The Talk Show

87: ‘Free Alcoholic Beverages’, With Ben Thompson


00:00:00   so anyway did you have you ever noticed ben thompson joining me this week ended [TS]

00:00:04   up on a talk show evidence of some websites where it like the username [TS]

00:00:08   password don't get auto filled yeah I think usually the websites while they [TS]

00:00:14   mislabeled the field or something [TS]

00:00:15   yeah and it's not like that thing where we're certain financial sites have I can [TS]

00:00:20   opt-out thing it's like a site where there's nothing really super [TS]

00:00:24   confidential about it it should work just doesn't yeah well I am still [TS]

00:00:29   scarred from the whole like they've had autocomplete for just like addresses [TS]

00:00:33   like when you're buying something and I swear those never worked for like the [TS]

00:00:37   first three years and maybe they work today but I i will never know that [TS]

00:00:41   refused to use them are you don't use the autumn still have either every field [TS]

00:00:46   which then really do they even worse in noise when they have the field in the [TS]

00:00:49   wrong order in your tabs only landed on the bottom of aids the credit card thing [TS]

00:00:54   works perfectly for me i i came over the last time that the credit card auto [TS]

00:00:58   filled didn't work but the password thing drives me nuts and I sometimes I [TS]

00:01:04   think it's because it's like I've already saved a password for WWW dot [TS]

00:01:11   example.com but right now I'm on stored at example.com and so it doesn't see it [TS]

00:01:17   is the same website and doesn't fill attend I don't even know and other times [TS]

00:01:22   I think it's like you said that they don't have the password field correctly [TS]

00:01:26   labeled as a password [TS]

00:01:27   yeah I die I have used I mean I've used one password for a long time but the [TS]

00:01:33   funny the funny thing is actually rarely use it cause I have this you know this [TS]

00:01:38   super convoluted system for for passwords that involves like a a a seat [TS]

00:01:45   or random stirring shifting your fingers like to think they'll run the keyboard [TS]

00:01:50   explain in detail for Christmas I actually don't mind I feel pretty I mean [TS]

00:01:58   cynicism that accent I can say anything else does that lasted eighty pni Casey [TS]

00:02:04   soviet know that challenging challenging tech listeners to do anything is not a [TS]

00:02:10   good idea [TS]

00:02:12   but it is quite convoluted it takes it would take me like 10 minutes to explain [TS]

00:02:15   it which is what we decide that it's it's robust pretty good actually I i [TS]

00:02:22   switch to this win win the iPhone first came out [TS]

00:02:25   you couldn't use like one pass or anything like that I needed I wanted to [TS]

00:02:29   have complex passwords and different passwords every site but still be able [TS]

00:02:34   to somehow memorize them all and so it's been pretty good mostly thing is when [TS]

00:02:40   like a site has a breakdown or password is stolen it reset it like a backup [TS]

00:02:47   system for sites that have been problems once it gets it gets messy pretty [TS]

00:02:50   quickly gets me is that I'm more annoyed now when I run to his site then I was [TS]

00:02:59   back in the days when no passwords yeah because it wasn't an annoyance before [TS]

00:03:05   right I think it's probably like when they invented modern plumbing and people [TS]

00:03:11   who grew up always having to go to an outhouse every time they wanted to go [TS]

00:03:14   and then obviously in most places had indoor plumbing but every once in a [TS]

00:03:18   while you get to a place it was worse I'm sure that that was worse than when [TS]

00:03:23   they were child children and had to go anyhow everything everything is relative [TS]

00:03:28   right thank you once the bar is raised can never go back [TS]

00:03:33   yeah I think there's there's probably gonna make some sort of there's a funny [TS]

00:03:40   tweet on Twitter that about sums of make a podcast cut-up of everyone think I [TS]

00:03:44   swear and system City joke to be made there he said that I remember the last [TS]

00:03:49   time I saw the show there was a time you think you actually did get busted so you [TS]

00:03:55   think it was your it was here a precise date later gloria talk with other [TS]

00:04:00   podcast like yeah so actually I met the guy from broadcast it down the shit hit [TS]

00:04:07   the fan maybe that's funny because you don't seem to you seem like a profane [TS]

00:04:13   exact same thing you just talked about when there's one pastor that doesn't [TS]

00:04:19   work it stands out more [TS]

00:04:21   whereas you know there's just a whole string of expletives they can run into [TS]

00:04:25   each other at some point but just 11 finally place one really really jumps [TS]

00:04:31   out that the well-placed actually takes get site so I guess there's not much [TS]

00:04:44   going on except that we're in it seems like everybody has collectively sort of [TS]

00:04:49   finished digest in the BBC and Google yeah and a couple of good pieces this [TS]

00:05:03   week you had a good piece of me try this strategic every three seconds its arm [TS]

00:05:09   protector E does it stack up and I did switch it up so it's my fault and now no [TS]

00:05:15   one knows but you have a good piece on samsung said the other a little tidbit [TS]

00:05:22   and who knows you know 11 quarter is is a datapoint not necessarily a trend but [TS]

00:05:29   Samsung had a pretty bad quarter [TS]

00:05:33   either so it it was soft [TS]

00:05:36   i think is the word that they use this is this is not by any means out of the [TS]

00:05:42   blue let's talk about them first I think in broad strokes what it seems like [TS]

00:05:50   we're seeing is that Samsung had for a while [TS]

00:05:55   occupied a certain middle-ground floating you know making some money on a [TS]

00:06:01   lot of high quality of lower-end smartphones [TS]

00:06:06   and a decent sized chunk of higher-end smartphones but that there were seeing [TS]

00:06:14   signs that they're getting pinched on both sides that Apple still dominates [TS]

00:06:18   the high end and as you know has the throughout the whole euro smartphones in [TS]

00:06:22   terms of profit and revenue and on the low end they're running into various [TS]

00:06:32   competitors Ryan and China in particular with how do you how do you say it [TS]

00:06:37   Xiaomi Xiaomi how do you spell that [TS]

00:06:40   Xiao which is the the is actually a really Chinese character in it so use [TS]

00:06:48   pinyin to to write in English so but that actually works it works well and [TS]

00:06:56   it's it's it's a company that very interesting to me you know far more [TS]

00:07:01   about them than I do it's actually one of the main reasons [TS]

00:07:04   show this week and if I don't know a lot about him I can't help but think that [TS]

00:07:10   there's an awful lot of listeners of the show who don't and maybe even haven't [TS]

00:07:14   heard of them before but I think I think they should be on everybody's radar [TS]

00:07:20   especially when it comes to Samsung even though I think for the last year or so [TS]

00:07:24   there's been a lot of stuff in the press and in investor world that sort of has [TS]

00:07:30   them as somebody who Apple should be looking out for but I think I think it's [TS]

00:07:36   actually I think you've made this point pretty well that it seems well there any [TS]

00:07:40   I think the the number one thing about show me in particular is is you have to [TS]

00:07:45   really there is this breathless like feature in Bloomberg like shiny week you [TS]

00:07:53   know about this big this big thing like you have to clearly delineate between [TS]

00:07:58   China and the rest of the world and in china shop deserves all the hype like [TS]

00:08:06   they are they're killing it they are a Chinese company they are Chinese correct [TS]

00:08:11   the and and just in general and this goes for a lot of the chinese companies [TS]

00:08:16   in general like China really is its own [TS]

00:08:19   completely separate world we're very widdle applies to what happens the rest [TS]

00:08:25   of the world particularly the west and vice versa and a lot that's because of [TS]

00:08:29   the Great Firewall part of his because of you just cultural differences and [TS]

00:08:34   partly because it's such a huge market it's like i mean us' us' companies get [TS]

00:08:39   criticized for being you know to us' focus but why wouldn't they be it's you [TS]

00:08:43   know it's 300 million of the richest consumers in the world like it makes [TS]

00:08:47   sense to start out there [TS]

00:08:49   same thing for Chinese companies your city of a billion customers a very large [TS]

00:08:55   you know an absolute number of which are very rich and a good number which are [TS]

00:09:01   getting richer so why not focus there and and so that's just in time to watch [TS]

00:09:09   a movie about china is really important kind of like draw that too I think so [TS]

00:09:13   he's not much of a threat outside China but in China there are there big deal in [TS]

00:09:18   in in China threat to Apple as well and that's why if the distinction right and [TS]

00:09:24   China is big enough that even if they're a Chinese only company it's big enough [TS]

00:09:30   to matter to me I mean Apple china's gonna be Apple's biggest market in like [TS]

00:09:35   five years or something like so it it matters just to give you an idea of what [TS]

00:09:41   a massive market it is like in so it doesn't matter even if even if show me [TS]

00:09:46   only threaten Samsung in China are only through an apple in China because China [TS]

00:09:53   such a significant market for both companies that means the company's as a [TS]

00:09:57   whole are threatened [TS]

00:10:00   and part of it too is this is where being based on Android can work in their [TS]

00:10:09   favor is if they were running their own proprietary platform it might be a [TS]

00:10:14   problem that they were strongly in China right right like maybe sort of like what [TS]

00:10:20   what blackberry was like back when blackberry had a huge market share in [TS]

00:10:24   the us- and when was sort of non-existent elsewhere this is now is it [TS]

00:10:29   going back [TS]

00:10:30   free iPhone this is like early 2000 when blackberry was this abnormality it [TS]

00:10:35   worked for them because they didn't need software it wasn't really about apps yet [TS]

00:10:39   it was just about communicating and the people in the USA had BlackBerrys were [TS]

00:10:43   for the most part communicating with other people have blackberry so it was [TS]

00:10:46   ok whereas now where you need an app ecosystem right you know [TS]

00:10:53   Xiaomi can can capitalize on that even if they're only really strong in China [TS]

00:10:58   because Android is Android will ever actually funny because that's the other [TS]

00:11:04   part where China is just a different world right we like I as a rule I think [TS]

00:11:09   we talked about this this last time is you know you you have to be one of the [TS]

00:11:15   two you if you wanted to buy in China that's the big exception right because [TS]

00:11:25   most of phones in China are on ASPD the open-source Android and there's a whole [TS]

00:11:31   plethora of services that filled in there like there's UCWeb which is the [TS]

00:11:35   biggest browser just bought by Alibaba there is a whole bunch of apps stores a [TS]

00:11:40   few which they like there's been some competitions are emerging as the key [TS]

00:11:44   ones and so there's almost like there is a whole separate legal system of [TS]

00:11:48   services that most of the phones their use and it actually in in in China [TS]

00:11:54   Chinese developers are used to this writer is actually services that help [TS]

00:11:57   you get your app on all the different stores you can be everywhere and it's [TS]

00:12:01   funny like if that if that sort of whole ecosystem were in the west that would it [TS]

00:12:08   would actually totally transformed the market here because it would really weak [TS]

00:12:12   and the the kind of the importance that the Play Store does have in kind of [TS]

00:12:18   making giving Google full control of that if that makes sense so it's i mean [TS]

00:12:24   everything there is this really is really so different and there's lots of [TS]

00:12:28   things that are interesting for for Western companies I mean schools and [TS]

00:12:31   really not important at Alder they're not important because they're blocked as [TS]

00:12:35   for search but they're also not important because they don't really [TS]

00:12:37   control and right there and the only western company actually that really [TS]

00:12:42   matters is apple and that's because they sell hardware so do you think that's [TS]

00:12:47   already having an effect on Samsung's numbers over yet what do you think it's [TS]

00:12:52   more it's already partly China but is it is it only china is it is a worldwide I [TS]

00:12:58   think I think for sure so wud u looted before I think Samsung has as a [TS]

00:13:04   prominent both ends on the high end they I think they they they got a lot of [TS]

00:13:13   high-end customers I think for two specific reasons again this was more [TS]

00:13:18   conjecture previously been now that is actually happening I think we can see a [TS]

00:13:21   lot more certainty someone was the iPhone has always been relatively [TS]

00:13:27   limited comes to carrier distribution you know they were they were stuck at [TS]

00:13:31   like two hundred and twenty four like two or three years and even before then [TS]

00:13:35   there was even lower and and that left a good five hundred carriers around the [TS]

00:13:41   world where there was no iPhone and resuming her welcher carrier and in [TS]

00:13:46   richer countries people tend to be more loyal to their carriers in you wanted a [TS]

00:13:52   high-end phone whether there was no iPhone choice Samsung or HTC or whatever [TS]

00:13:57   those and Samsung has always been you know a very good competitor you know [TS]

00:14:03   whatever you think about their design is in his third they're very well-run [TS]

00:14:06   company they're very competitive they have great marketing they pull although [TS]

00:14:09   all the lovers and if there were no iPhone you know they they would continue [TS]

00:14:15   I think to do very well at the high end in a sec probably doing very well but [TS]

00:14:21   now the iPhone is really started to again [TS]

00:14:24   expand its carriers in part that is the big ones which interview DoCoMo in Japan [TS]

00:14:29   Japan and China Mobile and China but also lots of little ones like I'm here [TS]

00:14:33   in I'm back in the states I'm in Madison just for the summer and a big carriers [TS]

00:14:38   USS cellular right is the fifth largest in USA but still lots more the other [TS]

00:14:41   ones they've never had the iPhone now they do and there's lots of these little [TS]

00:14:45   ones that any one of them by themselves doesn't mean much but when you're adding [TS]

00:14:50   like 50 of them like Apple has that that just increases Samsung's competition [TS]

00:14:56   where Putin didn't have any competition there it's built filling out the long [TS]

00:15:00   tail of carriers right exactly exactly and Samsung his own net long tail exams [TS]

00:15:04   Samsung's big advantage still remains their their relation to carriers in all [TS]

00:15:12   their own mental connection they deliver exact with carries one what they need [TS]

00:15:16   and really they've kind of stepped into the Nokia role which that used to be [TS]

00:15:20   nokianokia had all those except for except for the US-north he had relations [TS]

00:15:25   with every carrier they they do everything they needed and that gave [TS]

00:15:30   them a that's really important in the mall business and Samsung has inherited [TS]

00:15:34   that they still have that advantage of me the iPhone so unique one can be [TS]

00:15:38   carriers and that sort of thing was it was the first phone that people were [TS]

00:15:43   people value the phone more than they value their relationship with their [TS]

00:15:46   carrier and that really upset the apple cart and it is less in Samsung's [TS]

00:15:52   advantage in the carriers were there compete directly with with the iPhone [TS]

00:15:57   yeah I think like go back you know free smartphone you know when you go in and [TS]

00:16:03   you know big ones I remember at least here in the states were always Nokia and [TS]

00:16:07   Ericsson and eventually Sony Ericsson but they were seemed to me like somebody [TS]

00:16:14   who never was really into cell phones before that I mean I'd have one just for [TS]

00:16:18   the sake of making calls and truly rudimentary texting but it just seemed [TS]

00:16:24   to mean that those were the two brands and you go in but it never really seemed [TS]

00:16:27   to matter too much you know is it was far far more about choosing between [TS]

00:16:32   you know Verizon and singular where or who ever you know whatever the names of [TS]

00:16:36   the various carriers were in the states that it was really mostly about which [TS]

00:16:40   carriers gonna go into yep and even even now I mean will be the iPhone so so [TS]

00:16:47   unique is the first phone that people really willing to switch carriers for [TS]

00:16:53   and that gave out below all the negotiating leverage with with carriers [TS]

00:16:58   from that from that point on [TS]

00:17:00   but even then there were there is still a woman's number of people who would do [TS]

00:17:05   that [TS]

00:17:06   like you know there were still people who were you stay with rising no matter [TS]

00:17:09   what and and so it's it's been that dynamic has has helped Samsung and [TS]

00:17:18   continues to help them but I as outbox bands that kinda again pics off you know [TS]

00:17:24   just a lot of these while the one tells aqueous yeah and you made the point that [TS]

00:17:29   one of the things to understand the dynamics of this is that for practical [TS]

00:17:34   purposes no it's not really a hundred percent of course nothing ever is but [TS]

00:17:37   practically speaking at best thing of it is everybody is going to own a [TS]

00:17:42   smartphone right which is there's there's very few things in the world [TS]

00:17:48   that are like that especially in tech a lot of the things that are like that are [TS]

00:17:53   things like I don't like washing machines are ya ya TV a TV is a good ago [TS]

00:18:01   TVs but this thing though TV's even will ultimately have less penetration than 10 [TS]

00:18:06   smartphone which is which is pretty amazing right because a lot of its gonna [TS]

00:18:10   end up I think maybe a little bit more towards one TV per household and one [TS]

00:18:15   cell phone per person [TS]

00:18:17   rain and even if you go to multiple tvs per household it still is probably going [TS]

00:18:23   to trend not towards one per person but but less than one per person maybe you [TS]

00:18:29   have one in the master bedroom [TS]

00:18:31   and one in living room but tablets are clearly eating into that you know where [TS]

00:18:35   a lot of you know personal consumption of video is clearly going towards [TS]

00:18:40   tablets and smartphones you know like like if you know the average number of [TS]

00:18:45   TVs in a house I'm sure has if anything it might be going down because if you [TS]

00:18:49   were going to have one like for your teenager teenager have a TV in their [TS]

00:18:53   room that might be a PC and a tablet now right you know PC for the games and [TS]

00:18:59   tablet for watching video and TV we're just to get around a little bit more on [TS]

00:19:06   one thing that's actually really interesting but the Samsung results I [TS]

00:19:09   will get back to the high low and stuff but is they talked about the fact that [TS]

00:19:14   they they felt their tablet sales have been hurt by their big phones their [TS]

00:19:18   phablets which which building on this point I think there is there like [TS]

00:19:24   injection think rightly so that a lot of tablets are used primarily for your TV [TS]

00:19:28   viewing basically but actually worldwide you know not the you s market where the [TS]

00:19:34   disproportionate share but if you look worldwide tablet and and so many people [TS]

00:19:39   had so many observations from CES this year that there are a lot of the no-name [TS]

00:19:44   brand Android tablets that clearly designed knowing that they're just gonna [TS]

00:19:50   be used for consuming video in in the thing about video video video and Asia [TS]

00:19:58   is is a lot different than here in that basically everything is available [TS]

00:20:05   very easily like I mean needs yes there's things like Hulu Netflix here [TS]

00:20:09   but there's always kind of a bit of a challenge of seeing like whatever is up [TS]

00:20:12   next [TS]

00:20:13   like whatever she hot show is going on right now they're mostly Korean shows [TS]

00:20:17   like these soap operas or like once it's aired it is available for streaming [TS]

00:20:24   within like an hour if if not faster and it says it's interesting because I don't [TS]

00:20:30   think it's actually there's not really cracked it's it's not really frowned [TS]

00:20:34   upon it's not really sees it as an issue is it legally it's it's not like you're [TS]

00:20:40   saying it's not legal but the [TS]

00:20:42   the IP infrastructure there is such that nobody really I'm not sure to be honest [TS]

00:20:48   I mean I it may be one of those things where it's not only legal black no one [TS]

00:20:53   actually no one really cares it is it is true that in many countries the IP [TS]

00:20:58   infrastructure is not there but also or maybe even the IP culture frankly yeah [TS]

00:21:04   that's a big part of it that's a big part of it as well i think is like just [TS]

00:21:09   in general there's a difference i mean it's very open right i mean even in [TS]

00:21:13   phnom in some of the more more you know [TS]

00:21:17   advances in the world by countries that have had a long history of IP [TS]

00:21:22   enforcement like Japan or Taiwan a little bit more so I mean all those out [TS]

00:21:30   there still you can still find comfort bags they're more like in the alleys [TS]

00:21:34   right it's not high street corner like like in some parts of Asia so it's a [TS]

00:21:38   little stronger but there's the other they're very publicly available and and [TS]

00:21:45   to watch them and to watch this show to watch TV like that is very common and I [TS]

00:21:51   i dont know all the countries in is obviously but in my experience your TV [TS]

00:21:55   is is just as much a thing there as it is here if not more so [TS]

00:22:00   and and so the whole idea of them being used primarily for that use rings very [TS]

00:22:07   very true to me while I and then you were saying that Samsung explicitly said [TS]

00:22:13   with regard to their poor results are disappointing results and it's not just [TS]

00:22:18   that they're down there were down was somewhere around 16% less profit than [TS]

00:22:23   than was expected right and that's the weird thing about reporting results [TS]

00:22:27   right it's all about expectations and they were they were under their [TS]

00:22:31   excitation Thunder analyst expectations and buy you a pretty significant amount [TS]

00:22:35   and so we can even even if we go with the hey come on and let's just make this [TS]

00:22:39   stuff up at least Samsung's own guidance you know should be a fair measure that [TS]

00:22:45   most companies you know usually put out guidance that they expect to at least be [TS]

00:22:48   able to me that I get so genuine [TS]

00:22:50   it one if it's just you know and Apple has run into this many times over the [TS]

00:22:55   years where where Apple will will post results that are pretty close to their [TS]

00:22:59   guidance maybe a little maybe a little down but generally pretty close but if [TS]

00:23:03   there's way less than what analysts had projected it's it's headlined as a big [TS]

00:23:10   mess yeah it's weird because they like the worst of the worst thing you can do [TS]

00:23:13   is miss your own guidance [TS]

00:23:15   gonna get hammered for that the second worst thing you can do is missing [TS]

00:23:21   analyst guidance but then there's also if your guidance is lower than what [TS]

00:23:26   analysts expect to be like him so that's that's when Apple takes hit after [TS]

00:23:30   earnings it's usually because their guidance for the following quarter is [TS]

00:23:35   lower than what analysts anticipate it would be where is everything that [TS]

00:23:39   happened the previous quarter like that's almost always beit din and never [TS]

00:23:43   missed like meeting for Wii U no recent history their recent results oh yes it's [TS]

00:23:51   all it's all its own expectations game I know people get frustrated Wall Street [TS]

00:23:57   but it's it's a lot more it's not as its not as ridiculous as people think I [TS]

00:24:01   think the main thing with wall street is wall street is it is a stock inherently [TS]

00:24:06   is all about the future it's all so whatever you've done the past it's only [TS]

00:24:10   useful in so much as it's an indicator for all happen going forward right it's [TS]

00:24:15   not a risk bringing apple into it is sort of it's an aside but I think it's [TS]

00:24:20   interesting because there has been a min this is not something that they actually [TS]

00:24:23   came out and said is that we're going to try to be a little bit more accurate [TS]

00:24:28   with our desirable that the couple of maybe it was a year or so maybe a little [TS]

00:24:32   bit more and that they said look we're going we used to you know give you a [TS]

00:24:37   lower end of our guidance which is translated means we really low ball the [TS]

00:24:42   numbers in always put out a number that we knew that we could be there for you [TS]

00:24:48   know anybody who is trying to accurately gauged you know what to expect from [TS]

00:24:52   Apple had to pick a number that was higher than that and so you had to [TS]

00:24:57   analysts had to pick a number that was different from Apple's always higher [TS]

00:25:03   because Apple you know what about its serious significantly low ball them I [TS]

00:25:09   think that the change you know and this is one of those it's something that [TS]

00:25:14   started in the post Steve Jobs era I think it's probably had the intended [TS]

00:25:20   effect in it seems as though Apple's guidance and Wall Street guidance have [TS]

00:25:25   become much more largely aligned and whether it's a little bit or a little [TS]

00:25:30   bit worse it seems like the stock has become a little bit less volatile just [TS]

00:25:37   when results are are issued no I that's a really good point I think you're [TS]

00:25:41   probably right that this is probably a quick thing you know jobs probably [TS]

00:25:45   enjoyed beating expectations you know but by a lot but the reality is that [TS]

00:25:50   actually introduced more uncertainty jobs as prospective was probably along [TS]

00:25:55   the lines of screw those guys screw job just like the surprise right we we did [TS]

00:26:02   murder results right it was another chance of the reveal where but I think [TS]

00:26:09   it was bad for Apple you're exactly right because analysts had to make had [TS]

00:26:13   to pick something up and what I just said about about the current results no [TS]

00:26:18   longer being interesting is because of this change is because they they are [TS]

00:26:21   almost exactly right every time and so now I was focused on there they're going [TS]

00:26:26   forward estimates and I think that I think wonder jobs with the lowball [TS]

00:26:31   numbers it was like screw up let them figure it out [TS]

00:26:34   whereas the cook idea is let's help these guys out because they're wrong [TS]

00:26:39   they're always wrong and hurt because you know we don't we keep somewhat close [TS]

00:26:44   to invest so let's yeah and them being wrong [TS]

00:26:47   hurts us so it's in our interests to help these guys and give them guidance [TS]

00:26:52   that actually is truly guidance yeah I mean this is another thing that just [TS]

00:26:57   really a test to kind of wait cooks how impressive cooks operation is is [TS]

00:27:04   how the way that our pool is so exact on their numbers every single time and that [TS]

00:27:10   that that goes back to the operation cited write operations is it's not [TS]

00:27:14   sexual making it the predicting its the modeling like knowing what we're gonna [TS]

00:27:19   sell of white and like Apple forty you ever since they did this change and I [TS]

00:27:26   think horse did you have a chart that show the comment [TS]

00:27:29   off they've been white has been in almost almost exactly I think a lot of [TS]

00:27:33   the optimism for Apple actually is because last quarter they actually did [TS]

00:27:37   beat themselves right in a way that they hadn't previously and so that so that [TS]

00:27:40   even Apple was surprised but I mean it's it's kind of uncanny how perfectly [TS]

00:27:47   almost feel like they can predict the future [TS]

00:27:49   yeah and sometimes I feel like it's because of changes that they couldn't [TS]

00:27:53   foresee like not necessarily demand but pricing of components or something like [TS]

00:27:57   that something may be dropped in you know dropped in price and and help [TS]

00:28:02   margins and you know they just couldn't foresee that you know right now I think [TS]

00:28:07   right now if if that's what happens it's usually what it is but I do think it was [TS]

00:28:11   last quarter like they genuinely beat their numbers and they're like yeah we [TS]

00:28:15   we we had a really good quarter and I think that's why I like right now there [TS]

00:28:21   is so much positive sentiment around apple i think is they've kind of the [TS]

00:28:26   challenge with you know I think Apple's actually mostly gotten past the the kind [TS]

00:28:31   of big number is not reading or prob like the problem where because they're [TS]

00:28:36   such a big company now like any percentage increases gonna be small [TS]

00:28:39   because the the denominator so huge right and conversely any small [TS]

00:28:45   percentage difference is actually going to be a large number of dollars right [TS]

00:28:50   right so Apple could miss by half a billion dollars and its wholly shit they [TS]

00:28:54   missed by half a billion dollars and it's you know it's a couple of course at [TS]

00:28:58   rape know exactly and that but I think like so 2012 I think late 2012 was like [TS]

00:29:04   with their their growth rate peaked right that ever since then they have [TS]

00:29:08   their growth has slowed considerably and I think like that really I think [TS]

00:29:13   justifiably like really depressed the stock for a for a few years now but [TS]

00:29:18   that's been work through the system and I guess is the lake with any company [TS]

00:29:21   that's like changing up like that's just shifting in a different phase there is [TS]

00:29:26   there is this part where it's like a lot of stock is isn't expected expectations [TS]

00:29:31   sort of thing like people understanding grappling with your business is your [TS]

00:29:34   business changes there's going to be upheaval and and I think in so you talk [TS]

00:29:39   about a company like Intel Microsoft that has to like that has to you know [TS]

00:29:43   make big changes once the once you get through those changes new kind of [TS]

00:29:48   shifted expectations and people are now used to something else than you actually [TS]

00:29:52   do get more breathing room and acts like Apple has kind of cross that that [TS]

00:29:56   counsel lot of ways people are cool with you know six percent growth 10% growth [TS]

00:30:01   and whereas before they were punished because they were no longer growing [TS]

00:30:05   middle 23% and I think that's that's just go back to like there's there's the [TS]

00:30:11   famous thing like in this what is it in the short term is a is a something [TS]

00:30:17   machine long-term a weighing machine that he liked over over time over a few [TS]

00:30:21   years why the stock market actually is very very rational and it does exactly [TS]

00:30:26   what you expected to and there's no point getting caught up on what happens [TS]

00:30:31   day-to-day record quarter because it usually doesn't work itself out in a way [TS]

00:30:35   that makes sense I'm gonna take a break in just a moment but I come back to that [TS]

00:30:40   because I think it plays into the next wanna talk to you about which is [TS]

00:30:43   software as differentiation which i think and reason I think it's a good [TS]

00:30:47   parlays I think it helps explain Samsung's problem which is something you [TS]

00:30:52   wrote about this week and i also think it's something that might finally be [TS]

00:30:56   sinking in [TS]

00:30:57   in Wall Street consists Consensus Estimate of Apple is that tablet Archos [TS]

00:31:04   tablets you know that the iPad and iPhone do have a a sustainable position [TS]

00:31:09   because of the differentiation but a butthole that I think about it while I [TS]

00:31:13   thank our first sponsor our good friends at Squarespace let you guys know [TS]

00:31:19   Squarespace I talk about it all the time because their longtime supporters this [TS]

00:31:23   podcast and many others you can get a free trial [TS]

00:31:28   10% off if you visit square space.com in enter offer code JDG just jpg my [TS]

00:31:34   initials check out what do they do they let you you sign up for Squarespace and [TS]

00:31:39   they help you build a website and its so easy simple easy beautiful design whole [TS]

00:31:46   bunch of beautiful templates to choose from [TS]

00:31:48   drag-and-drop content just you don't have to code it up you look at it and [TS]

00:31:52   you had the features you want position among the page where you want by [TS]

00:31:56   drag-and-drop if you want to get into the nitty-gritty you want to edit CSS [TS]

00:32:00   you want to inject JavaScript stuff like that you can do that too if you're if [TS]

00:32:04   you want to if you know how to but if you don't you can build a complete [TS]

00:32:08   website by drag-n-drop the other things Squarespace has that is again I'll use [TS]

00:32:13   the word differentiation is award-winning 24 7 support they do it [TS]

00:32:19   through live chat and email and it's located they have support centers in New [TS]

00:32:26   York City Dublin and Portland Portland is new I think and I think the logic [TS]

00:32:32   behind that is that's what helps them have twenty-four seven is between Dublin [TS]

00:32:37   and New York City and Portland Oregon [TS]

00:32:42   coverage all across time zones they've got plans that started eight bucks a [TS]

00:32:47   month 8 box and includes a FREE domain name if you sign up for a year [TS]

00:32:51   responsive design everything looks great from phones and tablets to 30 inches [TS]

00:32:56   this place and online stores every site comes with an online store so go there [TS]

00:33:04   go to Squarespace dot com slash Gruber go that way you can use that URL don't [TS]

00:33:11   know you came from the show and when you sign-up use that code jeje you get 10% [TS]

00:33:16   off your first purchase and all know that your listener of the talk shows on [TS]

00:33:20   my thanks to Squarespace alright so tell me about the tell me you tell me about [TS]

00:33:26   software differentiation as it as an advantage in and the lack thereof is a [TS]

00:33:31   disadvantage and in mobile I think things will get look at computers I mean [TS]

00:33:38   like I have if you have a macbook it runs OS 10 if you have any other [TS]

00:33:42   computer runs it runs Windows and even if you had the exact same hardware if [TS]

00:33:49   you have a preference for OS 10 you're going to buy the one has lost 10 and and [TS]

00:33:56   even if I virtually identical hardware if the OS 10 machine costs $1000 and the [TS]

00:34:03   windows of $100 well turns out there are a lot of people that will pay the extra [TS]

00:34:07   $200 for that machine and that $20 is pure profit right even if they don't [TS]

00:34:13   perceive a difference in the heart where exactly it even if you're there and if [TS]

00:34:19   side-by-side with the screens off you don't see an advantage to the MacBook [TS]

00:34:26   Air vs the HP you know HP air whenever they call their their even happen even [TS]

00:34:33   if Apple license doubt their hardware right and it was like literally every [TS]

00:34:40   single component on this computer is identical trackpad as a stress include [TS]

00:34:45   but doesn't like people will pay a premium for that I'm sure I'm speaking [TS]

00:34:52   to the choir here with you know with you and your audience and and button by [TS]

00:34:57   definition that premium is his profit because like you with Samsung's a big [TS]

00:35:03   way call these guys are big ISPs a big lake with their they are all going to [TS]

00:35:07   get the economies of scale that Apple is getting you know so if the parts for [TS]

00:35:11   this machine costs $750 let's say and the guy who has Windows charges $150 a [TS]

00:35:21   profit that's not very great [TS]

00:35:23   meanwhile Apple's charging a thousand that's $20 a profit that's 33 percent [TS]

00:35:29   that's pretty that's very good and that that difference is solely because that [TS]

00:35:36   it runs around those ten and it turns out that Apple is the only company that [TS]

00:35:41   sells always 10 and you can't biosensor put on your computer you have to buy the [TS]

00:35:47   hardware is to get the software and and that makes the hard work that makes the [TS]

00:35:52   heart grow valuable and you know I think it's it's it's valuable in a way that [TS]

00:35:59   generates profit right it's all it's all upside because software is software is [TS]

00:36:03   pretty [TS]

00:36:04   I mean it doesn't it's not free to make but to make one additional copy of [TS]

00:36:07   software is free right if I was ten to make another OS 10 is literally just [TS]

00:36:12   clicking a button and that's exactly what phones you know if you prefer Iowa [TS]

00:36:18   esterhaus ecosystem what there's only one way to get iOS and that's to buy [TS]

00:36:23   hardware from Apple and so even if HTC or Samsung like made in an iPhone or [TS]

00:36:32   every single component was the same look and feel was the same in the camera was [TS]

00:36:35   the same and button was the same outlook could still charge a premium because [TS]

00:36:41   people will pay for iOS yet I was doesn't cost anything and you know so [TS]

00:36:47   that's that's why Apple dominates profits and that's why I think your [TS]

00:36:52   point why Apple AAPL is safe in a lot of ways like it leads to less [TS]

00:36:58   fluctuation year-over-year and less pressure to come out with and this is [TS]

00:37:04   something that has gotten named in the press [TS]

00:37:07   year after year to year a new iPhones well geez this is almost just like last [TS]

00:37:11   year's iPhone but it's a little smarter and the small you know a little faster [TS]

00:37:14   and the cameras better and I think you see that with Samsung flailing around [TS]

00:37:19   with a lot of gimmickry in their new phones like went a year and a half ago [TS]

00:37:24   when they came out with the ones that tried to read your eyes you know hey [TS]

00:37:29   look up will pause the video for you or will scroll the webpage why you moving [TS]

00:37:32   your eyes which wasn't you know and by all the reviews I've seen wasn't really [TS]

00:37:37   a good feature but it they needed some way to to do that to stay above the fray [TS]

00:37:41   of all the other Android phones that are you know where similar to the previous [TS]

00:37:47   Samsung phone whereas Apple doesn't really need to worry about gimmicks like [TS]

00:37:52   that because you know people who want to buy an iPhone are going to buy the new [TS]

00:37:58   iPhone no matter what right in so then the problem is this is this actually why [TS]

00:38:02   in the long run you end up not having hardware comfortable to Applewhite why [TS]

00:38:07   do I mean why doesn't someone you hear this lovely quiet aren't there any [TS]

00:38:11   laptops as good as MacBooks I mean there there are some Lenovo why would I will [TS]

00:38:16   always hold up as the one who's who's closest and I would take I would take a [TS]

00:38:21   ThinkPad if they'd better screen battle remember those machines are are amazing [TS]

00:38:28   well I've always said that if I couldn't go as a what if scenario you know it's [TS]

00:38:33   not going to happen but if you had to choose between a ThinkPad running OS 10 [TS]

00:38:38   or a MacBook Pro running Windows which would you prefer and I i wouldn't even [TS]

00:38:43   hesitate at rather everything I don't think I would prefer ThinkPad running [TS]

00:38:49   almost 10 vs MacBook running almost 10 but I was always trying another software [TS]

00:38:55   acquired taste I get that it's the software that's more important right now [TS]

00:38:59   that looks at what happens though is so so what say you start out at point zero [TS]

00:39:04   right and the Apple you have to your Samsung and Apple's a [TS]

00:39:09   make identical phones and they and one runs Android in the runs runs OS 10 [TS]

00:39:16   sorry iOS yeah right like like hypothetically speaking let's take [TS]

00:39:20   Samsung's copying to the logical extreme and and legalities aside let's say that [TS]

00:39:25   they made a genuine complete clone of the iPhone so so that is perfect exactly [TS]

00:39:30   the same the problem is and so they're the problem is is obvious because [TS]

00:39:35   Android is open and there's lots of hardware manufacturers out there [TS]

00:39:37   someone's gonna come along and make another another Android phone and maybe [TS]

00:39:43   they copy it to make it the exact same way where are they going to do [TS]

00:39:47   Samsung so Apple's priced at $600 thousands prices $600 [TS]

00:39:52   income is gonna priced at $595 and then I won't go by the other one and then see [TS]

00:39:59   what happens as the respond by lowering the price for the promise as you lower [TS]

00:40:03   the price now your margins getting compressed and so you start cutting [TS]

00:40:06   corners so suddenly this place is not quite as good or the button quality is a [TS]

00:40:12   little work or you know in so what what happens is because you're forced to [TS]

00:40:17   compete on price the quality actually end up going down along the way because [TS]

00:40:23   it's like death by a thousand cuts and that's why you saw this in PC's laptops [TS]

00:40:30   have always been a Windows laptops have mostly always been inferior from a [TS]

00:40:36   quality perspective it's not it's not be nothing to do with the software Perseids [TS]

00:40:41   because they're stuck in this game where they have to find margin somewhere right [TS]

00:40:45   and but then they screw up the software because to try to squeeze little bits of [TS]

00:40:49   March margin is why they do things like pre installed Norton bug you until you [TS]

00:40:57   sign up for Norton experience right going to buy a brand new laptop and you [TS]

00:41:03   open it up benefits running Windows in its from most OM's you're gonna have [TS]

00:41:08   stuff that's not from Microsoft officially part of windows and it's all [TS]

00:41:12   annoying and it's there to try to a lot of it is there to try to increase the [TS]

00:41:17   margins because Norton gives them [TS]

00:41:19   you know two or three bucks for everybody who has a pre-installed so [TS]

00:41:23   that's actually that's actually where most OEM make older margin [TS]

00:41:26   actually most most computers are made at cost and then any profit margin they [TS]

00:41:31   make us from the crapware and thats wife to get a crap we're free machine you [TS]

00:41:36   have to pay more and like the thing is like the [TS]

00:41:41   in Windows you know I i've heard from ickes often work with Windows and they [TS]

00:41:44   would bitch and moan about how terrible the hardware was but this is all [TS]

00:41:48   Microsoft's fault right they it's one of those things where it was always to [TS]

00:41:54   their benefit right through the whole thing where you want to [TS]

00:41:57   commoditized compliments like the things that are important for your product but [TS]

00:42:01   that you don't sell you want them to be as cheap as will cost as possible and so [TS]

00:42:06   it was in Microsoft's great benefit that computers decrease in costs so rapidly [TS]

00:42:12   there's always competition in driving down prices but the problem is as with [TS]

00:42:17   anything you take it too far and then you're stuck with your stuck with these [TS]

00:42:21   terrible machines with creaky hinges and crap world with them and and then that [TS]

00:42:27   rolls back and now it's being ascribed to Microsoft in the right well Microsoft [TS]

00:42:31   always as machines and whatever and and it's the same thing with Google that [TS]

00:42:36   Google's even more ruthless right they don't they want everything to be free [TS]

00:42:41   everything to not cost anything they want people to be online as much as [TS]

00:42:45   possible as easily as possible and there are more than happy to watch Samsung HTC [TS]

00:42:50   and everyone kind of killed themselves here and again Google's quite smart [TS]

00:42:56   about this because to earlier point because smartphones are going to be [TS]

00:42:59   everywhere [TS]

00:42:59   everyone's going to have one like there would there really is no or two like how [TS]

00:43:06   cheap or crappy a a phone can be because someone is going to buy it [TS]

00:43:10   there's a tweet from earlier today he was earlier earlier today from [TS]

00:43:17   mutual friend Benedict Evans I think it's very very well so much summarizes [TS]

00:43:24   the situation in the long term it is hoped we posit a Wii ends will be able [TS]

00:43:29   to differentiate on this common platform has been a false promise for thirty [TS]

00:43:34   years right that and kickin it old school year but I mean this was [TS]

00:43:40   something like when Apple was in trouble in the nineties that was over and over [TS]

00:43:43   and over again people would say well what Apple should do is start making [TS]

00:43:47   Windows machines to differentiate on on design right so Apple would you know how [TS]

00:43:54   Apple strength isn't Mac OS are getting killed because america so much smaller [TS]

00:43:57   than windows in everybody's on Windows when Apple's good at is designed so [TS]

00:44:01   Apple should ME Windows machines and differentiate on design and that's it's [TS]

00:44:06   actually that's exactly would say that's exactly the Sony PC business right that [TS]

00:44:13   was there are right and how'd that work out they their bio is now its own [TS]

00:44:19   companies that I would say Sony gave that as good a run as anybody and they [TS]

00:44:28   were very nice computers right and and you know innovative in certain ways to [TS]

00:44:34   like those got small like use the ball small laptops you know right before [TS]

00:44:42   everyone else with you know with with minimal compromises and it just it's not [TS]

00:44:48   sustainable on a common platform ya know it's like I think I like the analogy is [TS]

00:44:53   almost like air travel [TS]

00:44:55   I'm not sure this works it literally just occurred to me but like everyone [TS]

00:44:59   like bitches about like oh we want good service on airplanes in late we want [TS]

00:45:03   more seats were more seating area and stuff like that [TS]

00:45:06   the promise every single time and airline tries that like continental is [TS]

00:45:10   going to have better service [TS]

00:45:12   American Airlines I think we're going to have more more room in our house we [TS]

00:45:16   advertise based on that and we're going to be able to charge a slightly higher [TS]

00:45:20   price [TS]

00:45:21   well guess what everyone kept going Expedia kayak irreverent the lowest [TS]

00:45:25   number [TS]

00:45:26   this is very painful to me because two or three years ago [TS]

00:45:31   Virgin America came to Philadelphia and the most welcome breath of fresh air in [TS]

00:45:38   the history of PHL international and they are leaving in two months because [TS]

00:45:47   well it's not you know and they're not going away but it clearly it wasn't a [TS]

00:45:53   big success for them and they were always more expensive USAir is that [TS]

00:45:57   carrier that dominate PHL one of their hubs and there there they've got this [TS]

00:46:02   merger with American and part of the concessions for this merger is they had [TS]

00:46:08   to give up gates at Washington and one of the new york 1 I'm guessing it [TS]

00:46:16   probably JFK JFK is bigger [TS]

00:46:19   that that combined USAir an American have to give up some some number of [TS]

00:46:26   their gates at those and Virgin decided to take I think I don't they took him to [TS]

00:46:30   washington to but I know that they took some of their JFK want and they [TS]

00:46:34   literally don't have enough airplanes so they have to take the airplanes that [TS]

00:46:37   have been flying to Philly roots and they're gonna be fine JFK route and [TS]

00:46:41   they're they're like it's like a waiting list it's like trying to get Washington [TS]

00:46:46   Redskins season tickets or something like there's there's like five year [TS]

00:46:51   waiting list to get new airplanes from Boeing or something like that they can [TS]

00:46:54   just order them yeah and I don't think that they were you know pretty sure [TS]

00:46:58   virgin America's never turned a profit anyway [TS]

00:47:00   quarter know if I was gonna mention that he just doesn't work because it's one of [TS]

00:47:06   those things like air air travel is a is a commodity and it's so it's a sort of [TS]

00:47:13   hold up it is a commodity and its there's an economy of scale like that's [TS]

00:47:18   the thing is that you've kind of in there that's the magic you've got to get [TS]

00:47:21   off the ground somehow and get this this of of users to sustain it is different [TS]

00:47:31   just don't have it that Virgin America just didn't have at least out of Philly [TS]

00:47:36   you know me I think the whole business thing right because they're the ones [TS]

00:47:41   that are price insensitive and not an airline's it is actually a ton of people [TS]

00:47:48   that I know I I myself am kind of people I follow on Twitter and it's been a [TS]

00:47:54   there's actually there's quite a few people in in intact whatever that as a [TS]

00:48:00   side thing I'd love to follow the airline industry it's so much better [TS]

00:48:05   than others I mean I and i actually have gold status on USAir [TS]

00:48:09   at all ever fly a me every flight i take whether to vacation or whether it's work [TS]

00:48:14   to go to the west coast it's always USAir and because so many my flights are [TS]

00:48:19   entirely across the country have somehow gotten the gold status which is good [TS]

00:48:24   customer service wise I can book tickets now that that I like fun double I can [TS]

00:48:29   change my tickets and not pay a fee like literally not even pay like it's kind of [TS]

00:48:34   awesome and if I can book a flight on Virgin America and it costs more I would [TS]

00:48:40   do it in a heartbeat because it's such a nice experience unfortunately you know [TS]

00:48:44   you you have a you know when a reputation for valuing quality in the [TS]

00:48:49   products you buy about that is that is not broadly shared I've been on I've [TS]

00:48:54   been on flights [TS]

00:48:55   the last time I flew in for the most part it was all SFO to Philly other [TS]

00:49:01   sometimes depending on the hours I would I would even take this is what I would [TS]

00:49:05   do to is i would fly silly to lax LAX to SFO on Virgin rather than a nonstop [TS]

00:49:13   which I've numerous numerous choices between us iPhone Philly on USAir right [TS]

00:49:17   rather have the layover in LAX and which ones you're fine for now it makes a [TS]

00:49:21   difference right [TS]

00:49:23   wifi everything I mean it's just so much more comfortable that plane doesn't have [TS]

00:49:30   a funky smell but anyway but yeah there's not enough people like me to get [TS]

00:49:36   it off the ground is funny videos by soprano airlines but I'm basin is aware [TS]

00:49:42   awake flying economy class on an Asian airlines like fine like above first [TS]

00:49:47   class on a typical USA online [TS]

00:49:48   but it's how I just like to have like Stockholm Syndrome like they're like [TS]

00:49:55   visiting center-right they always do like the airline in like a million times [TS]

00:49:59   but I think Steve Steve Kovach didn't want to lose like Singapore Air [TS]

00:50:04   like marveling at like every seat has like its own television got how bad the [TS]

00:50:11   economy class on USAir is literally just a bigger see they do give you a meal [TS]

00:50:16   they do give you a meal that you don't get back there but it's so bad that I [TS]

00:50:20   mean honestly you're a fool if you hit it I i coming you're just asking to be [TS]

00:50:25   made sick I mean you get drinks you know it's a bigger seed and you get you get [TS]

00:50:31   alcohol drugs which ones do not frown upon to too much but I know but you know [TS]

00:50:38   it's it's it's so much different than international airlines yeah we are we're [TS]

00:50:43   massively it was funny so we are we afraid so that that's out there were way [TS]

00:50:48   off though I do think it kind of explained the race to the bottom in on a [TS]

00:50:55   commodity platforms like Windows and I think that's where Android is heading [TS]

00:50:59   makes it different though maybe it's the same because of the thing with airline [TS]

00:51:06   is because it is super heavily regulated rate like you there's a certain late for [TS]

00:51:10   of service you fly like frontier spirit or you know like the cheap ones are like [TS]

00:51:16   you can feel reasonably confident that they're going to get you there in one [TS]

00:51:20   piece right because they all to pass the same FAA regulations they'll have the [TS]

00:51:24   same maintenance like you know regimes and so because of that like it's not [TS]

00:51:30   like you're flying in like wow this guy like $3 cheaper but they have a plane [TS]

00:51:35   crash like everyone's everyone that a certain level and what's happened with [TS]

00:51:42   smartphones as you're getting actually assume or a similar idea like a few [TS]

00:51:46   years ago even a couple years ago the difference between a toreador smartphone [TS]

00:51:51   in a four-door smartphone was was huge [TS]

00:51:54   now there really isn't that much of a difference at all and by the way that [TS]

00:51:58   smartphones $900 [TS]

00:52:01   $150 smartphone and so like the the the the difference between the high and low [TS]

00:52:08   when is shrinking and what's funny is everyone uses this is they were Apple's [TS]

00:52:12   doomed but they're only doomed if you ignore the software right all those [TS]

00:52:17   criticized the first time in this article like I said well over a year ago [TS]

00:52:21   that Samsung was in trouble because unlike alcohol there is nothing to make [TS]

00:52:27   a Samsung phone different from a no-name phone and an especially in China where [TS]

00:52:35   in China like there is their first other things are different China one there's [TS]

00:52:41   just way more because that's where the manufacturing happens like there's just [TS]

00:52:45   way more phones there there's way more companies making phones [TS]

00:52:49   the vast majority of which don't export it all so there's tons and tons and tons [TS]

00:52:53   of breath of corporate brands in China most of whom I've never heard of much [TS]

00:52:57   less than one else so one there's just way more competition and then to in [TS]

00:53:03   China mode for the most is much more sold the phone is separate from the from [TS]

00:53:09   the plan so you you usually not always I mean and actually the iPhone is pushed [TS]

00:53:15   more of a subsidy into the system but especially traditionally it's always [TS]

00:53:19   been very separate where you buy your [TS]

00:53:21   you by your service from the carrier and you buy your device from device seller [TS]

00:53:27   like there's different transactions and so that that new orders Samsung's [TS]

00:53:32   carrier banja doesn't really exist as much there and then you add on top of [TS]

00:53:37   that Samsung did have more brand in China what you're going to buy it be [TS]

00:53:42   better to buy a $20 sampling phone then toward our Chinese phone because Samsung [TS]

00:53:46   was a meaningful brand and that's where you get into that massive spend that [TS]

00:53:51   Samsung still has on on marketing calling but that just destroyed that [TS]

00:53:57   like that like show me his show me which I mean really does have one common Apple [TS]

00:54:03   is like shamas founders are like rock stars right there are jobs [TS]

00:54:07   and you know in the craig Venter ease of of of China and their phones actually do [TS]

00:54:14   I've never held my hands I can't speak to build quality but he take a look at [TS]

00:54:18   them and they do to me to my eyes instantly look better designed than [TS]

00:54:23   Samsung in and most other brands under the quality the qualities and the I've [TS]

00:54:29   held both in the world when the woman was was wasn't the most previous one it [TS]

00:54:35   was a little like I thought it was a little flimsy but it was in there was a [TS]

00:54:39   fully functional like there's no problem is today you can tell you know hundred [TS]

00:54:46   bucks cheaper than its sibling but again that's that's improving as well those [TS]

00:54:51   are way better than what was available the price point [TS]

00:54:54   previously and and so for Xiaomi and then show me house like you know they [TS]

00:54:58   have these rock stars and then there's the whole Chinese like social network [TS]

00:55:02   you know what you talked about last time we chatted and and all these sort of [TS]

00:55:05   things where they where they actually sell they sell complete the online so [TS]

00:55:09   they don't have to pay any overhead two carriers they pay nothing for marketing [TS]

00:55:13   they just basically sell everything through their brand in through the [TS]

00:55:15   website and so they can keep their costs super low and then their whole business [TS]

00:55:20   model is the basal cell at cost right they say they're gonna make it up by [TS]

00:55:23   selling by selling services [TS]

00:55:26   App Store and all that sort of stuff and and Samsung is just getting walloped [TS]

00:55:31   like Samsung can't compete with that and that's why Apple is more threatened in [TS]

00:55:36   China by some as well because she'll me isn't just sheep they're they're cheap [TS]

00:55:40   and they're they're a brand in their wake their ass statement like they're [TS]

00:55:45   saying something by clearing Xiaomi phone and that is also important China [TS]

00:55:50   always like China yes the software is important but it's not it's actually I [TS]

00:55:55   think it's Wes its west of a differentiator in in China especially [TS]

00:56:00   because there's always a lot of crazy stuff you do the Android right that that [TS]

00:56:03   the China the Chinese value and worth the walk down actually works against [TS]

00:56:10   them lot of ways it is actually area where the keyboards are gonna help [TS]

00:56:13   that's why I there's lots of alternate Chinese keyboards [TS]

00:56:18   that I I know people that's been a hold up for not want to go with us but even [TS]

00:56:24   beyond that there's tons of stuff like this the whole idea of skinning staff [TS]

00:56:27   and having all these cutesy things in all this all this stuff on your phone [TS]

00:56:31   that we in the West Hills very very weird like that it's just different [TS]

00:56:35   there you go to you go to your Yahoo China where I do it like the pages are [TS]

00:56:41   all busy newslink's everywhere and they're just like they hurt your eyes [TS]

00:56:44   like it's just a very different as static and so it shall meet delivers all [TS]

00:56:50   that need to let you customize let you do this all the store stuff yet they're [TS]

00:56:53   also cool and so that but all those advantages only exist in China and so [TS]

00:57:01   that's why I shall meet a big deal in China but I'm Way more skeptical about [TS]

00:57:04   them outside of China because it is in transit as much right let's hope this [TS]

00:57:10   type of pic right back up and where I want to go but I want to thank our [TS]

00:57:13   second sponsor another longtime supporter of the show our good friends [TS]

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00:57:36   slash during fireball download it you have 30 days see how it works completely [TS]

00:57:42   and after that only after that they ask you for a credit card and I guarantee [TS]

00:57:46   you're probably gonna sign up because it's great they have over 100 petabytes [TS]

00:57:53   of data backed up among all their users now last week I said I don't even know [TS]

00:57:57   how much that is a good transit back please get in touch so one petabyte is a [TS]

00:58:02   thousand terabytes they have a hundred petabytes of data backed up that's how [TS]

00:58:08   much I have stored they've just crossed the six billion while mark for how many [TS]

00:58:14   files have been restored by users in other words users of that plays have [TS]

00:58:19   restored six billion files that have back-to-back place lots of users [TS]

00:58:26   great track record great software and iPad and iPhone app I mean to access and [TS]

00:58:32   sharing of your files from anywhere you can restore one file at a time if it's [TS]

00:58:38   just like oh my god I just need that one thing I don't know where it is not on my [TS]

00:58:41   machine back place has a backup or all of your files easily with the web [TS]

00:58:46   restore 25% of all restores they were just one file it's not just for computer [TS]

00:58:52   disasters although it's great peace of mind and great service if you do run [TS]

00:58:55   into a disaster [TS]

00:58:57   founded by at X Apple engineers it runs natively on your Mac Mavericks there's [TS]

00:59:03   no add-ons no gimmicks no additional charges it's just five bucks a month per [TS]

00:59:10   computer for unlimited under on a backup quarterback blaze dot com slash daring [TS]

00:59:16   fireball and just downloaded if you haven't already so my thanks to you I [TS]

00:59:21   think the irony the irony of the whole Samsung Apple then is that the room the [TS]

00:59:24   the consensus refrain against Apple I would say what why like the stock was [TS]

00:59:31   depressed after Tim Cook first took over that they [TS]

00:59:35   unsustainable for the minority marketshare OS two do know that they [TS]

00:59:40   they can't sustain it against Android inevitable that it's gonna be all [TS]

00:59:45   commoditized in the whole thing's gonna collapse and Samsung is gonna beat them [TS]

00:59:51   Samsung is more innovative than Apple they can't they can't beat Simpson I [TS]

00:59:55   think the irony is that it's really all those arguments really were to apply but [TS]

01:00:00   they don't apply to Apple AirPlay the Samsung yup you know that the knock [TS]

01:00:05   against Apple for most of 2011 2012 maybe even into 2013 really was the case [TS]

01:00:12   against Samsung that that differentiation that they had for a [TS]

01:00:16   while was not sustainable [TS]

01:00:18   no that's that's exactly i mean i think is when we first connected was you know [TS]

01:00:23   I wrote a piece called to bears like that basically it is pointed its to like [TS]

01:00:30   for some reason and it's funny like I wrote another piece to bears revisited [TS]

01:00:35   where I trudged up by some old like PC reviews of like [TS]

01:00:39   MacBooks right and in every single one of them they don't talk about the [TS]

01:00:43   operations what ports it has the screen call the quality in like [TS]

01:00:49   analyst at the same thing and it's it's just it's so weird right and like how [TS]

01:00:56   can you how can I think the vast majority the apples doom narrative comes [TS]

01:01:01   from people that fundamentally don't rock the the software differentiation [TS]

01:01:06   right and if you don't understand that then yes Apple is doing they're selling [TS]

01:01:12   very expensive gadgets when you can get a perfectly good gadget for a quarter of [TS]

01:01:16   the price right and it's it's almost impossible to oversee they'd just how [TS]

01:01:26   high the table stakes are to get into that that you know so so clearly the [TS]

01:01:36   biggest thing that happened in Techiman spent most of the last seven years [TS]

01:01:40   talking about one thing which is the the revolution that iOS sparked as all about [TS]

01:01:45   iOS Android followed but it's changed the world but it it wasn't just that [TS]

01:01:50   Apple in 2005 through 2007 was able to create iOS it that I O S entirely is [TS]

01:01:59   based on work that started in 1988 with next and that is in some sense it was a [TS]

01:02:06   continuous effort not to do that in 1988 or 1989 that next had in mind something [TS]

01:02:12   like the iPhone but there's so much that is shared and that is built on you know [TS]

01:02:18   and why you know for example just just the simple aspect of you know it was [TS]

01:02:22   something that came up once again just every single year just like it being the [TS]

01:02:26   year of Linux this is the year where Android get 60 frames per second [TS]

01:02:29   animation why does the iphone have better less stories scrolling and [TS]

01:02:35   animations and then during its not because of work that Apple did not only [TS]

01:02:39   because of work that Apple had did in 2006 through the present it because of [TS]

01:02:43   work that that Apple has done since 1988 what up on next two NYT on the same [TS]

01:02:49   point [TS]

01:02:50   Windows Phone came out after and radio when his phone is always had better [TS]

01:02:53   animation exactly been writing device drivers in the eighth grade and and has [TS]

01:03:00   always to their credit for all the knocks you can give against windows up [TS]

01:03:05   until this had a tremendous reputation for at least the interface in Windows [TS]

01:03:13   was snappy and responsive right especially like you know XP versus the [TS]

01:03:18   early versions of Mac OS 10 [TS]

01:03:20   Apple wasn't Apple felt slap in the face felt slower because they were doing said [TS]

01:03:26   to be so much more graphically it was like a long play that got them to where [TS]

01:03:31   they can do these things like that you know stuff but anyway [TS]

01:03:35   following different paths in with different priorities Microsoft Apple [TS]

01:03:38   both have decades of work that that that's resulted in the snapping of the [TS]

01:03:45   interfaces you see the day and so it's it's it's just so hard to overstate how [TS]

01:03:51   hard it would be for somebody like Tyson are like Samsung to get tyson [TS]

01:03:54   established as a true here to those platforms I mean I think yeah I mean [TS]

01:04:03   it's easy to look at the the App Store and that's certainly a big part of it [TS]

01:04:07   but like anything about it but that's another part of the table stakes at this [TS]

01:04:11   point though because it wasn't in 2007 or 2008 right now is that there that's [TS]

01:04:17   my point right to see everyone everyone you can stop there and say that's reason [TS]

01:04:21   enough that no one else is gonna break in if you'll get iOS like that to me [TS]

01:04:25   there's like three Americans units right but there's three kind of seminal [TS]

01:04:29   proprietary things that happened that made us one and this one is next [TS]

01:04:35   back in the eighties so that's where it started to was the iTunes Store and then [TS]

01:04:44   three was was the App Store which I guess which I guess is part of that the [TS]

01:04:47   like [TS]

01:04:49   what makes Iowa what it is has been a decade-long process and and that and [TS]

01:04:57   that's that's the thing right it's not just that Apple's differences it's [TS]

01:05:01   almost a little too simple to say alcohol products are different by [TS]

01:05:04   software because it really is a differentiated by the entire ecosystem [TS]

01:05:08   and I everything that sits on top of it so now and we saw this with Palma not [TS]

01:05:13   always even if you came out with an operating system that was as as elegant [TS]

01:05:18   and easy to use [TS]

01:05:20   now that that is no longer enough and there is nothing like there are very few [TS]

01:05:27   things in business [TS]

01:05:28   broadly I think that are more challenging than building an ecosystem [TS]

01:05:33   because there's so many players involved there's so much out of your control I [TS]

01:05:38   like when I was at windows I was working on the one of the top story and you know [TS]

01:05:42   marriage of a few categories the absurd trying to get get people on board and [TS]

01:05:46   you need you need the users in place you need the developers in place you need [TS]

01:05:50   the right you need the right capabilities in the system like there's [TS]

01:05:53   it this is like speaking of watches like this [TS]

01:05:56   interlocking watch right but it's not like where you can put one piece in the [TS]

01:06:01   next piece in the mail work together you have to not just put all the pieces in [TS]

01:06:05   all fit in at the same time immediately right like that it just magically come [TS]

01:06:10   together and then work and without that it's you you're forced to go to short [TS]

01:06:17   cuts worth paying developers whether it's you know try to cope with something [TS]

01:06:22   that's so unique that people will look over the the holes I was trying to do [TS]

01:06:28   but it it's fiendishly hard and this is this is if Apple is discounted on wall [TS]

01:06:37   street and I think this is going away to your point but it's it's on this is that [TS]

01:06:42   people don't like someone told me that youre what Wall Street values is knowing [TS]

01:06:51   that you can totally fuck it up and you'll still be in business [TS]

01:06:54   rate [TS]

01:06:54   and so Microsoft can release and they're still gonna make tons of money you know [TS]

01:07:00   they can respond as aids still making their stock is higher now than it's been [TS]

01:07:04   in years that's an interesting point and this is this is one the reasons why [TS]

01:07:08   Amazon as always had such a strong stock is like people view them as being [TS]

01:07:13   untouchable right like their core business no one's going no one's going [TS]

01:07:18   to threaten it and Apple has always been viewed as well one bad break them and [TS]

01:07:24   they're in trouble and that's why the antennagate what was a big deal [TS]

01:07:28   22 lot of people's perception what is this it is that did they finally they [TS]

01:07:33   finally mess up and what I think they've missed it what most analysts miss is [TS]

01:07:38   actually Apple could really sadat in there would be OK because their [TS]

01:07:43   ecosystem advantage is so significant it's so hard to to catch up with that [TS]

01:07:50   yeah I totally agree that's a good point and I do think that there is you know [TS]

01:07:58   circling back a couple of minutes [TS]

01:08:00   segments ago that I do think that it's finally starting to dawn on the Investor [TS]

01:08:08   world you know that Apple is not on the precipice you know yeah you know i i [TS]

01:08:14   still think you're gonna see a lot of Jackass Sri related to Apple I still [TS]

01:08:19   think that you're going to see let's just say they you know that the ship [TS]

01:08:25   something that you wear on your wrist and it costs $300 and they sell 5 [TS]

01:08:30   million of them which i think is pretty reasonable for a new thing you know [TS]

01:08:34   let's just say I don't know who knows what the device does it's a dingus are [TS]

01:08:38   you wearing arrest and it sells for $300 in this all five million and there's [TS]

01:08:42   gonna be people who say multiply five million by $300 and say well that's [TS]

01:08:48   nothing that that that averages out to 0 for Apple there for Apple is doomed [TS]

01:08:52   because they needed to sell fifty million of them which doesn't happen [TS]

01:08:55   with new products right [TS]

01:08:58   you still gonna see that to some degree but I think that most there's there's [TS]

01:09:04   that it's going to be the friends that holds onto that rather than conventional [TS]

01:09:10   wisdom as part of the what we talked about like there is kind of like this [TS]

01:09:16   Apple had to go through the valley little bit as far as like perception [TS]

01:09:20   goes in and this is something where I'm at no I talked to talk to some people [TS]

01:09:25   who you know much about people and we're very nervous about cook meeting with [TS]

01:09:31   like Carl Carl Icahn and stuff like that in and really hold up as a counter to [TS]

01:09:35   white you know what job you have done for all but a tocar like an exactly and [TS]

01:09:41   but think this this was and I i was sympathetic to dream of always been very [TS]

01:09:47   sympathetic to cook position that you know the stock price matters a lot for [TS]

01:09:52   employee retention is kind of in my my position but I think we're seeing now is [TS]

01:09:58   that kind of effort paying off right like a bull I feel like Apple has gotten [TS]

01:10:05   a lot more breathing room [TS]

01:10:07   do that we just said and and that actually is too I think looks crowded as [TS]

01:10:12   well yeah I think maybe you know and I want to psychoanalyze me because you [TS]

01:10:17   know I'm not a psychoanalyst too distant but that there's something to be said [TS]

01:10:22   that among the way the cookie is a great CEO for Apple right now in way and ways [TS]

01:10:27   ways that he is better than Steve Jobs is ego right that obvious I mean famous [TS]

01:10:33   and owning it takes you know you have to be a psychologist to say that Steve Jobs [TS]

01:10:37   had a very large ego you know and I think while Apple was an upstart it [TS]

01:10:43   helped you know it helped to have a rock star at the helm of the company and but [TS]

01:10:49   doing something like going to dinner with carl icon that shows that not that [TS]

01:10:54   doesn't have a large ego but that he's willing to sublimate it you know he's [TS]

01:10:58   going to say look I really doubt I'll bet I really doubt that he felt like [TS]

01:11:04   going to do with Carl Icahn [TS]

01:11:05   but he did it because it was good for the company you know I think there's a [TS]

01:11:08   certain extraordinary diligence 222 the way Cook is is doing that humility maybe [TS]

01:11:16   that's a better word that there's a humility to Tim Cook you know whether [TS]

01:11:22   that's in need whether they'd partly his southern upbringing I don't know but [TS]

01:11:26   it's you know one thing you nobody would say about Steve Jobs is that he was [TS]

01:11:29   humble yeah and I think it's one of those things where is super easy to like [TS]

01:11:34   what back on someone writing you only see the positive sides but if if Steve [TS]

01:11:39   Jobs acted like Steve Jobs does well Apple is the most valuable company in [TS]

01:11:43   the world like you would like to think that everything is logical no one liked [TS]

01:11:50   it a lot easier to see them getting themselves in trouble [TS]

01:11:53   whether it be with the government will be with like with other people like you [TS]

01:11:59   know the weather be the App Store source that I mean I don't know what it would [TS]

01:12:03   be but that kind of imperious this where is much better to your point when you're [TS]

01:12:09   when you're the underdog as opposed to when you're the intern pound gorilla and [TS]

01:12:13   I was when I this is something that was talked about a lot you know I was there [TS]

01:12:17   you know he was like what we have to change like by virtue of being huge we [TS]

01:12:27   have changed and we can either accept that and then try to figure out how to [TS]

01:12:32   preserve what makes up about Paul or we can continue as we are but but that's [TS]

01:12:38   actually a worse place to be kind of being blind about the reality which is [TS]

01:12:42   the fact that we're this massive company now and and we can't be can never be the [TS]

01:12:47   way it was just because things have changed the world has changed [TS]

01:12:52   yeah and I think the flip side of that exact same thinking is what I wrote [TS]

01:12:56   about last month with only Apple piece that killed myself not going out and [TS]

01:13:02   about the way that you know that I i seemed it seems very clear to me that [TS]

01:13:08   Tim Cook has has brought about the same way that the operations manufacturing [TS]

01:13:13   has always been very very well-oiled [TS]

01:13:16   you know you said a multi-part wats all works together that he's bringing that [TS]

01:13:21   sort of efficiency to Apple's internals in Cupertino with divisions working [TS]

01:13:26   together across you know that things like just a perfect example the way that [TS]

01:13:30   this extensions is coming to yosemite and Iowa say the same time as they're [TS]

01:13:36   working together I spoke to some of the engineer's you know and that apple just [TS]

01:13:42   was not set up that way those were silos previously and it would have been you [TS]

01:13:47   know they even called it the one time back to the Mac it's like okay here's a [TS]

01:13:51   bunch of stuff where iOS got ahead of the Mac it's already shipped it shipped [TS]

01:13:55   last year you know in last year's version of iOS and now we're bringing it [TS]

01:13:58   to the Mac Apple is working like that now they're developing these things [TS]

01:14:03   together you know and some of them are things that have to be done together [TS]

01:14:07   like I keep forgetting the name of the future but you know hey there's a web [TS]

01:14:13   page in front of me in Safari on my Mac and I wanna bring it over to my phone [TS]

01:14:16   continuity continuity while the country's the parent name for all of [TS]

01:14:22   these features but there's a specific name for handoff right hand off is that [TS]

01:14:26   is continuity is like the umbrella name for all of the features that I like this [TS]

01:14:30   like answering a phone call on your Mac is part of continuity to but they're all [TS]

01:14:36   you know that did you know and to me it's a realization that it's not just [TS]

01:14:43   about Tim Cook having a different personality than Steve Jobs I think it's [TS]

01:14:48   about Apple being big enough that they can do things like this like it's not [TS]

01:14:52   that saved apple circa 2003 or 2004 could have been operating like that or [TS]

01:14:58   should have been operating like that under Steve Jobs and that the different [TS]

01:15:02   you know Steve Jobs mercurial nature kept them from doing it they weren't big [TS]

01:15:05   enough to do it and they weren't you know they needed to be more focus I [TS]

01:15:09   think it was the right I think it was the right strategy but they've you know [TS]

01:15:12   they've crossed a certain chasm in terms of size [TS]

01:15:17   where if they didn't embrace a more collaborative culture they were missing [TS]

01:15:22   an enormous opportunity you know that they were leaving an enormous amount of [TS]

01:15:27   of wasted potential on the floor because they could be doing so much more in the [TS]

01:15:33   same amount of time with a more collaborative culture than they would [TS]

01:15:36   otherwise so here's here's the question though so I I agree I wrote something [TS]

01:15:43   that after your peace my my my podcast exponent with with James Allworth we [TS]

01:15:50   talked about this is like yet it is what's so fascinating it and talk about [TS]

01:15:58   growing up and I talked about them you know kind of forgetting like the 1987 [TS]

01:16:03   mindset you know that's kind of holding them back and what's what's so striking [TS]

01:16:09   about this is the way in which that we are using went back and looked up [TS]

01:16:16   articles and profiles was the exact same language that was used for Microsoft in [TS]

01:16:22   the early 2000 like oh they've grown up like they're good at being you know [TS]

01:16:25   believes that there could be more collaborative and and yes they're [TS]

01:16:29   getting I'm not saying Apple Microsoft at all there's lots of important [TS]

01:16:33   differences but if you use it it is worth thinking about how do I was [TS]

01:16:39   curious what you think crises job said you know stay hungry stay foolish but [TS]

01:16:43   we're talking about them kind of growing up in and being a little less foolish I [TS]

01:16:47   mean do you worry at all that maybe there might be something that gets lost [TS]

01:16:52   in this definitely worried the wrong word but you know I definitely file it [TS]

01:16:59   under things to keep an eye on because I think it's uncharted territory I don't [TS]

01:17:05   think that they're following microsoft's footsteps I you know and and some people [TS]

01:17:10   if there is any criticism of my own the Applebees it was a long the lines [TS]

01:17:16   how is this different from what you know Steve Ballmer taking over from Bill [TS]

01:17:21   Gates you know and and they you know first couple of well actually the whole [TS]

01:17:26   time he did lead Microsoft is significantly higher revenue and profits [TS]

01:17:30   on a consistent basis while driving that you know ship that with the product [TS]

01:17:35   categories that were heading over a cliff strategically by being a little [TS]

01:17:40   bit more conservative in you know focusing on what we already have rather [TS]

01:17:44   than new stuff but I think that's not true though because Microsoft didn't [TS]

01:17:48   know that mobile is next and so yeah but they didn't want to disrupt themselves [TS]

01:17:51   and they didn't want to do mobile in a way that might decrease sales of Windows [TS]

01:17:55   PCs right I think that's the fundamental difference and that's to me is a good [TS]

01:18:00   thing that I don't worry about it I don't think if Tim Cook if somebody came [TS]

01:18:03   to Tim Cook with an idea that I don't know what it would be but clearly the [TS]

01:18:08   sacred Khalid financially as the iPhone it's you know it's I think it's over [TS]

01:18:13   half profits and a half of revenue even though the iPad is still growing and [TS]

01:18:17   it's huge and the Mac is doing very well [TS]

01:18:20   the iPhone is nothing if they came up with something that would make people [TS]

01:18:23   less likely to buy iPhones I don't know what it would be but if the cyst say a [TS]

01:18:28   watch that is so it doesn't it's not something that you Bluetooth tether your [TS]

01:18:33   phone it's just a watch and it would make people not buy iPhones and it only [TS]

01:18:38   costs $300 but it's so awesome that do with that genuinely Dr irrational person [TS]

01:18:43   to think I don't even need an iPhone anymore I don't think Tim Cook would [TS]

01:18:46   hesitate to do that to go ahead with it because if somebody could do it in mind [TS]

01:18:50   as you know that that logic of being able to to you know rather disrupting [TS]

01:18:55   yourself than having somebody else disrupt you [TS]

01:18:58   it holds true that I think he has the common sense to think well you know [TS]

01:19:01   that's where it's going you know I don't think he would hesitate to to chase that [TS]

01:19:05   and pursue that yeah I mean I think the the the best the best thing in support [TS]

01:19:10   of that is probably the iPad which you know is that american and I i do think [TS]

01:19:19   that you know and I don't think they care right and it sells for six [TS]

01:19:22   significantly lower [TS]

01:19:24   average selling price than even the cheapest MacBook Air let alone the [TS]

01:19:28   average selling price of regular MacBook right you know it's a probably half the [TS]

01:19:33   price at least the average selling price and I don't think Apple regrets it one [TS]

01:19:38   bit [TS]

01:19:38   yeah increased increase volume right right I i think that the only thing the [TS]

01:19:44   only the only hesitation I have is people always point to like the iPhone [TS]

01:19:48   replace the iPod what the problem is they're making more money on iPhones and [TS]

01:19:52   they were like 11 iPhone they do and what does not a great example that's why [TS]

01:19:56   I like the iPad one but it is interesting I think I i do I think that [TS]

01:20:02   Apple Microsoft is my Microsoft's strengths and advantages were not in the [TS]

01:20:11   product right i mean they they always been a marketing company by market me [TS]

01:20:17   not advertising but they've they've always done very very good job of [TS]

01:20:21   understand the customer's needs and building exactly what what they want [TS]

01:20:25   right now and that's why I'm all about compatibility stop in all do like all [TS]

01:20:30   multiple all the drivers use up all that is because it's everything they do is [TS]

01:20:36   bend they've really did have got bent over backwards to meet people's needs [TS]

01:20:41   right but that doesn't work so well when it comes to consumer products where you [TS]

01:20:48   can't ask every consumer what they want you have to build like the right profit [TS]

01:20:52   the right product and make them want it I have always said that it is one of the [TS]

01:20:57   things i think is underestimated is the importance of the exact order of your [TS]

01:21:04   priorities even if you only care as an institution or even a person about three [TS]

01:21:08   things it really makes a difference which ones number one in which ones [TS]

01:21:12   number two they're always going to decision where you have two shoes right [TS]

01:21:16   like all I really care about in life is you know are the same person but you [TS]

01:21:22   know i i still think that their number one priority is creating great products [TS]

01:21:26   and great experiences for the users and maybe number two is doing it [TS]

01:21:33   a profit because the Prophet sustained everything and you know but it makes a [TS]

01:21:38   huge difference that one is in front of two and all sorts of things fallout from [TS]

01:21:43   that especially in the long run it's amazing to see the house it's not that [TS]

01:21:49   Microsoft doesn't care about experience I just don't think that they place it [TS]

01:21:53   quite as high on the priority list institutionally as Apple and then [TS]

01:21:56   there's in the long run there's been profound differences because of that [TS]

01:22:00   when is different there's different kinds of experiences right to satisfy a [TS]

01:22:04   business's needs are you often prioritize things other than like the [TS]

01:22:12   the end user experience of actually using the product right it's because the [TS]

01:22:17   buyer is different than the user and so you prioritize what the buyer values and [TS]

01:22:24   yes I think that's the real kind of big difference between the consumer market [TS]

01:22:29   and and and the business market is is the end user is the is the buyer and [TS]

01:22:35   that that makes Apple's strategy much more much better Apple priorities a much [TS]

01:22:42   better match for the consumer market [TS]

01:22:45   here's another example I'll give you an example that i think is very clear and [TS]

01:22:49   that this this month's Android wear watches show Google and OM's like LG and [TS]

01:23:01   Samsung plays a much higher well maybe not much different but they place a [TS]

01:23:06   higher priority on being first to market then Apple does no doubt in my mind [TS]

01:23:12   began its watches to me are proof of it [TS]

01:23:15   that they're clearly rush to their clunky there's a lot of you read the [TS]

01:23:20   reviews there's a lot of things that just are half-baked you know Joanna [TS]

01:23:25   stern added my favorite review them in the wall street journal I guess it was [TS]

01:23:29   last week but great review but right now [TS]

01:23:33   notifications are all or nothing you either say all of your notifications [TS]

01:23:37   from your phone go to your watch or none of them do this on a nap I a basis so [TS]

01:23:42   it's like you that if you wanna notifications for incoming email on your [TS]

01:23:45   phone then every time you get an email your risk is gonna bus which is [TS]

01:23:48   maddening at least for some people [TS]

01:23:50   Joanna and it is for me they've tried it with the people but you might want [TS]

01:23:55   something like looked just these two people my wife and my boss you know when [TS]

01:24:01   a mommy I want or like an apple turns the VIP list right if just a few there's [TS]

01:24:06   nothing like that of course it's going to come eventually but that just seems [TS]

01:24:10   like a would you buy that and then even better example the Moto 360 which is to [TS]

01:24:16   me it's the most controversial product I can remember in years because I so many [TS]

01:24:23   people on the Android side are saying it now here is a beautiful thing and it's a [TS]

01:24:27   no it's not but it is not a beautiful thing it's it is better looking than the [TS]

01:24:34   other two clunkers so far from LG and Samsung that's for sure but is not a [TS]

01:24:39   beautiful thing it and and that stupid bar at the bottom of the screen [TS]

01:24:44   awful it's awful Apple wooden ship that in a million years and the only reason [TS]

01:24:48   Motorola shipping is because its rush to market everything's relative right right [TS]

01:24:53   yeah we compared to the LG my watch it's clearly Motorola the designers in the [TS]

01:24:59   team that built that motor 360 place a higher priority on design than than the [TS]

01:25:04   LG and [TS]

01:25:06   and Samsung who made their watches and even if they if they value designs much [TS]

01:25:11   as Apple they also have this higher priority of wanting to ship it as soon [TS]

01:25:16   as possible [TS]

01:25:16   clearly I guess in anticipation of a book coming out with something shipping [TS]

01:25:20   it before Apple does and so they were willing to compromise and ship this [TS]

01:25:23   thing with a black bar at the bottom of the circle which is ridiculous [TS]

01:25:26   so here's here's what's interesting is you know the cause the counter a deal [TS]

01:25:30   that's ok we're going to enter 81 for the market but in the meantime charging [TS]

01:25:34   people $225 for these things it's not just that though because think about it [TS]

01:25:39   if you if you're actually you realize that you only want notification for 122 [TS]

01:25:45   people do they need a screen that's a good question let's come back to them we [TS]

01:25:53   thank our third sponsor animals do one more segment on the show start with with [TS]

01:25:57   that with the watches and I think I know their longtime friend of the show our [TS]

01:26:03   good friends at igloo internet you'll actually liked listening to ATP podcast [TS]

01:26:11   this week and I'm just gonna steal the line from Marco which is always a good [TS]

01:26:16   if you if there's ever anything in your life that annoying it's a great idea for [TS]

01:26:20   new products in general if you can find something we're all of your options are [TS]

01:26:23   annoying and you can think of a way to build a version that's not annoying and [TS]

01:26:27   doesn't suck that's generally a good idea that's what it was done with [TS]

01:26:30   internet intranets suck so he has attacked the problem and built an [TS]

01:26:36   internet product that doesn't suck they have a new update that's coming soon [TS]

01:26:43   we've talked about it on the show before it's called unicorn and has a ton of new [TS]

01:26:46   features but the best part of it is integrated task management that will [TS]

01:26:51   change the way you stay on track with work include tasks can be assigned in [TS]

01:26:56   different ways depending on the work you're doing one of the coolest ways to [TS]

01:27:00   use tasks is creating them directly on your content [TS]

01:27:03   why do you need this while you're requesting update sonographic or text [TS]

01:27:07   correction on a word document [TS]

01:27:09   you can create these tasks right on your content see your team can stay up to [TS]

01:27:13   date with what has to be done next to update the graphic or edit the text when [TS]

01:27:18   you're viewing content even if it's a blog entry [TS]

01:27:21   an event forum topic inside your igloo these tasks are all right there [TS]

01:27:26   informing everyone of all the tasks that have been completed and what needs [TS]

01:27:30   additional work you can assign tasks to yourself to teammates you can comment on [TS]

01:27:34   the tasks and you can keep all the changes from one place huge feature I [TS]

01:27:39   think this is obviously turned into more than just an internet it's more of a [TS]

01:27:43   project management platform for your small teams really great stuff it's a [TS]

01:27:49   free update for all include customers it's coming this summer you can learn [TS]

01:27:54   more about it here is where you go [TS]

01:27:56   igloo software dot com slash the talk show they are also a great stuff to [TS]

01:28:02   throw this out there it's free for up to 10 people not free for like a month just [TS]

01:28:07   free period for up to 10 people no obligation so if you have a team of [TS]

01:28:13   people working together did go check amount includes software dot com slash [TS]

01:28:18   the talk show great point I think bottom line is I i think you're you're saying [TS]

01:28:26   about do need only one occasion for two people do you need a screen on your rest [TS]

01:28:30   I to me the answer is no I don't think so just do before we actually get into [TS]

01:28:36   that and I'd actually what your take is as well as we've established back and [TS]

01:28:40   forth your products and says what's better than mine but with interesting [TS]

01:28:44   though is about these guys rushing to market is they can say that we're just [TS]

01:28:49   waiting but now they're walked into this paradigm right if it turns out that you [TS]

01:28:55   know the best sort of secondary device needs only to be screen was for example [TS]

01:29:01   like now there are like no other guy like they've set up a dead end [TS]

01:29:06   not now it's not just that they need to backtrack in like three you know they [TS]

01:29:12   actually put themselves more behind than they might have been otherwise so that [TS]

01:29:17   knew that that's what makes something like that particularly interesting if [TS]

01:29:20   they actually were pretty we're pursuing their own paradigm to start out with I [TS]

01:29:23   must say I don't know but I can't help but think that they are and you know [TS]

01:29:27   join us turned reviewed just went is explicitly called it you know what I [TS]

01:29:31   think it looks like is they've taken modern smartphones and trunk them to two [TS]

01:29:36   inches and put them on a wrist band and they gonna rest and we saw that works [TS]

01:29:40   with mobile right that's what Microsoft added taking it taking this conversation [TS]

01:29:44   full-circle they try they literally had a start button in the lower left right [TS]

01:29:50   left right and I think they might have had on the upper left justice to its up [TS]

01:29:56   with the same thing that you tap [TS]

01:29:56   with the same thing that you tap [TS]

01:30:00   start button and get a start menu and and go from there right in the eye [TS]

01:30:04   I really do think they're like their mobile shortcomings were first and [TS]

01:30:07   foremost because they just made a bad product they made a bad product because [TS]

01:30:11   they couldn't break out of the stop thinking and to me this is by far the [TS]

01:30:17   biggest criticism of Andhra and right where I have a few criticisms but the [TS]

01:30:20   biggest one is it's it's Windows Mobile 2.0 it's taking a smartphone and [TS]

01:30:26   cramming it onto your wrist and I i anytime you shifting the paradigm [TS]

01:30:32   shifting a device like I think we take histories and isn't that old by then we [TS]

01:30:38   can say pretty confidently that you have to change everything and they haven't [TS]

01:30:43   done that and yeah i'm for that reason alone plus some other reasons I'm very [TS]

01:30:49   skeptical you know and I've gotten some emails and I love them I do and I know [TS]

01:30:54   that my audience that the jersey just human nature as such and modern media is [TS]

01:31:00   such that whether it's really like national politics or whether it's [TS]

01:31:03   stacked that people tend to enjoy reading things that come from the people [TS]

01:31:08   who already think the way they think but I do I love the people who are like Big [TS]

01:31:13   and Rich Ansari daring fireball I like as their feedback to me I seldom change [TS]

01:31:19   my mind but I always consider it and it's you know to me it's a great [TS]

01:31:23   perspective and I've already gotten some emails from people you know and have you [TS]

01:31:28   know one of these wear watches already and they say that they like you know [TS]

01:31:33   I've ever gotten from people who tell me that glass is actually what are you [TS]

01:31:42   talking about relativity and basically you know as saying you know what I think [TS]

01:31:48   it's great i love having my notification right I just don't think it's I don't [TS]

01:31:55   dispute that there are some number of people who do like getting notifications [TS]

01:31:59   on your wrist and just looking at [TS]

01:32:01   and my big thing with the pebble that I just thought was the deal-breaker was [TS]

01:32:06   that ok I tried borne the battle and and God bless ml of their their you know [TS]

01:32:12   their gumption but you get a notification if it was something you had [TS]

01:32:17   to act on their you had to take your phone out right so it's you know the one [TS]

01:32:22   time I was wearing a couple at one time I work for a couple weeks that it was [TS]

01:32:27   actually useful as I was driving my car and going to pick up my son at school [TS]

01:32:32   and I got a text from my wife I forget what it was said but it was something I [TS]

01:32:36   it was actually useful for me to get the text but I needed to text back so I had [TS]

01:32:41   to and I do this I am literally a microphone at about I will not use my [TS]

01:32:46   phone while driving car I had to like pull over and you know park the car for [TS]

01:32:51   a second and texture it wasn't that much better than just feeling the phone [TS]

01:32:56   vibrate and you know waiting until I got to the school and take the phone and see [TS]

01:33:00   the text you know it wasn't an emergency it was not an emergency that was just [TS]

01:33:04   about had a Razorback the thing that we're has is they have the talk so that [TS]

01:33:09   if you do get a text in your hands are free you can you can speak your reply to [TS]

01:33:14   the so there is that and that's a huge step over people but to me it it is not [TS]

01:33:20   an inconvenience to me it's never felt like a burden to me to take my phone out [TS]

01:33:24   when I feel well I mean I think they've solved a problem that I don't think many [TS]

01:33:31   people have and i cant how many people have told me over the years all this [TS]

01:33:34   time that watches have been rumored as the next area of innovation a text I [TS]

01:33:38   can't even count the number of emails and tweets from people who say I used to [TS]

01:33:43   wear a watch we're watching I was in college whatever have a long watch since [TS]

01:33:48   I started carrying a cell phone I want to know the time I just take my phone [TS]

01:33:51   out so it was interesting is is i do think where it makes a big difference [TS]

01:33:55   actually for women especially if they carry their phone in their bags like my [TS]

01:33:59   own I mean just that's a very good point that it's it's harder to find [TS]

01:34:05   a phone in a bag than it is to find a phone in your front pocket and actually [TS]

01:34:09   in Asia most men carry bags as well that's another reason why the bigger [TS]

01:34:14   phones are our thing and so we've they've made these watches that are so [TS]

01:34:19   appealing to women with that the flight is like actually probably the best [TS]

01:34:24   market is women and these are ya like the listeners have to watch the video [TS]

01:34:31   right like I put it and she will give it away just it's it's it's it's really [TS]

01:34:37   great [TS]

01:34:37   addresses that points but anyway the one thing that watches have been best that [TS]

01:34:43   ever since when they were invented is telling time that's the one thing [TS]

01:34:47   everybody I think would agree is the one thing that you know the definition of a [TS]

01:34:51   watch everything else every other complications watches isn't a secondary [TS]

01:34:55   feature primary purpose is to find out what time it is and I think most people [TS]

01:35:02   the phone has proven to be a good enough solution and that you know I can't tell [TS]

01:35:09   you how many people have told me that the one thing want to specialize in [TS]

01:35:11   people like I always have my cell phone in my pocket I don't we're watching let [TS]

01:35:16   alone let alone everything else like people who might be texting you pictures [TS]

01:35:21   and longer texts and you know even on screen shots you know I don't know [TS]

01:35:27   there's just so many so many bizarre compromises in the design of this where [TS]

01:35:31   and pebbles the same way where it shows so few characters because you know it's [TS]

01:35:36   a tiny little you know one point six inch display and you can't just can't [TS]

01:35:41   show even like a text message is hard to fit on and want yeah yeah this is like [TS]

01:35:46   there's one thing watches are better at and even then people are going to wear [TS]

01:35:49   them how they wear them for something that is worth that and it's you know and [TS]

01:35:55   and again repeating myself everybody's made this point but it's also very [TS]

01:35:58   decidedly a generational thing you know younger you are the less like you [TS]

01:36:06   and less like you are to have ever wanna watch and therefore why would I do that [TS]

01:36:10   why would I buy a thing that just tells me the time I always know the time I got [TS]

01:36:13   my phone so i i i increasingly feel again I don't have a great products and [TS]

01:36:19   just kind of thinking through this stuff the rule is one I think there's going to [TS]

01:36:26   be a range I don't think there is a watch or enright what's there's a whole [TS]

01:36:31   bunch of devices there might be rings are right be watches it might be clips [TS]

01:36:35   there might be what you do with it might be like 10 different things and to I [TS]

01:36:40   think most of them won't have screens maybe there will be one or two that do [TS]

01:36:45   but I don't know I did especially screens as we know them which are [TS]

01:36:52   enormous energy hogs in which is the reason why you're here watch faster or [TS]

01:36:56   Android where watch has to be charged daley and I know I think I said this [TS]

01:37:02   last week when I was on the show but I just think people are I think so many [TS]

01:37:05   tech people are vastly vastly overestimating what an enormous burden [TS]

01:37:12   is to carry even a single device that needs charging daley and we've all made [TS]

01:37:16   this decision we all have to sit cited that having these modern cell phones is [TS]

01:37:21   important enough to do it but it's an enormous burden and every time you go to [TS]

01:37:26   the airport and you see people sitting grown men in suits sitting on the floor [TS]

01:37:30   so they can be in your pocket that's for one device [TS]

01:37:35   asking people to have a second device that you need to charge on a daily basis [TS]

01:37:39   and one which requires a proprietary weirdo charger thing that you have to [TS]

01:37:45   somehow carry around with you is again I'm not saying it's impossible you know [TS]

01:37:52   clearly the cellphone referral if if if it's possible to get everybody to carry [TS]

01:37:57   one device that needs charging daily it's possible to make them have to but [TS]

01:38:01   don't underestimate just how crazy it is that we've convinced everybody to carry [TS]

01:38:05   even one device that needs charging yet I don't think so I makes you just you [TS]

01:38:09   just said it exactly right if that one device can do with that other devices [TS]

01:38:12   yeah exactly [TS]

01:38:13   show notifications later flight [TS]

01:38:16   them like we are convincing even more like I really don't think there's going [TS]

01:38:21   to be a screen because like there's a full one just imagine this is going to [TS]

01:38:27   be like the whole like the iPhone has no buttons the iWatch News screen but I [TS]

01:38:33   think you have to think about it like to think back to the iPod like what what [TS]

01:38:37   made the iPod's soul transformative it was that it removed features from music [TS]

01:38:44   players right there in music players on the market but Haley's Italy things to [TS]

01:38:48   to change controls in his part of it was the thousands on the pocket and and and [TS]

01:38:52   the design but a big part it was items it was that all this complex management [TS]

01:38:58   stuff was removed from the device input on a much more suitable device and and [TS]

01:39:04   they losing it using it felt like going downhill not up right exactly like in [TS]

01:39:08   all it did was was was like what [TS]

01:39:10   only it could do which is play music on the goal and actually managing play with [TS]

01:39:14   all that sort of stuff you did you did on your computer and I ice and overtime [TS]

01:39:20   that change like now my on my phone has never been connected my computer right [TS]

01:39:23   but that took like over a decade rate I think I think watches or these wearables [TS]

01:39:31   are going to start the same way they were their function will be something [TS]

01:39:34   that only they can do that they watch cannot do is probably the sensor stop [TS]

01:39:39   them is going to be I think that I do think there'll be a notification thing [TS]

01:39:42   but it will be the only your favourites to favorites on your phone like those [TS]

01:39:47   will be the only ones people bitch and moan about who it is but but in all the [TS]

01:39:53   other stuff will be on the phone there won't be there will be minimal if any [TS]

01:39:58   duplication between what one does and what the other does and on the flip side [TS]

01:40:02   I think Apple is going to try to make these not tech devices that look good [TS]

01:40:08   but fashion accessories that happen to have electronic functions right you've [TS]

01:40:14   gotta work backwards and it's a paraphrase it but it's a Steve Jobs [TS]

01:40:17   quote that you've got to work backwards from [TS]

01:40:21   the experience what it is you want to do to the technology and not the other way [TS]

01:40:26   around into me these Android where devices are exactly the opposite its [TS]

01:40:31   starting with and and Google even said this explicitly on stage at IO it's now [TS]

01:40:36   possible to build a smartphone like device that fits under arrest [TS]

01:40:41   true that that wasn't possible before that it's it's you know great increases [TS]

01:40:47   in miniaturization rate increases in you know you know just the ability to power [TS]

01:40:53   the power this little tiny screens even for a day does require new technology [TS]

01:40:58   and Bluetooth LTE is new technology so that you can actually maintain a [TS]

01:41:02   tethered connection even if no one day's battery life is crappy I think for a [TS]

01:41:06   watch but it says something that you can keep a Bluetooth and all the reviews [TS]

01:41:11   indicate that you do get a full day out of the thing that's new technology but [TS]

01:41:15   it's all working backwards from we can do this so led to do it and here it is [TS]

01:41:19   dead of starting with what would actually be a good experience for thing [TS]

01:41:23   you were arrested what would look good [TS]

01:41:25   know exactly how do I i have one more question for you [TS]

01:41:30   ok I'm actually curious your take on so much that's why we didn't tell my big [TS]

01:41:34   reason that I wear and where I'm I don't think the guy I think it's it's it's a [TS]

01:41:40   missed everything is Windows Mobile my other question is is what you think [TS]

01:41:45   about Google now I you know I did I think it's I wrote a little thing about [TS]

01:41:54   it when I went to join us [TS]

01:41:57   turns review today they do you think that's where there's the most potential [TS]

01:42:02   and Android wearables is that Google to me I think has best of breed speech [TS]

01:42:14   understanding speaking oil it works [TS]

01:42:17   everything and I think syria has gotten better I really do I use it all the time [TS]

01:42:22   walking away walking around the city while texting on to use the speech and [TS]

01:42:26   and i'd [TS]

01:42:26   serious the umbrella term not Siri the intelligent agent but Siri the [TS]

01:42:31   hit the microphone next to the space bar dictator text it's gotten better got [TS]

01:42:36   more accurate and it has gotten the latency is improved and it works better [TS]

01:42:39   over cellular but it still is not as good as Google's and that's because I [TS]

01:42:43   think Google's is isn't standing still on that either right [TS]

01:42:46   best of breed Google's beds best of breed for speaking to a device and [TS]

01:42:50   understanding it quickly and I think there's a lot of potential there for [TS]

01:42:54   wearables but then my problem is I don't buy into the let Google know everything [TS]

01:42:59   about me I don't use Google Calendar I don't want cool I don't want to go [TS]

01:43:03   knowing my location I'm genuinely creeped out by all that well what if you [TS]

01:43:07   weren't creeped out though like to think that something that you would find [TS]

01:43:10   useful [TS]

01:43:12   the reason the reason I ask is is to me I feel this is a there's a really [TS]

01:43:18   interesting interview with Vinod Khosla Ventures and and weary Page and Sergey [TS]

01:43:25   Brin earlier this week and and they talked about this a bit and I feel [TS]

01:43:31   they're just a fundamentally different view of computing between Google and [TS]

01:43:36   Apple and it really is personified right now boarded by Syrian forces school now [TS]

01:43:42   yeah I think that's a good point and I think I know you're going that and part [TS]

01:43:45   of it is I've been reading these reviews of the the where devices and a lot of [TS]

01:43:49   what you see on them isn't what you've asked for it what Google thinks you [TS]

01:43:52   wanna see right through you don't you don't say show me my flight it is it [TS]

01:43:58   you've put your flight your calendar and at a certain point google says hey [TS]

01:44:02   you've got you've gotta 1 p.m. flight and it's 10:30 in the morning and it's [TS]

01:44:06   going to take you at least 45 minutes to get there and and it it comes up you [TS]

01:44:11   didn't ask for it doesn't end and I've seen a couple of reviews mention weather [TS]

01:44:14   is like that like you'll get like a weather thing and one should dismiss it [TS]

01:44:18   you can't make a comeback [TS]

01:44:19   there's no way to say show me that whether card I just dismissed they they [TS]

01:44:22   show you the weather when they think you know want to know about the weather and [TS]

01:44:26   that I think I would find that man well yeah but you know exactly it it's it's [TS]

01:44:32   they their view is anticipating your needs and like taking care of them for [TS]

01:44:38   you and it's it really is a very paid said like this [TS]

01:44:44   why the I'm feeling lucky but was there I'm feeling lucky is what Google thats [TS]

01:44:49   Google's ideal vision of Google search is that actually everyone always can hit [TS]

01:44:53   I feel lucky because it will always serve exactly the right result and but [TS]

01:44:58   their vision now is even past that it's like you don't even have to type [TS]

01:45:01   something in the box like they will know what you want in and give it to you and [TS]

01:45:05   it's like it really is no benefit to having earlier posted a tweet during low [TS]

01:45:13   of saying Google he post a picture of the scene from Wally where the fat [TS]

01:45:19   people are bad and sitting in chairs an alternate on there being a dress that go [TS]

01:45:22   Google and Apple are racing here in and I wrote a piece I might actually I think [TS]

01:45:27   Google is going there but I think Apple is very explicitly not going there and [TS]

01:45:34   it goes back to you know Steve Jobs saying the computer is a bicycle ride a [TS]

01:45:38   bicycle is still subject to a human's direction in humans proportion it's just [TS]

01:45:45   it just enhances that it's not it's not a self-driving cars like taking you [TS]

01:45:51   where you want to go and and you see that was serious serious doesn't [TS]

01:45:55   anticipate your needs it only responds to questions and I don't think that's a [TS]

01:46:00   technical limitation I think it's a philosophical one and and to me I think [TS]

01:46:05   that something that you know is very is really a question who's going on the [TS]

01:46:09   future because if if Google's right they will in the future because they're so [TS]

01:46:14   far ahead of everyone but if if if it's if computers stay a tool then apple and [TS]

01:46:23   they're they're using user experience on sort of stuff will continue to [TS]

01:46:28   differentiate them and maybe it's not either-or either you know maybe it's you [TS]

01:46:33   know bifurcation and you know 11 group of depending on your personality is [TS]

01:46:40   drawn to one side and once drawn to another and it comes back to I think [TS]

01:46:44   what Benedict haven't had written this week about that ever since 2007 iOS and [TS]

01:46:52   Android have been converging and they've been [TS]

01:46:54   China picking up the same for you know Google picked up drag drag from the top [TS]

01:46:59   for notifications first and then Andrew picked it up and Android picked up a [TS]

01:47:04   whole bunch of features that I was way ahead of them on you know when I but [TS]

01:47:08   then eventually they picked up both of them got all the low-hanging fruit and [TS]

01:47:11   with this year's iOS aid and Andrea del announcements now you're seeing them go [TS]

01:47:16   in different directions and I think you're you're talking about the same [TS]

01:47:18   sort of thing i think is you know and I you know maybe they're both sustainable [TS]

01:47:24   maybe it's not you know but that they appealed a very different people I don't [TS]

01:47:27   know I think one of the most telling things I i've read about Android where [TS]

01:47:31   I'm reading about it but it was ron Amedeo those review and Ars Technica [TS]

01:47:37   Android we're just the software which when I first started reading it I [TS]

01:47:43   thought I expected to roll my eyes because I thought it was weird idea to [TS]

01:47:49   review the software in the abstract as opposed to the actual experience of the [TS]

01:47:55   watches on the actual devices but to their credit cards did have reviews of [TS]

01:48:02   the watches but and ron's review of just and right where was interesting because [TS]

01:48:07   it just sort of focus on the philosophy of it and he emphasized these things [TS]

01:48:11   that a lot of what you see on it is what Google thinks you want to see and that [TS]

01:48:16   you know and he mentioned specifically with the weather that it was frustrating [TS]

01:48:19   they couldn't just bring it back up and that to me would be maddening but I [TS]

01:48:24   think it's also very telling about the philosophy behind it [TS]

01:48:29   no no I think you're exactly right that it is Philip philosophical differences [TS]

01:48:35   is that exactly and I saw the whole thing but I saw the interview with [TS]

01:48:41   that up to the interview with Sir J and yeah I think that the gist of it was [TS]

01:48:48   that he was saying that eventually the algorithms gonna be smarter than us [TS]

01:48:50   right I mean it really it's interesting to i think this is this is part of the [TS]

01:48:55   thing why Google you know is tends to have a toehold on kind of geeks in [TS]

01:49:02   general is like this always kind of been been a very geeky domain [TS]

01:49:07   kids aren't afraid of AI they're not afraid of robots rape like they're [TS]

01:49:11   they're intrigued by them they're drawn to them like moths to a flame right and [TS]

01:49:16   Google has always been very much in that sort of vibe and but what's really [TS]

01:49:21   interesting is gonna be you see it starting to play out now even more ease [TS]

01:49:26   as tech has spent the last twenty thirty years ed itself right we've disrupted [TS]

01:49:31   other and all that sort of stuff but now as it's touching every part of society [TS]

01:49:35   you're getting like people who don't think about this [TS]

01:49:39   who who really do see computers as tools right there they help them get stuff [TS]

01:49:43   done the other encountering this our house at like Facebook and and and the [TS]

01:49:48   testing all that which in most cases they be testing but to what the hell's [TS]

01:49:53   going on here right and I think it's gonna be really intrigued to see as this [TS]

01:49:58   kind of coalition happens with society as a whole and they start waking up to [TS]

01:50:02   like to this kind of like what what is almost were used to I suspect that [TS]

01:50:10   actually that I i think is going to play out more in the computers as tools and [TS]

01:50:16   get some most people view them in want them to operate but maybe Google's right [TS]

01:50:21   and people do want you know personal assistants algorithms can deliver [TS]

01:50:28   satisfying superior yeah our superior right now and it's not even knew it on [TS]

01:50:35   it's certainly not a new direction for Google its its new terrain in the same [TS]

01:50:40   direction you know like Google News that's the whole point between Google [TS]

01:50:44   News that you could which you know that project product for them anymore but the [TS]

01:50:49   basic idea behind it [TS]

01:50:51   that Google could algorithmically predict the most important news and news [TS]

01:50:56   I guess personalize the most appealing to you as opposed to the editors of The [TS]

01:51:01   New York Times or you know the varied for technology or whatever what's so [TS]

01:51:09   interesting though is his Google big product still is today [TS]

01:51:12   search and search is actually much more if we're going to call this device like [TS]

01:51:17   an apple the Apple side of things like you it's directed you go there and you [TS]

01:51:23   put in a word and you click the button press one Google product that Steve Jobs [TS]

01:51:28   adamantly said is a great product [TS]

01:51:30   exactly and it's and it's funny because while Google is pushing for is is [TS]

01:51:36   actually different than what they're big successful product is yeah yeah that's a [TS]

01:51:42   great point I agree with that [TS]

01:51:43   briefly cuz I wanna go past the two hour mark but there was one last thing I [TS]

01:51:47   wanted to speak to you about well as you know that if I didn't is that just [TS]

01:51:54   yesterday broke that Apple has hired yet take your yea yea Sales Director sales [TS]

01:52:04   executive from TAG Heuer of high-end luxury watch brand which is part of an [TS]

01:52:11   independent brain it's part of LBM LBM ages louisvuitton what they made it down [TS]

01:52:17   wrong things like this [TS]

01:52:22   well it's a free everything alright so anyway French conglomerate that owns [TS]

01:52:28   louisvuitton Tennessee you know it's true conglomerate as part of their [TS]

01:52:34   rights so you know I think it's fair to say that any company that owns for us [TS]

01:52:41   both louisvuitton and the champagne and cognac brand but obviously there is a [TS]

01:52:49   certain you know luxury quality branding [TS]

01:52:57   they've hired a sales executive and that joins who came from Yves Saint Laurent [TS]

01:53:04   and most famously in July Lawrence and said that I will include dr dre Anna [TS]

01:53:16   group in and that's all I said last night and I realize luxuries the wrong [TS]

01:53:24   word answers this is clarifying [TS]

01:53:27   added that I including of island Dr Dre because I don't think but I don't think [TS]

01:53:33   luxuries the right word to explain these hires it's about some kind of like [TS]

01:53:37   circling around taste style branding brand though it's a luxury brand right [TS]

01:53:46   well and then I said here's where I think when people say I'm worried about [TS]

01:53:49   this I'm worried about the direction Apple's going is about this the iPhone [TS]

01:53:53   is nothing like Burke 23 by like a $6,000 Symbian phone calls on it [TS]

01:54:01   impeaches like virtue either right because I never see people walking down [TS]

01:54:05   the street with her two phones but every single day in Philadelphia I see people [TS]

01:54:09   were especially a note on my tensions and apple bottom I see him every day I [TS]

01:54:14   see people wearing beat every single day in philadelphia and Bertuzzi its beaches [TS]

01:54:20   like an apple luxury brand where it's accessible luxury and depending on your [TS]

01:54:25   taste in music you know it's as good of I don't get ready like that sound right [TS]

01:54:34   I know it's not technically accurate right it's you know you know but most [TS]

01:54:41   people don't feel like they're sacrificing her to you're sacrificing [TS]

01:54:44   right exactly yeah and don't you think you know and quality you know and it's [TS]

01:54:53   certain scent I heard you know somebody told me for example this is this is it I [TS]

01:54:57   don't know a lot of really didn't know about that one guy wrote me and said you [TS]

01:55:02   know i buy Beats headphones [TS]

01:55:03   the amazing return policy and it takes care of you like he said i buy a pair [TS]

01:55:08   beat cost me 300 bucks and like nine months later they broke I took them back [TS]

01:55:12   and they just took him in game in new parent no questions asked and you don't [TS]

01:55:17   get that from other companies yeah people happy in building a relationship [TS]

01:55:21   I don't know I don't know a ton about you know specifically what what what [TS]

01:55:27   strikes me about these more interest in nineteen your take on beat but just [TS]

01:55:32   under one or two could be an outlier but it seems to be a trend yeah I mean to me [TS]

01:55:38   that that suggests one that the wearable thing is multiple things to that they're [TS]

01:55:46   they're focused on fashion first night you know I miss that word fashions an [TS]

01:55:50   important word I think but three I thought I was most of this guy was the [TS]

01:55:55   Sales Director yet because that's a that's a completely different kettle of [TS]

01:55:59   fish then then retail which they already do or or the CBO which you could [TS]

01:56:05   certainly see him time or into the product side of things but this guy is [TS]

01:56:09   not doing product is not actually making the things he's telling me has [TS]

01:56:13   connections with the Department these Asian department stores that sell [TS]

01:56:18   products or with you know the the duty free shops in like over here that i'm [TS]

01:56:27   not really more about like that that sell that have a way back this that's el [TS]

01:56:31   nino champagne at sell all the perfumes I think they're sort of stuff that's [TS]

01:56:39   super interesting because it's just that it's not that Apple's new product that I [TS]

01:56:42   bought a new channel new distribution strategy and I would suspect that [TS]

01:56:47   Aaron's would have a very a lot to say about that as well because burglary out [TS]

01:56:53   what yes they are in the same places like malls and stuff like that like the [TS]

01:57:00   there's there's not a burglary in your typical suburban mall there is a [TS]

01:57:05   burglary in like the you know the ongoing airport or like the type of 11 [TS]

01:57:10   building like which is like these super high-end [TS]

01:57:13   and shopping destinations like The Shops at Caesars right in the middle of the [TS]

01:57:20   best intersection that this trip right [TS]

01:57:23   Apple does do that internationally with their stores like so with this is [TS]

01:57:28   reassuring to that that makes the airport and I i wanted to get this it's [TS]

01:57:33   like it differs by region right the way Apple presents itself in the USA is [TS]

01:57:40   different than they're they're presented in like china for example where it's [TS]

01:57:44   much more of a luxury good in their stores are next to its next to the [TS]

01:57:48   louboutin store where is the USA its famously there always next victoria [TS]

01:57:52   secret it's just a different it's a different presentation and but they also [TS]

01:57:59   have for example a true flagship destination store on Fifth Avenue in New [TS]

01:58:06   over sure yet but they do both right that they're right there on fifth avenue [TS]

01:58:10   for the true flagship you know almost almost sickening how do you know when [TS]

01:58:16   you see how many people take pictures in front of the other landmarks in new york [TS]

01:58:20   but you know the same time there at the Birmingham all in new hampshire know [TS]

01:58:27   that in so that that's the thing is like the Apple iPhone because the that that [TS]

01:58:34   would hurt their that would hurt their brand in other parts of the world even [TS]

01:58:38   if and and so it's it's super interesting the time the sales guy [TS]

01:58:44   because that's why they also makes me think that you're not going to get into [TS]

01:58:48   these stores selling a a SmartWatch that looks good in these stores by selling a [TS]

01:58:55   desirable object that also has this functionality and that's when I don't [TS]

01:59:04   see there being a bookie screen on a charger with it I think I see it being [TS]

01:59:08   something that's very a range of things super interesting correct myself [TS]

01:59:16   Rockingham Rockingham Park that's raised to go to the Apple store [TS]

01:59:20   it's great that we know more about like suburban malls they do that needs a [TS]

01:59:24   luxury goods company yeah I told him and and like I said I i said i stand by this [TS]

01:59:32   i really dunno more weeks since I wrote it I really do think that it has to [TS]

01:59:39   start with a design that before you even see what it does when you hold that up [TS]

01:59:43   by that has two and I know that that sounds there there's a certain logical [TS]

01:59:52   minded engineering mindset out there you know and I think you know sort of people [TS]

01:59:57   who might be drawn more towards the things he thinks that's that's crazy why [TS]

02:00:03   in the world would you why would that matter you know its function first-rate [TS]

02:00:07   and I'm telling you that for me and I think for the mass market you've gotta [TS]

02:00:11   start with something where you just hold it up before you turn it on people say [TS]

02:00:15   all I want that you know I hate to say it I think the iPhone was like that and [TS]

02:00:20   I think the most amazing thing about the iPhone was what the software did and how [TS]

02:00:24   the screen but I think you know they could have just held that up and not [TS]

02:00:28   even turn the screen on and say here's the iPhone and people would have been [TS]

02:00:31   like where do I get so it's interesting is this takes it full circle right [TS]

02:00:34   because we just talked with beginning where the hardware actually wasn't [TS]

02:00:38   Apple's most important thing it was the software but in a lot of ways for a new [TS]

02:00:42   category [TS]

02:00:43   it is a hardware that gets you in the door yeah and then people and now in now [TS]

02:00:48   there's they're stuck on the software they are not going anywhere right yeah [TS]

02:00:52   it's you know it's never never you know there's there's certain areas where the [TS]

02:00:55   summer is more important in certain areas where the hardware is more [TS]

02:00:58   important but it never never you're always in trouble if you start saying [TS]

02:01:01   that Apple is either a hardware company that does offer a well or software [TS]

02:01:06   company that does hardware well it's it's you gotta see it as a virtuous [TS]

02:01:10   cycle that there you know neither is more important than the other they just [TS]

02:01:14   had there's certain aspects of the product cycle world one is more [TS]

02:01:16   important than other alright let's call it a show Ben Thompson thank you [TS]

02:01:22   where can people find more people who want more Ben Thompson can go to its a [TS]

02:01:26   there's protect hurry [TS]

02:01:27   Str [TS]

02:01:29   a Dec eight er wired.com just google Ben Thompson book itself people always give [TS]

02:01:36   me a hard time because my websites like official name is Ben Thompson both the [TS]

02:01:42   name of Ben Thompson yeah I don't blame you one bit [TS]

02:01:47   there's the exponent podcast listening to very good that's an exponent . FMX [TS]

02:01:54   I just did that by memory yet not like I think I don't know if that's where I got [TS]

02:02:01   it from was the whole yeah yeah I think it's great yeah yeah get stolen [TS]

02:02:06   memorable it's easy to get needs to cost like 80 bucks a year right which is high [TS]

02:02:10   enough that people are squad on it right but not where ya it's funny you get to [TS]

02:02:15   be an adult and you have a box here and it's actually a good thing whereas I [TS]

02:02:21   remember to register domain names in it was $15 a year I just registered on [TS]

02:02:27   trade dollars a year it was iight tomatoes that Gandhi yeah and and they [TS]

02:02:35   tell you how much that's terrible it's it's it's it's it's been years right [TS]

02:02:43   I've been carrying demands for like 10 15 years of this adds up [TS]

02:02:48   oh my god said Mike Monteiro was on the show it I can never tell an addict how [TS]

02:02:52   much you get a bar tab that they don't put like a thing at the bottom of your [TS]

02:02:58   bartender tells you like here's what you spend year-to-date right [TS]

02:03:04   distributor does not give your today you know tab be crazy last but not least on [TS]

02:03:13   Twitter excellent Twitter account you are at monk [TS]

02:03:18   ke and PE and TV has been so thank you very much great show this was absolutely [TS]

02:03:26   great I think it was worth it just for thinking of entering where [TS]

02:03:30   as as Windows Mobile 2.0 along to me that just puts finger right in the [TS]

02:03:37   middle of the bottom what I see as being a problem with it anyway thank you good [TS]

02:03:41   to be here [TS]