AMITIAE - Saturday 18 January 2014

Cassandra: Weekend Comment - China Mobile, Tim Cook, Analysts and Apps

apple and chopsticks


By Graham K. Rogers


For anyone who follows Apple, a week can be quite a long time. This week of course we have had the usual announcements of failure by Apple and the release of the iPhone in China which Tim Cook attended. He likes China. It is a big market and there is lots of potential there.

Locally, there is a fair amount of tension and in one of my weekend runs into the Siam area of Bangkok saw that the main malls - Paragon, Siam Centre, Siam Discovery - were almost empty around lunchtime. Oddly, perhaps the busiest store I saw was the iStudio in Siam Discovery and that was not packed like it can be. Other stores were closed and the walkway across to the BTS station was shut. I had to walk to Siam Station. Down on the road there was an unusual tension and an unusual market.


Many analysts only look to sales in the United States of course and often talk Apple down. Several of the iPhone boxes at the China Mobile release had his autograph on them for some lucky customers and I am sure there will be hundreds of these boxes soon available in Phantip Plaza along with the other Apple knock-offs that appear from time to time.

Despite the photographic evidence, the New York Times continued its stance of not reporting positively on Apple, Eric Pfanner called it a muted beginning and wrote that "only about a dozen customers showed up".

Cook I am not sure where he got his information from, but a quick search found me a link to a Fortune item by Philip Elmer-DeWitt which pointed out that the release was at 3,000 stores and that to avoid some of the chaos and scalping that has been a hallmark of other Apple product releases in China, there was pre-registration.

He also notes that the current iPhones have been on sale for a while from other carriers. There is also online purchasing of course. And just to demonstrate the falseness of the Pfanner article, he includes several photographs in which there most certainly are more than 12 souls.

I was able to find a couple more sources sitting in my condo in western Bangkok, so Pfanner should easily have been able to outdo me unless he had other motives. Take the Shane Cole item on AppleInsider, which has some of the same pics as above, but a few different ones, including one of the Tim Cook autographed boxes. Also on AppleInsider, Mikey Campbell had a few words and a few pics.

To complement the China Mobile release, Tim Cook had earlier announced that sales of the iPhone "hit a record high in Greater China in the fiscal first quarter". Also in the article by Aman Jain on ValueWalk that "millions of iPhones have already been ordered, which reflects the rock solid demand" for them. Not that the analysts would have you believe this.

Several Wall Street experts proved (in my mind at any rate) how little they know about Apple and what it does by the predictions of doom that began to appear just after the new year (and not long before the 27 January Apple financial report for the quarter). Apple will probably take in more than any other corporation in the world, and make higher profits, but Wall Street will still be wringing its hands. And this is odd, because when Amazon reports a loss, its share prices go up.

All that rubbish last year about what Apple must do got a bit tiresome. If you read that in a headline, move on, the writer obviously knows nothing. Wearable devices: a niche market that may not appeal to Cupertino. The Apple TV, no sign of that. A larger iPhone - a phablet even - does anybody buy the ones that already exist? I have a hard time not laughing when one of my colleagues makes a call on his oversized Samsung iPhone clone: how do people use these things?

As if the figures from China are not enough to have analysts rethinking some of their dire predictions (they aren't of course), news from the Home Front might also have them wondering. Eric Slivka is reporting on MacRumors that Apple's lead over Samsung has widened in the "smartphone race".

iPhone This is aimed at the popular press as Apple has never been particularly concerned about market share. For example when Steve Jobs announced the first iPhone, it was the aim to have a 1% market share by the end of the year. That is not very ambitious really.

The fact that the 1% was exceeded several times over, suggests that Apple's motivation - the product and the customer experience - were on target. That is despite the misleading information coming out of all manner of expert articles, before the writers had even seen the device. I had.

I handled one of the first iPhones the day after it was announced in a back room of the Moscone Center under great security. It was of course like nothing I had ever seen before.

Apple is not motivated by market share, so all those urgent articles last year about how Apple "must" make a cheap iPhone to increase its market share were so much hot air. But no one listens to that or to the point that share price does not really matter.

As Apple shares are fully paid up, their price makes little or no difference to the ways the company works, except in one way. If the shares fall too low - I mean to ridiculously low prices, say below $100 - then they could be snapped up by one of those sharks who buy cheap and sell dear and do untold damage on the way.

I did write a series of items in the middle of last January: Why would Wall Street want Apple as a Broken Company and it is remarkable how similar the comments were then. Since then of course, there has been some sharing of profits, some Senators made themselves look silly going after the money that Apple legally keeps abroad, like many other companies; and Carl Icahn appeared to think that he was a driving force with an investment of more than $1 billion. That sounds a lot but it is less than a 0.25% of Apple's $486.46 billion capitalization.

Last week, to a great gasp, it was announced that the Nest thermostat development had been sold to Google for about $3.2 billion. This makes me worry. Google already has too much of its face in my business already - although I love the ads - and the possibilities for use of such data are enormous; and risky for users. Chris Baraniuk on NewScientist has a look at some of the implications behind this acquisition, including "the prospect of Google-controlled smart-home technology" - I find that creepy.

Of course, many people were shocked that Apple did not snap this up, especially as Tony Fadell had been associated with Apple for a number of years. My question was, Why would it? There was nothing here that would really integrate with what Apple does now, although heaven knows what it might do in the future.

iPhone Apple has appeared to be in a bit of a spot this week because parents didn't know how to lock their iOS devices and prevent their kids making purchases. There were a couple of well-publicised cases last year when some kids had managed to spend several hundred dollars (or pounds) of the family money either because there was no password, or because when the password was entered there was a 15-minute window that could be exploited. And exploit is they did.

Apple settled, fixed the hole and refunded the money voluntarily: going looking for some families who had not actually reported the problem. One wonders if the parents themselves learned anything from the experience. But after voluntarily starting the scheme, Apple suddenly found the federal Trade Commission sniffing round. As Philip Elmer-DeWitt writes it, there seems to be some government dishonesty here (remember also the iBooks case that is still ongoing with a judge who may have an axe or two to grind) in that a new figure has been pulled out of the sky. If Apple does not manage to refund all of this new figure, then the spare cash goes to the FTC.

While we are on apps, Starbucks had a problem in that its app, "the most used mobile-payment app in the U.S" has been storing passwords in text. No encryption, which should be standard for any such app. Evan Schuman reports on the Starbucks transgression and the point that, after they were found out, there was an update that fixed the security hole. Why couldn't they have done that themselves?

MacPro Locally, I found that there are still old Mac Pro computers available in Bangkok. I guess they would make a useful tool for some who need some solid processing power.

I also looked at a couple of apps that are useful to users in the region: a Calendar app for Singapore and Malaysia; and an app to remind Moslem users of prayer times. I have turned off some of the features, but left on a couple of the calls to prayer so that once or twice a day I hear these: oddly soothing.

Just when you think that no one can produce any more photo apps for the iPhone that will have any new features, another one appears. I had a look at an app called Faded at the end of the week and loved it: subtle filters, a good range of tools. This is really useful. It cost $0.99 which is nothing, but I enjoyed it so much I also paid for the $4.99 expansion pack: voting with my credit card.

Graham K. Rogers teaches at the Faculty of Engineering, Mahidol University in Thailand where he is also Assistant Dean. He wrote in the Bangkok Post, Database supplement on IT subjects. For the last seven years of Database he wrote a column on Apple and Macs.



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