eXtensions - Wednesday 12 July 2017
eXtensions - The Wednesday File: Crying Wolf on Apple's Quarterly Results; and Licensing Problems, Past, Present and Future
By Graham K. Rogers
Orée Keyboard in Walnut
Quarterly Results and Crying WolfWe were told last week that Apple is to announce its Q3-2017 results on 1 August, so in the next couple of weeks we can expect all manner of dire warnings in articles about Apple and how it is doomed, which is a ploy (in my opinion) to drive down the share price. At the right time, some will start buying, and others will start recommending investors buy. Healthy profits follow. Many analysts cite how the price has dipped in the last week/month/3 months and indeed there are fluctuations, but a look at the 5 year and 10 year charts show a steady rise in share prices.
Apple 10-year chart - Source Yahoo!
In addition - and this is similar to what some call cannibalisation in the hardware field - more people are using services like Netflix or HBO (where available) and Apple takes a cut of those subscriptions. Every time I pay my Netflix or iFlix fees, Apple has 30% for providing the platform. That smaller market share may not matter at all.
As I write this, a newsflash tells me that "Apple has just weeks to fix its fingerprint problem" (wring hands mode, ON). When I first read this (on the Apple Watch, actually) I rolled my eyes and summoned the spirit of Trip Chowdhury, who famously pronounced - one of a series of negative Apple reports from him - that Apple only had 60 days to produce a Watch or it would fade away. Needless to say, that produced much derision. Apple released the Watch many months after the Chowdhuri deadline and still survives. The Motley Fool called this perhaps the worst analyst call in history. We don't hear much from Trip Chowdhuri these days, but a search on Google will produce a list of Apple howlers.
There have already been a number of stories about the screen and the fingerprint scanner being moved to the back; or not. This week, as a sort of final thrust at an Apple fail, Barrons suggests that the problems surrounding the fingerprint scanner are so difficult that Apple may ship the iPhone without this feature. This is preposterous (Ben Lovejoy, 9to5 Mac). That rumour, starting with the Barron's claim, was repeated several times during the day (Tuesday) and grew as it spread.
As so many features work with TouchID, like Apple Pay (where available) and online purchasing, to pull such a feature would make the iPhone dead in the water. Apple will have a solution by the time the iPhone ships, and if there is a problem, the iPhone will not ship until it is solved. There have been minor features, like the Depth Effect (with iPhone 7 Plus) that we were told was to come with a later update; but the AirPods were delayed until such time as an undisclosed problem was fixed. Unlike some companies, Apple does not release untested products (no matter what some critics think).
Almost all of the above was written on the iPhone with that Bluetooth keyboard and (apart from screen size) I am at a loss to see any difference to using the Mac or iPad Pro. Mind you, some cannot seem to manage with a smaller device and it was interesting to see a link in a Tweet from Jim Dalrymple on The Loop that showed a lady on a train in the UK, who is using an iMac (Helena Horton, Daily Telegraph). There may of course be a logical reason. . . .
Along with the theme that Apple is doomed again, I just read that Samsung is rumoured to be about to announce a larger profit than Apple. Looks good in a headline, but there are a few riders, such as the range of products Samsung has, Apple is yet to announce its own profits for the quarter, and Samsung has just released a new phone, which had a problem or two with a button (didn't something like that happen last year?).
Neither Samsung's or Apple's figures have been released yet, but what does that matter to Wall Street? They will have their own estimates, probably in a week or so, and if Apple does not meet them, despite its own guidance (what Apple anticipates earning), then Wall Street goes into a tailspin. For the record, Apple's guidance (from the Q2 report) for the quarterly results to be announced on 1 August shows,
Technology LicensingApple does have two problems on the horizon and as had been the case in the past, these both involve patents: Qualcomm and Imagination. Both are likely to turn nasty before they are resolved. Like Samsung, they may never actually be fully ended as that company now tries to beat Apple at everything, even at the risk of rushing some technology to market before it is ready. Remember, too, that a lot of Samsung's profits come from Apple purchasing its chips and OLED panels (Ben Lovejoy, 9to5Mac), something I just do not understand: why support a company that stabs you in the back over and over?
We are aware of the flaming phones last year, although many writers on Android, usually vociferous about Apple, managed to keep relatively quiet on that. One writer who only ever reports Apple faults, wrote nothing on the Samsung faux pas until it was all over, but did manage an Aha! moment when a single iPhone caught fire: on a hot day, after taking photographs (you have to ensure the camera is off), wrapped in trousers, in a car parked in the sun.
None of the unusual circumstances were mentioned, which is par for the course: several iPhones have caught fire over the years, including a well-publicized incident on a plane, although most were due to unauthorized (and botched) repairs or non-standard chargers. In those cases, while the initial incident received widespread circulation, outlines of the causes after investigation were hardly reported at all.
A number of reports have appeared concerning Samsung's Bixby and the way an update has prevented the button used for this being reassigned by users. Business Insider (Jeff Dunn) has a fair summary of the situation and some implications. I do note that one of the critical articles is from Android Authority, who notes that it is now fixed, but in the original piece calls this a "dumb move" (Scott Adam Gordon).
One of the other companies who are offering support (amicus) is Samsung. Like the Korean company in its earlier dispute with Apple, Qualcomm is asking the international Trade Commission to block imports of iPhones, although that would only affect the USA: the world is much bigger these days.
The situation had a twist last week when it was discovered that, having already recruited a number of former staff from Imagination, Apple had set up a new office in Saint Albans, not far from the offices of Imagination in Kings Langley (James Titcomb, Daily Telegraph). I went through there a couple of times last year as it is not far from where my parents live. I may well take a drive past again when I visit in a couple of weeks' time. When I first heard of this on Twitter last week I wondered if the reason were to attract Imagination staff who lived in the area, so that they would not need to relocate.
It seems I was right.
Graham K. Rogers teaches at the Faculty of Engineering, Mahidol University in Thailand. 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. After 3 years writing a column in the Life supplement, he is now no longer associated with the Bangkok Post. He can be followed on Twitter (@extensions_th)
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