Tuesday, June 6, 2017

WWDC | Lefsetz Letter

Apple – World Wide Developer Conference – June 2017

You’re either a member of the ecosystem or you’re not. Either you own Apple products or you don’t. And if you do…you can bitch all you want, but you’re not about to switch.

This was the best presentation since Tim Cook took over. Now that the audience is burned out, now that these keynotes are seen as de rigueur, they lifted the presentation to a new level yet few cared, there was little advance excitement, a few of the breakthroughs leaked in advance, but still…

AR is a breakthrough. And Home Pod could be a sleeper hit.

So what did we learn today?

It’s not about hardware. Software is key. Yes, they introduced the Home Pod, but if you’re looking for a device to send Apple into the stratosphere it’s probably not gonna come, it’s all about convincing people to join the cult and then giving them so many features they will not switch.

Now what are those features?

Well, the ability to not be tracked online in Safari. You know all those ads that creep you out, you clicked once and you’re haunted for eons? The new browser in the new operating system, High Sierra, eliminates that. Apple is all about privacy, whereas Google is all about the opposite. Do people care? Some do, but I’m not sure it’s enough to make a huge difference. Still, it’s fascinating to watch this all play out. Google is about prediction, do we want to sacrifice our privacy to make our lives easier? Unfortunately, I think so. Then again, Google is the land of failed products. Like Glass, like Home. My main problem with Home…IT CAN’T HEAR ME! Echo has no problem. And the speaker in Home is lousy. If you’re late to the party, you’ve got to be better, and that’s what Home Pod promises, but it’s really late.

So you get a free OS upgrade on all your devices. And this is important. Because less than 10% of users are employing the latest version of Android and over 80% are using the latest version of iOS. Which means… Developers are happier on iOS, that’s where the breakthroughs occur. And since the user base is balkanized with not only operating systems but devices, Android is hampered. But it’s cheap. But it looks like Apple’s strategy of going upmarket and maintaining margins and profits is working. Because it’s not so much like buying a BMW but a Buick. Pay just a bit more and you get no headache. Apple is the Hotel California, you can enter but you can never leave, even if you think you want to, almost no one does.

So, there are new operating systems. Which provide tweaks that most people will never use. We’ve got feature creep, and although many users have now grown up with computers, most are still not power users. They use just a few apps. But that’s ok. If there’s a breakthrough product, it can march to the pinnacle immediately. And that appears to be AR, not VR. In the VR demo the woman with the headset stumbled. Anybody who’s used VR has experienced this. Whereas AR gives you no headache and is super-cool. You’ve got to see the demo… It’s from Wingnut AR and it starts at about 90 minutes into the presentation, fast-forward to it.

And then there were the Mac upgrades. Somehow, Apple finally got religion! After being criticized for years for not upgrading anything but the iPhone, suddenly Apple upgraded EVERYTHING! Kinda pisses me off I missed out on Kaby Lake, having just bought the new MacBook Pro in November, then again, we’ve yet to have capabilities so eye-catching that you need to upgrade immediately. That’s a nineties paradigm. My laptop is just fine. And that was an element of this presentation that was palpable, it was not the first, we’ve seen the trick before, they’ve been doing this for two decades already. Computers are long in the tooth, but we still depend upon them. Politics rules the day, income inequality, hatred of others… Music and tech have forfeited their leadership role. But music and tech are now integrated, you make your tunes on computers and participate on social media, and tech is integrated into our society, there’s no going back.

And there were new iMacs and even an iMac Pro, which we have to wait for until December, WHY?

And Cook was more at ease and barely participated. There were multiple women, but no people of color. Craig Federighi is a natural, and it’s fascinating that everybody involved is an oldster. We keep being told that it’s a youth culture, but except in music, experience counts.

And they didn’t trot out Jony Ive or Jimmy Iovine. We got none of those futuristic phoney-baloney product movies with a voice-over from Oz, and none of that street urchin b.s. about music. But music was featured, primarily with the Home Pod.

Lousy name. Me-too product.

But better than all the rest.

First and foremost, Apple has 27 million Music subscribers. I still think the interface sucks, I don’t know how many are on a free trial, but that shows the power of the Apple brand. If the company were smart, and it’s not, it would convert to Spotify’s freemium model, because that has been shown to work, conversion is high. But still, if the Home Pod works…

Apple Music has got lousy sharing. And who’s gonna send a link to a walled garden? But most people still don’t have home music systems and…

In the nineties, your stereo was a boombox.

In the twenty first century, your stereo was an under $100 two or three-piece system attached to your computer.

All the people bitching about sound quality would love a higher level of reproduction, but Apple’s $349 Home Pod has multiple tweeters and a big woofer and it has Siri integration and it adapts to your room and you can have two for stereo and…

I’m not sure how Sonos is gonna compete. It’s the voice integration I’m worried about, not sound, not the ability to have different music in different rooms, Sonos is a genius product, but today it’s all about ease of use, and that means voice control.

Which is owned by Amazon. And to tell you the truth, the Echo doesn’t sound that bad. But I’m sure the Home Pod will sound better. And $349 is expensive, but not that expensive when you compare it with Sonos product, it’s affordable, then again, Apple failed with its music system when Steve Jobs was still alive. And Apple failed with social networks TWICE! But it’s not like Google, which hired Lyor Cohen and just pissed everybody off. Does anybody subscribe to YouTube Red? YouTube is a bad way to listen to music, listenership on clips is already exceeded on Spotify. But…

Apple hasn’t always been first. It wasn’t the first MP3 jukebox and it wasn’t the first portable music player. But its iterations were so much better than the competition that they won. Can Apple win again?

The iTunes/iPod juggernaut was helped by copy protection, it was a walled garden. But now you can get what Apple is selling elsewhere, from Amazon, from Sonos, from Google. But if Apple’s product is just a bit better, and it appears to be…

Then again, we’ve got to wait until December for Home Pod. When Amazon is already on second generation product. And Amazon has shopping, which Apple does not. And you’re gonna shop with your Echo, if you’re not already. And Amazon is an open system, you can use Spotify, and there was no announcement of Spotify inclusion with Home Pod. But there will be a new Amazon app on Apple TV.

But Apple TV is moribund. As is the Watch, which is losing mainstream developers.

But the Mac… It’s the gold standard. And now it’s up-to-date and cheaper. And the iPhone… It too is the gold standard. So, if they can win with Home Pod.

Apple plays in very few arenas. Is this going to be to their detriment?

Or will they play so well in their own verticals that they’re gonna keep adding to their cult and triumph?

Today it looked like the latter.

P.S. And they gave up on the phoney-baloney closing musical segment. They were not playing to popular culture, they were playing to geeks. And the truth is, we now live in geekdom, it’s the nerds’ world and we just follow their lead.

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