04:54   that this rumour of the iPhone 7 Plus could potentially feature a dual camera system for

01:05:01   better photos with 2 to 3 times optical zoom and a bunch of other focusing features, do

01:05:07   Do you think that this could be a sign for the ability to record 3D video on the iPhone?

01:05:12   So let's take this into parts.

01:05:14   All right?

01:05:15   Yes.

01:05:16   The iPhone 7 Plus having two cameras for additional functionality and technology.

01:05:21   Yes.

01:05:22   Possible.

01:05:23   I think I will refer you to my previous statement about looking at what products, how could

01:05:29   products get better, right?

01:05:32   One that maybe at the top of the list.

01:05:33   Well, no, the top of the list, um, is it shouldn't break when you drop it and it

01:05:39   shouldn't break if you put it in water.

01:05:41   Uh, these are at the top of the list.

01:05:44   I would say being able to see it when you're outside clearly in bright light.

01:05:48   Is something that I'd put high on the list and having the camera be better,

01:05:53   having the camera continue to be better is a vitally important feature.

01:05:57   So using technology, especially since they don't want to get thicker with the

01:06:01   phone using technology to add sensors to increase the quality of the image so that it's more

01:06:07   like SLR quality? Absolutely possible. I think it's exciting. I think it's a great idea.

01:06:14   And I think they're going to have to do something like that because they aren't going to make

01:06:17   that camera bulge more or, you know, and they're probably not going to have something that

01:06:21   pops out of the back when you're taking a picture and then pops back in, right? Chances

01:06:25   are they're going to have to just find ways to improve image quality in that very thin

01:06:30   phone enclosure. So, it sounds like a good idea to me.

01:06:35   And this is also tied to the fact that Apple acquired a company called Lynx around a year

01:06:40   ago which does exactly this. They use multiple sensors to create fantastic looking photos.

01:06:46   I think this sounds credible. I don't know if it's the iPhone 7 but I think that this

01:06:50   is a potential place that it could go to. However, the 3D video thing, because there

01:06:55   is an LG phone, I believe, somewhere that has two cameras and it shoots 3D, right, because

01:07:02   it can do that, it makes sense, two lenses, 3D. You'd also need a 3D screen to play the

01:07:07   footage back on.

01:07:08   Yeah, and that kind of flopped. I, I, this is what I will say about 3D. I don't think

01:07:13   3D, but what if you had something like live photos that let you... think of the

01:07:24   the effect on the Apple TV icons where there are planes and so as you pan and

01:07:30   and slide them you see depth because it's moving between, you know, across.

01:07:36   That's what I would say is if you've got two cameras you could potentially do a

01:07:39   fun feature like Live Photos that lets you kind of change the plane of the

01:07:44   picture because you've got some depth information because you've taken

01:07:48   two pictures that are, you know, or taking two pictures that are several inches

01:07:52   apart, right? So that's what comes to mind for something like that is, is there a

01:07:57   fun feature there that lets you kind of set the depth of field or

01:08:04   kind of slide the picture back and forth a little bit and have it feel a little

01:08:08   like you're opening one eye and closing the other and going back and forth and making

01:08:12   it kind of like that. I don't know. But that was what occurred to me. Not 3D per se, but

01:08:17   being able to use those two separate images to do some sort of fun effect.

01:08:20   Well, there's that lightro, right? The guys who make that camera that you can change the

01:08:26   focus. I would love that. That would be awesome. That kind of technology.

01:08:32   And that's, I mean, I saw that there's some camera out there that Tiffany Arment sent

01:08:36   the link around that people are working on that's got like eight sensors on the back.

01:08:42   It looks like a phone. I think it's not a phone. I think it's a camera. But it looks

01:08:46   like a phone. And it's the same thing. One way you get interesting photo effects is not

01:08:51   by having a big lens and a big sensor, but a bunch of little lenses and sensors and then

01:08:55   software that stitches it all together. And that's a direction that Apple could go in

01:09:00   where they stick a bunch of sensors on the back of a camera or on the back of a phone.

01:09:05   And you know, you take pictures that way and just let the software deal with it.

01:09:10   It's made by a company called Light and it is the L16 and it has 16 camera lenses.

01:09:17   That's the one.

01:09:18   Yeah and it's mad to look at.

01:09:20   Like absolutely bonkers and The Verge had a good piece on it, it's how I remembered

01:09:24   it.

01:09:25   I'll put that in our show notes if people want to go and see it but that thing is bat

01:09:30   poop crazy.

01:09:31   Yeah.

01:09:32   Is that how I would describe that?

01:09:33   Carlos has written in, "Is there an easy way to shut down a Mac Plex server using just

01:09:38   an iOS device? I use an app called TeamViewer, but I would like an easier way." Jason, do

01:09:44   you have an answer for this question?

01:09:46   JASON: I don't. I just use teleporter screens from my iOS device and control the screen

01:09:56   of the Mac server. There may be some way to kick off a script that does something or other,

01:10:01   But I don't know it.

01:10:04   I do run Plex on my Mac mini server and it's great, but I'll either walk out here and just

01:10:10   turn on the screen or I'll use screens or I teleport and do screen sharing.

01:10:16   Screens from Adobe, yeah.

01:10:17   It's a VNC app, right?

01:10:19   Yeah, that's a good one.

01:10:21   That is a good suggestion because you can do whatever it is you need to do.

01:10:26   If anybody has another suggestion for Carlos, please let us know.

01:10:29   I'd want to mention, I'm becoming more and more interested in Plex, as a thing. That's

01:10:34   all I wanted to say. I'm just, I don't have anything set up, I don't have a system at

01:10:41   home that I would run it on very easily, but I'm becoming, actually I do have a Mac Mini

01:10:46   in the cupboard, anyway, I'm becoming more and more interested in doing this.

01:10:51   Yeah, it's, it's uh, I like having, I like having it.

01:10:56   I like the idea of sharing libraries perfectly legally of our home videos.

01:11:01   Yep. That sounds cool.

01:11:03   Well I recommend on the great podcast network, RelayFN, maybe you've heard of it,

01:11:08   episode 299 of Mac Power Users is all about Plex. So you should check that out.

01:11:12   There you go. I'll put that in.

01:11:15   How about that?

01:11:15   I have that one saved because I'm not ready, right? So it's sitting in overcast for the

01:11:22   day that I become ready to go ahead and dive into Plex.

01:11:25   Alright our next question this week comes from Jean Ray and Jean Ray would like to know

01:11:32   what is the allure of Sonos over a regular Airplay or Bluetooth speaker? We've been discussing

01:11:37   Sonos a lot on connected recently as both Steven and Federico the next week bought a

01:11:44   Sonos and I know that I believe that you have one Jason and I wanted to see from your perspective

01:11:50   why do you like Sonos maybe over using some other computing technologies?

01:11:55   So yeah, I'm trying it out. Sonos sent me a sample and I'm trying it out. I used and

01:12:01   still use in some rooms the Logitech SqueezeBox system, which is very similar to Sonos. Jean-Ré's

01:12:08   question, and I tried to answer it on Twitter and it's very hard to fit this into 140 characters,

01:12:13   and the question was also, I mean, it's not just what's the allure of Sonos, but it is

01:12:16   over a regular AirPlay or Bluetooth set of speakers. And my answer is I don't find AirPlay

01:12:22   or Bluetooth particularly reliable. I don't enjoy the pairing process. My phones come unpaired or

01:12:30   iPads come unpaired from these Bluetooth speakers and then I have to do re-pairing or and maybe

01:12:35   there's weird audio artifacts. I don't like having to plug in if you want to use an AUX port instead,

01:12:45   plug in your phone and then let it sit there. None of these have really thrilled me and what

01:12:50   what I like about Sonos and the SqueezeBox is I can be anywhere in the house, I can turn

01:12:56   on the music, I can press play on the box and it just picks up where it left off. So

01:13:03   all of these things are nice. It has access to my entire music library, it has access

01:13:09   to all of my streaming services, it's all in one place. The remote app on the device

01:13:14   access to all of those things in one place instead of switching around and it

01:13:20   does multi speaker syncing so that you can play the same music in out of

01:13:26   several different speakers and they all work together and suddenly your whole

01:13:29   house is filled with music so there are lots of reasons that I that I have it

01:13:32   but bottom line for me is I find the airplane bluetooth stuff super fiddly

01:13:35   and and again I've got speakers in my living room I've got a speaker in my

01:13:42   kitchen, I've got a speaker in the bathroom, they're all over the place.

01:13:47   And to have to keep switching among them and it just, and, and like with

01:13:54   Bluetooth, the idea of hooking a Bluetooth dongle or something up to my

01:13:57   stereo in order to get out of the good speakers in my living room, they make

01:14:01   those things they're not particularly reliable.

01:14:03   It's just, I, you know, if, if an, a set of AirPlay speakers or Bluetooth speakers

01:14:07   works for you, great, but I feel like once you've got multiple speakers in the

01:14:11   the house. I don't know, my experience with them has been poor and I've never liked them

01:14:16   and so I always preferred something that just has access to my own library on a server in

01:14:23   my case and all the streaming services that I subscribe to and I just don't have to worry

01:14:27   about it.

01:14:28   There you go. I have the allure of that as well but just right now I'm good, I'm good.

01:14:35   Just playing things on my devices over the loudspeaker on my iPad Pro while I'm walking

01:14:39   around the house.

01:14:40   >> Yeah, well there's that too. I mean Sonos has some problems. Sonos doesn't do podcasts

01:14:44   very well and that's actually why I still have the squeeze boxes in parts of my house

01:14:48   even though I'm trying out the Sonos stuff I can't, they don't just, they just don't

01:14:51   handle podcasts well. So hopefully they will get on that because that's a missed opportunity

01:14:55   for them. But I, you know, they sound good and they don't require my phone to be, I just,

01:15:03   I also don't, just don't like the idea like I'm using my phone, like I had this where

01:15:07   I was listening via Bluetooth to something and then I was typing an email and in the

01:15:10   middle of the podcaster music I'm hearing the clicky keyboard sound. I hate that's terrible.

01:15:17   It makes me uncomfortable that I'm trying to use my phone for one thing and then the

01:15:23   speaker elsewhere is slaved to it and if I make a wrong move the music goes away. And

01:15:29   I know that's kind of not rational because if I'm listening to music on my headphones

01:15:33   on my iPhone it's the same story but there's something about it and I just feel like Bluetooth

01:15:38   is so brittle and this is if Bluetooth works for you don't email me because I hear from

01:15:45   people like it's great I never have any problems like I hear you I have not had that experience

01:15:52   last question this week comes from Chris lately my computer has been acting possessed this

01:15:57   This has got me wondering, have you guys ever experienced anything paranormal? Jason?

01:16:05   Interesting question to end on, I think.

01:16:07   Well, last week it was, maybe all week before was about condiments. I'm trying to find a

01:16:12   fun question to end the episodes on.

01:16:14   Ah, that's nice. Well, I'm no fun.

01:16:18   I have never experienced anything paranormal.

01:16:20   Well, there's a good reason for that, Myke. Paranormal things are not real.

01:16:25   I was hoping. This was one of those risky questions in which you say to me, "Yes, there

01:16:32   is a ghost right here. His name is Fredrick." No, there are no ghosts. Ghosts don't exist.

01:16:35   No. That's why they're paranormal, is that nobody can prove them and they don't exist because they

01:16:44   are imaginary. And they're fun, but they're not real. If you'd like to find our show notes for

01:16:50   this week's episode head on over to relay.fm/upgrades/74 I was letting you take that bullet for me

01:16:56   in case you didn't realize. If you'd like to find Jason online you can go to sixcolors.com

01:17:03   the incomparable.com and @jasonel on Twitter J S N E double L I am @imike and I write occasionally

01:17:12   at mikehoswright.com. People who have like Bluetooth speakers and believe in ghosts really

01:17:17   hate me now. I'm sorry. Yeah, most definitely. Bluetooth ghosts. Do ghosts do Bluetooth?

01:17:22   You have slotted yourself into that little corner quite nicely. Yes, I'm definitively

01:17:26   anti-Bluetooth speakers and anti-ghost. I have yet to truly understand if people will

01:17:32   either hate me or not for my iPad comments, but remember everybody, I love the iPad. Thanks

01:17:38   again to Ministry of Supply and Squarespace, thank you for listening. We'll be back next

01:17:42   week for more upgrade. Until then, say goodbye to Jason Snow. I was a ghost all along!

01:17:48   Woooooo!

01:17:50   (upbeat music)

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