AMITIAE - Tuesday 15 July 2014

Cassandra: Apple and Facing Resistance to Change

apple and chopsticks


By Graham K. Rogers


We are all resistant to change. There is, for example, some pain being felt this week in Redmond, as CEO Satya Nadela is preparing the ground for job reductions and admitting that some changes in the whole approach to Microsoft's business plans will have to take place. This item is nothing to do with Microsoft, although these topical comments do illustrate that even giants - as well as individuals - need to switch track sometimes. The skill is in knowing when to embrace the inevitable.

Mac For all the criticism of John Sculley, among Mac followers, we must recognise that he was brought in to do a job. His task was to run a company, but mistakes were made here. Despite his impeccable credentials selling sugar water, the mindset in the embryonic West Coast computer industry, was not the same as the East Coast executive had expected.

The initial error was that of Steve Jobs who focused on Sculley and then would not let him do the job he was hired for. At least with Steve Ballmer (and Satya Nadella) Bill Gates did vacate the premises. The second error was to sideline Jobs - an attempt to put him out of the way - when he was not the sort of person who could ever be silenced, particularly when he was part-creator of Apple.

As in mathematics, two negatives make a positive and the result of Jobs departure was to end up with a widely-reported return just as the company was ready to keel over. What Jobs had learned in the interim, both personal and business, came together at that moment, setting in motion one of the most unusual company revivals ever.

That revolution in Apple led many to believe that Jobs could do no wrong. He did a lot of things that were right of course, not the least by inspiring (and bullying) Apple personnel to the best efforts. And then he was gone.

By 2010, Apple had a much larger press following than it had in the 1990s and those now watching were no longer the types of people who were interested in the technical details. Wall Street and its analysts tried to peel back every aspect in order to glean business intelligence; the popular press found a way onto the band-wagon, while the bloggers also saw a chance for hits. Everyone had become an Apple expert; while those who had been following Apple carefully for several years were ignored.

iPhones The arriviste press missed much, particularly with the arrival of each iPhone which had become an object of desire (loosely speaking) - this was where the focus was. Time and time again, a new iteration of the device was declared a failure, a dud, lacking innovation, before the introduction was done. Few actually looked at the technical specifications: after all, they had been following the rumours for months.

Each time an iPhone was announced, while the shiny outside was less changed and the bells and whistles showed few (or no) changes, the declarations that Apple was done were rushed into print. A particular example here was the camera. Had Apple upped the pixel count, many analysts would have got that; but changing the software to improve images was lost on most. Likewise the change from processor to processor, such as A6 to A7, was lost on many of the commentators.

Like the improvements to industrial processes by which the iPhones are made (thus increasing profitability) the A-series chips spell danger for others. I wrote when the A-series first appeared of the potential apparent with the design. Sooner or later, Apple will produce something that no manufacturer can follow like onboard features that no one else has.

The last in the series, the A7 scored twice here with its 64-bit processing that no one would be able to follow for several months; and with the secure enclave that stored mathematical data from fingerprints. There are rumours that the next chip in the A-series will run at 2 GHz which will be enough for lower-powered computers, like the successful MacBook Air.

When Steve Jobs died, the former COO, Tim Cook, was placed in an unenviable position. As head of one of the most successful companies (after one of the best come-back acts) he could not lose, but he could be dragged down. And how everyone tried. Of course he was no Steve Jobs; that was not why Jobs hired him. He was appointed CEO with the intent that he would be Tim Cook and not try to be a clone of Jobs.

There were some faltering steps, most notably with the Maps app, which was really in beta. Bangkok users will be aware that the accuracy still leaves much wanting, with several locations in the middle of the river and many other errors. Comparisons with Google maps suggest that Apple is not alone here.


The problems with the Maps revealed another side of Cook: he was able to apologise; but he was also ruthless. The removal of Scott Forstall as senior vice president of iOS Software was a shock for many (not least of all Forestall, I shouldn't wonder), but the signal was not noted by many.

It has taken a couple of years of continued excellent financial results as well as several changes to the corporate structure that Jobs would never have tolerated (particularly shareholder payouts) for some of Wall Street to revise its approach.

On the way, Cook stood up to a double act of sycophantic politicians determined to gouge Apple on its corporate tax structure; and has been seen in public far more than was to have been anticipated. Indeed, now many expect Cook to be available and he appears on TV, at conferences as well as recently in the San Francisco Gay Pride Parade.

Luca Maestri The next event for Cook and Luca Maestri Apple's new Chief Financial Officer (as Peter Oppenheimer retires) is the report of the Q3 2014 earnings: 22 July. Although Apple always provides guidance, the analysts like to try and second-guess, sometimes penalising Apple for not reaching their estimates (even though Apple exceeded its own guidance). Last time out, however, Apple outshone all the analysts and there was a sort of grudging realisation that perhaps Apple under the stewardship of Tim Cook was heading in the right direction.

The rumours suggest that Apple may sell between 35 and 40 million iPhones in the quarter, but that is the only figure any of them is really concerned about. Maybe a few iPads over 10 million - bear in mind these start at $299 - a few million Macs and a couple of million iPods. Also bear in mind, that unlike other companies in the mobile devices business and in the PC business, every device that Apple sells makes a profit.

None of that, of course, includes services like the iTunes store, or iCloud which ticks over nicely year after year (from the time it was iTools) bringing in cash.

Of course, not everyone is on board and there are some who seek out anything that detracts from Apple and its successes. A fitting example is the news from the analyst Ming-Chi Kuo whose own track record on Apple is not the best. I could probably do as well with the spin of a coin. He reports that there are problems with production of the iPhone 6 with the 5.5" screen.

No one actually knows for certain if there is to be a 5.5" screen, although like the mysterious iWatch, commentators have been telling us for a while now that Apple "must" produce a larger-screen iPhone. We do not know either if the next device will be called "iPhone 6" either for that matter. Nonetheless, the news was picked up by the jungle telegraph and widely circulated as fact. I saw a Tweet on Monday (15 July) which included the comment, When did Apple not have production problems? with any device, which put it into a better context.

Also trying to ruffle feathers is Corning who have done a great job over the last few years with their Gorilla Glass. This was used in all the iPhones and had a particular toughness, although it would break in the wrong circumstances of course, being crystalline and was never scratch-proof.

Corning are not happy that Apple is going all out with its change to Sapphire crystal as the screen coverings for the next iPhone. Having looked at the product and made a comparison, Apple must have been convinced as they put up the money to purchase the machinery for making enough of the new covers that they have the market sewn up here. Corning puts forward the argument that the new product is not good enough and put out figures that shows the Sapphire breaks more easily.

Not only this, but they managed to produce a video that shows a piece of Sapphire glass breaking at 161 lbs (pounds) pressure after an abrasion process. The piece of Corning Gorilla glass under test did not break, but we were shown a figure of 436 lbs. Although Mike Wehner comments on TUAW about the unknowns in the test and the possibility that it might not be free of bias, I note that the copyright date is 2013 so may be even less relevant to what Apple is having produced.

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. He is now continuing that in the Bangkok Post supplement, Life.



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