FAQ for that cheap, big, new rumored iPhone

In a column for Unwired View late last year, I predicted that Apple will release a “phablet” in 2013: Apple will release two new iPhones next year. One will be the iPhone 5S. The other will be a much larger device, like the Samsung Galaxy Note or “phablet”. I’m going to go further this time. Here is what I expect from this iPhone phablet: It will be priced at an amazingly low US $499 (unlocked). It will be offered in multiple colors (black, white and red) There will be no Retina Display The base model will have 16gb storage 8MP rear camera, 2MP front-facing camera 4G LTE (and 3G) A5 chip (CPU clock rate of 1GHz) 5.5” screen Why would Apple build this device? Because the market has spoken. The market wants large-display smartphones. As I also wrote in Unwired View last November: Display trumps usability, build quality, ease of use and ecosystem. If the user can hold the device in one hand, they want the biggest screen possible, period. All the usability studies in the world, it seems, can’t change the fact that us mere mortals are drawn to big and bright like moths to a flame. The Samsung Galaxy Note II is on track to sell at least 2 million units every month, probably much more. Asia-centric brands are rushing out large display smartphones, including the Huawei Ascend Mate, with a massive 6.1 screen. Apple won’t let this market go un-served. Is this a wise move on Apple’s part? Will such a “cheap” new iPhone, one with lesser hardware than the iPhone 5, diminish the brand? Will it cannibalize sales of iPhone 5? Of the iPad and iPad Mini? Those are not relevant questions. Apple is the global smartphone wars leader. A large display smartphone is a rational move to grow its user base – and increase its already massive profits. The iPhone is a metaphorical piggy bank for Apple, helping make the company easily the world’s richest, most valuable, most popular. As much as Apple has revolutionized the smartphone market, they cannot always be ahead on every aspect. The iPhone 5 was a reaction to the market’s demand for a larger iPhone. Millions want larger still. More importantly, tens of millions in China and throughout Asia, where “phablets” are extremely popular, aspire to have an Apple Mac or iPad or iPhone. Such a purchase must be within their reach and meet their needs. An iPhone “phablet”, smartly priced, makes this happen. This past week, with Apple’s CEO, Tim Cook, and SVP Worldwide Marketing, Phil Schiller, both in China, rumors abounded that Apple was working on a...

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Apple should kill iPod, create iPod Tricorder and own wearable computing

How much weight have you lost so far this year? It’s been a week – have you gone for a run everyday, as you promised with your new year’s resolutions? Fitness, good health, good habits, these are all part of the annual promises we make. Quit smoking, always take the stairs, watch what we eat. In fact, devices, services, websites and apps that help us in our personal goals are a big business. One that’s certain to get bigger. I think Apple should leap into this industry – and own it. With the iPod. Only, not with the iPod Touch or iPod Shuffle, for example. I think Apple should abandon the traditional iPod line and re-fashion it as a line of personal, wearable devices that promote fitness, good habits, safety and lifelogging. iPod Means Little Today The iPod may have saved Apple. Ten years later, however, the product is of little consequence. The entire iPod line is worth less than 1% of Apple’s value, per industry figures. At Apple’s present market cap of $500 billion, that makes all things iPod worth less than $5 billion. True, that’s a phenomenal valuation for a start-up or small business, but barely a rounding error for the world’s largest tech company. Possibly more importantly, the iPod is rapidly losing its relevance. With so many now owning smartphones, there is very little reason to ever purchase an iPod. Plus, as more people embrace streaming music, a collection of songs on a MP3 player is of little value to users. We are on the cusp of a wearable computer revolution, I believe, and Apple can dominate this budding industry just as it does smartphones and tablets. Who better to design beautiful, affordable, highly functional wearable devices? Who better to design such devices and integrate them with a robust ecosystem of developers, apps and payments? Apple’s “iPod line” of wearable devices can enable users from children to seniors to link important personal and health data to their smartphone, monitor their progress on their iPad, download and analyze their numbers on their Mac. This could be huge for Apple and for users and a renaissance for iPod. Revising the iPod brand There are already numerous apps and devices used to promote good health, fitness, to monitor our heart rate, help us stop smoking, analyze our water. The popular Fitbit bracelet or Jawbone UP, for example, helps users keep track of how much they walked, how well they slept. That information can then be downloaded to their smartphone for analysis and archiving. I think with its design skills, manufacturing prowess, global retail footprint, world-beating interface capabilities – including...

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Google xPhone: An attack on Samsung, not iPhone
Jan02

Google xPhone: An attack on Samsung, not iPhone

Given how many elements Google Android has clearly lifted from iPhone, I am not surprised that Google’s semi-secretive xPhone project has a name so similar to iPhone. But, in fact, the xPhone is more an attack on Google’s own partner, Samsung. First, what is the xPhone? Last week, both Reuters and the Wall Street Journal broke the story – almost certainly deliberately leaked by Google itself – that Google was overseeing a project within its Motorola division to create an “X-Phone”. How is this different than the Nexus phone which Google oversees with a pre-selected partner? The fundamental difference is that with xPhone, Google has complete control over the development, distribution and marketing of this device. Consider that the most recent Nexus smartphone, built cooperatively by Google and LG, received rather middling reviews. Google, once the champion of “open”, clearly is no longer interested in working with a partner that can’t compete against the top smartphone makers in the world, Apple and Samsung. They want to build a smartphone that is at par with iPhone and the Samsung Galaxy. Perhaps they will do even better, leveraging the latest R&D from Motorola, particularly the company’s work with multi-core processors and mobile battery technology. This will certainly be a boon for users. But make no mistake, first and foremost, the xPhone is an attack on Samsung, not Apple, not the iPhone. To date, Android has been a massive cost sink for Google. They spent over $10 billion to acquire Motorola, which continues to bleed money. They have spent untold billions to market Android, develop products and services for Android, and to pay sales and other fees to giant carriers to distribute Android devices. From a business standpoint – and Google is first and foremost a business – Android has been a failure. Google continues to make far more money off iPhone and iPad than from Android or their high-end Nexus line. This cannot continue. The only one making any real money off Android is Samsung. Samsung has become so important to Android, so dominant in fact, that I have even speculated that Samsung will buy the entire Android platform from Google. Since I wrote that late last year, Samsung has become even more dominant within Android. Indeed, if not for Samsung, Google Android sales might collapse. As has been well documented, nearly *all* profits from selling Android handsets flow to Samsung. Samsung sold more than 200 million Android devices in 2012 – four times more than the nearest competitor. Samsung has confidently stated they intend to sell more than 300 million Android devices in 2013. There is an old saying: if...

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An iPhone Christmas! Spending Apple’s $200 billion cash hoard on…
Dec27

An iPhone Christmas! Spending Apple’s $200 billion cash hoard on…

As 2012 draws to a close, Apple, maker of iPhone, iPad and Mac is valued at approximately $500 billion. To some, this is low, given that Apple’s smartphone, tablet, MP3 and laptop business lines are among the most popular, most highly coveted in the world. Undervalued or not, it’s hard to overstate Apple’s size. It is the most highly valued public company, it is within reasonable striking distance of $200 billion in annual revenues – and, possibly most noteworthy of all, its incredible margins have rained down money onto the company. Apple has cash/investments and equivalents on hand of about $130 billion. Expect this to rise to a stunningly high $200 billion in 2013. If cash is king, then Apple ($AAPL) is Emperor of the Known Universe. The market value of Microsoft is just over $200 billion, as is Google. Apple is approaching having as much ‘cash on hand’ as these two tech giants are worth! Which begs the question: how should Apple spend all that money? I know! Let’s play ‘how to spend Apple’s money’! The rules of this game are simple: you have to spend all of Apple’s cash but it must be on something that will improve Apple, somehow. I’ll go first: Apple has initiated a $2.65 quarterly dividend under CEO Tim Cook. They also plan on a three-year, $10 billion stock buyback program. These will barely make a dent in all that cash and I’m not going to suggest something as dull and non-innovative as dividends or stock buybacks. Apple is one of the most innovative companies on the planet. We can put all that cash to far better use. Bonuses Go big, go epic, go legendary on bonuses. Hand out cash to staff in a way that Steve Jobs would never even consider. My suggestion: give out a supplemental $5 billion in bonuses to Apple (non-retail) employees and another $5 billion to Apple Store employees. That’s $10 billion. Talk about creating happy, loyal staff! If we use the $200 billion cash total Apple is expected to have next year – since we can’t spend this money all at once – that leaves us with $190 billion remaining. Fair enough, staff bonuses taken care of, it’s time now to go truly big. Buy Bloomberg Bloomberg is a financial data, news and information behemoth. There are pricey Bloomberg ‘terminals’, Bloomberg publications, databases, television channels, magazines and financial market tools and algorithms. If Apple were to acquire Bloomberg, Apple’s content ecosystem, already the best in the world, will now include the most valuable digital assets there are: critical financial data. More than that, every banker, every financial...

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The Smartphone Wars in 2012: iPhone rises, Android dominates and Windows Phone remains forgotten

Last week, I made my predictions for the “smartphone wars” in 2013. This week, I want to look back. The following are what I consider the most important stories of the smartphone wars in 2012, in order of what I believe is their impact now and into the future of this rapidly growing, evolving industry.  #10 Windows Phone Fail. Only a few short years ago, Windows Mobile was one of the larger smartphone platforms in the world – and many analysts simply assumed Microsoft would dominate “mobile” just as it had come to dominate the desktop. As 2012 comes to a close, Microsoft is working hard just to maintain relevance in the smartphone wars.  While there may be nearly 1.25 billion PCs in the world running Windows, Microsoft’s current smartphone platform, Windows Phone, remains stuck below 5% market share, and long-time partners, such as Dell and HP, are either exiting the smartphone business outright or floundering completely. The market has spoken and the market wants iPhone and Android.  #9 Gone Native. One of the biggest tech success stories of the past decade, Facebook, has spent a great deal of time and money on developing a mobile ‘platform’ based on web “standards”. The strategy failed. In 2012, Facebook embraced the native app for both Android and iPhone.  #8 Blackberry on Life Support. Seems like every week we hear of another corporate enterprise or government agency that is ditching Blackberry in favor of Android and iPhone. Yahoo CEO, Marissa Mayer, famously stated:  “We literally are moving the company from BlackBerrys to smartphones. One of the really important things for Yahoo’s strategy moving forward is mobile.” Once seemingly everywhere, Blackberry’s market share has dropped to 5%. Their new “app phone” friendly Blackberry 10 OS is not even due out till early 2013. While very early reviews look good, it appears to me to be nothing more than the equivalent of a top-of-the-line iPhone or Android – from 2011.  #7 iPhone 5.  Apple bowed to market pressure and went big this year with iPhone 5, all while cleverly ensuring compatibility with most of the billions of apps already in use. iPhone 5 is probably the world’s single most popular smartphone and the driving force behind Apple’s monster profits; profits that dwarf the entire rest of the smartphone industry. For those of you yet to try the iPhone 5, find one and pick it up. You will simply be amazed that this device can do so much, so well, and look so good, yet feel as light as a feather.  #6 One billion plus. I don’t believe the size, scope and impact of the smartphone market can be overstated....

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The Smartphone Wars in 2013: Bold Predictions on iPhone, Android, Nokia and Microsoft
Dec10

The Smartphone Wars in 2013: Bold Predictions on iPhone, Android, Nokia and Microsoft

I cover mobile technology and the “smartphone wars” in large part because of the scope of this multi-trillion-dollar market. But also because of the destructive power of these devices.   Smartphones, for example, are altering social relationships, changing work, impacting how we learn. They are the ‘second screen’ for watching television and have created a generation that doesn’t care at all about radio, nor will ever see the inside of a Blockbuster. The smartphone is profoundly altering retail. Stores can track our movements via the smartphone, they can send us personalized coupons in real-time as we walk down aisles. We can snap a picture of a product, from inside the store, and find out in an instant if we can get it cheaper somewhere else. Already, I use my smartphone to measure my stress, my heart rate, and to track how many miles (or not) I walk each day. It doesn’t work well, yet, but I can take a picture of my food and receive nutritional information of what I am about to eat (or not). In a few years, perhaps we will be able to analyze our blood, or determine on the spot if we have had too much to drink, say, using our smartphone screens. Nearly every industry, every field of endeavor, is being touched by smartphones. They are the new personal computers. The winners of the smartphone wars will therefore not only be wealthy, but have a profound societal impact far beyond their sales numbers. With that in mind, here are my bold predictions for next year for the smartphone wars: Image credit: Athenatechs.com   Google will rename its giant Motorola division Nexus. Google will make numerous promises to the government of China, some public, some secret, that allows them to fully return to China, the world’s largest smartphone market – and a market where Android dominates but Google’s services on Android barely exist. Apple will release two new iPhones next year. One will be the iPhone 5S. The other will be a much larger device, like the Samsung Galaxy Note or “phablet”. Apple haters will love to point out how the “iPhone Note” doesn’t offer “true” multitasking or multiple “windows” – to watch video and text at the same time, for example. They miss the point. Apple’s OS is designed for focused activities, which is far more productive. Realizing it simply cannot continue as an independent company, Nokia will be acquired by Microsoft. Microsoft CEO, Steve Ballmer, will let it be known that Nokia CEO, Stephen Elop, is first in line to replace him when he retires. Across all relevant measures, Apple’s iPad will dominate the...

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I love my Android Phone. Thank you, Apple! (Google fans, why do you hate iPhone so much?)
Dec03

I love my Android Phone. Thank you, Apple! (Google fans, why do you hate iPhone so much?)

Though I prefer iPhone – and Windows Phone – to Android, I understand that some, maybe most, prefer Google’s platform over Apple’s. To each his own. What I cannot understand is why anyone, even the most ardent Android fan, would hate Apple and the iPhone. Let’s be clear: without iPhone there is no Android. Not like it exists today. Without iPhone, Android probably still looks like a cheap knock-off of 2008’s latest Blackberry device. The iPhone was released in June 2007. It launched a revolution in telecommunications, entertainment and personal computing. This is indisputable. Odds are very high that, pre-iPhone, you and everyone you knew used a “mobile” or a “cell phone” – but nothing like today’s mobile personal computer, the smartphone. True, Windows Mobile offered enhanced functionality for the few that owned one, mostly thanks to their employer. There were a few touchscreen devices pre-iPhone, such as the HTC Touch, but they were rare and rarely used.  Post-iPhone, a full touchscreen “app phone” is the standard across the industry and around the world. The iPhone changed everything. If you care about smartphones and the mobile industry, than you owe iPhone your gratitude. Before iPhone, apps were applications, and even then an oddity, rarely used, hardly understood by the masses. Now apps are a multi-billion-dollar industry that is remaking retail, gaming, search, and personal connectivity. Apps have replaced the “desktop” metaphor for human interaction with personal computing and data resources. Thanks to the iPhone we now carry with us these amazing and powerful computing devices that we use for shopping, driving, gaming, watching movies, taking videos, documenting our lives, purchasing goods and services and much much more. You should be thankful! A large part of the Apple ‘hate’ seems to come from this silly notion that Apple is ‘closed’. Closed is great. Apple’s closed ecosystem spawned the global app craze. Apple’s closed ecosystem enabled many companies to generate billions of dollars in wealth. That is still a rarity amongst the entire Android ecosystem. Apple’s closed ecosystem delivers movies and music and content that is safe, secure and usable. There is probably no competing Google Play without Apple’s closed ecosystem. Without Apple selling hundreds of millions of its (closed) devices, Google does not pour billions and billions of dollars into rapidly iterating and building out its Android platform. Being closed enabled Apple to profit, to innovate, and to release revolutionary new products into the market. I love my iPad. Perhaps you have a Nexus 10. Fair enough. But I doubt your Android tablet would even exist without iPhone and then iPad. It’s not like Google is making nay money off...

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The next iPhone needs to be wider. Galaxy S III and Razr Maxx HD is proof enough of that

The next iPhone needs to be wider. I have come to this conclusion after much use and, more importantly, much user observation. The success of giant screen smartphones like Galaxy S III, HTC One X and the appropriately named Razr Maxx HD shows me that people really like huge displays, usability be damned. I have spent a good deal of time watching people pick a smartphone. A majority of buyers reflexively choose the larger screen. This is probably not a surprise. Go to an electronics retailer, for example, and watch customers staring at television sets. The big, bright, color-intense screens always draw the most favorable responses.  Oooh!  Ahhh! The problem with this, of course, is that unlike a television, we carry our smartphones with us, always. A big screen is too bulky. It consumes too much power. Those “over washed” colors quickly become distracting, making games and websites, for example, look not as crisp when viewed up close. Movies can seem stretched. Apps are rarely optimized across this ever-expanding screenscape. Here, I stand with Apple. For optimum use, optimized viewing and a superior experience, the iPhone 5 and its ‘smaller’ 4-inch display is simply better, and much more in line with my actual needs. That’s why I always tell those in the market for a smartphone to not be so easily swayed by a big, bright screen. I have long assumed that they will come to regret their decision in the days, weeks and months of everyday usage. But I was wrong. What I have noticed is that most people – in my experience – are willing to accept all the negatives of a device that is too big, too bulky, and consumes battery power much too quickly because they want – as with televisions – a really big screen. Display trumps usability, build quality, ease of use and ecosystem. If the user can hold the device in one hand, they want the biggest screen possible, period. All the usability studies in the world, it seems, can’t change the fact that us mere mortals are drawn to big and bright like moths to a flame. Understand, I am not asking for Apple to make the iPhone wider for my sake. I have used every top-of-the-line device on every major platform. The iPhone is the best. Actually, I don’t even think it’s a close contest. For ease of use, functionality, integration, media, gaming, build quality, support and the overall value of the ecosystem, iPhone is simply second to none. Ever since the original iPhone launched the “smartphone wars” in 2007, iPhone has led the pack. Everyone else is still playing...

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Is Apple killing software biz with iPhone, iPad and iOS? Part II: The ultimate revenge of Steve Jobs

This is Part II of  “Is Apple killing software biz” feature. Check here for Part I “Show me the money”. Apple’s business model focuses on making a profit on hardware. Surprise – they have more in cash than the entire net worth of Amazon, which makes the rival Kindle tablet line. Despite a recent drop in its stock price, Apple is also worth more than double Google, which makes nothing on hardware. In fact, Google may lose money on Nexus hardware. Their goal, of course, is to make that money back (and much more) in software and ‘soft’ services. To date, this strategy has failed – Android has cost more than it’s generated. Similarly, Apple is worth more than double Microsoft as well. Microsoft licenses its Windows Phone 8 platform and has long made nearly all its money off software. Apple is not just worth more than Microsoft, Apple’s profits are greater as well. If software is eating the world, why isn’t it eating Apple’s profits? Apple continues to grow: iPhone sales are growing, iPad sales are growing. Its competitors, meanwhile, scrounging to make profits elsewhere, have come to the realization that they must become hardware companies! Google dropped $12 billion on Motorola. Amazon makes Kindle. I suspect Amazon will soon make their own smartphone line as well. Microsoft introduced the Surface tablet – hardware that they make. CEO Steve Ballmer has strongly suggested that the company will move further into hardware. In the past ten years, has this once great software company introduced any successful product other than the Xbox, hardware? Is hardware now required to make money in software – at least in consumer markets? Let’s examine recent data points: Google Android is responsible for 72% of last quarter’s smartphone sales – but Google refuses to give us solid numbers on what revenues those 120+ million devices are generating. A reading of their earnings statement suggests any revenues are relatively minor. Android has an install base of 560 million devices. Last month, Google CEO Larry Page said “mobile” (not Android) had an annual run rate (from some unspecified time) of $8 billion. That’s revenues, not profits. If we delude ourselves into thinking that this is a legit number and all of it comes from Android, then Google is generating $14 per device per year. Not bad. Remember, though, that’s revenues, not profits. Apple is generating an estimated $300 – $500 on each new iPhone sold. Clearly, hardware is the better business. Worse for Google, the money on software, services and content can only be realized where these are fully protected. Almost 90% of new smartphones sold in...

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Is Apple killing software biz as we knew it with iPhone, iPad and iOS? Part I: Show me the money
Nov19

Is Apple killing software biz as we knew it with iPhone, iPad and iOS? Part I: Show me the money

The original iPhone launched the global smartphone wars and shifted the personal computing balance of power forever. Google rose to the challenge, responding with Android, whereas Nokia, Blackberry, Microsoft, HP and Dell have been shunted aside. Nearly every smartphone sold these days is either an Android or iPhone. Forget which smartphone you think is the best, or which OS you believe is superior, or who has the better smartphone “ecosystem”. Instead, consider the business model differences between these two primary combatants, iPhone and Android. Could it be that the Apple model of selling hardware to the user is the only sustainable option? There are fundamental differences between how Google offers Android and how Apple offers iPhone. For Google, while they maintain control over ongoing development of Android, the mode of sales is via licensing. Follow Google’s guidelines and they let you have Android for free. They also give you Google Search, Voice Search, Google Maps, Google+, which includes video calling, and much more – all free. This has worked amazingly well, provided we do not consider profits. With license partners including Samsung, LG, Sony, Lenovo and many more, there are well over 100 million Android devices sold every quarter, a truly remarkable feat. Apple follows a completely different path with iPhone. There is no licensing. Apple is fully responsible for hardware and software, for the media store and app store, for payments and updates – they even design their own chips. The result of these two very different strategies has been that Android has captured the largest share of the market, by far, while iPhone rakes in the bulk of the profits, by far. I believe Apple has the superior business model – by far. The “smartphone wars” are not a parallel of the PC wars. There, Microsoft won handily. Apple’s Mac, tightly controlled by Apple, was relegated to niche status – in terms of market share, revenues and profits. Too many pundits mistakenly believe the smartphone wars will offer a repeat:  Google Android as the new Microsoft Windows. Apple iOS as the new Apple Mac. iOS and iPhone are destined to be minor players, they say. The giant smartphone market will standardize around Android. This is wrong for several reasons. Firstly, today’s Apple is bigger and richer by far than either Google or Microsoft. Today’s Apple has a massive global retail footprint, with nearly 400 stores that generate about $16 billion annually. This also means Apple can better support (and promote) their products, far better than either Microsoft or Google. Thanks to App Store and the Mac App Store, where once it was difficult to buy software for...

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