Wednesday, August 28, 2013

Post PC Cars, Trucks, and Motorcycles

Steve Jobs was always about the next big thing.

By now, most people understand "Post PC" to mean the focus of innovation, growth, and profits in the technology sector has shifted away from the PC. In introducing the iPad, Jobs likened the PC to a truck while the iPad was more like a car. Most consumers don't really need a truck he implied, but he never meant to suggest PCs were going away. What if Jobs got the analogy slightly wrong and the iPad is more like a motorcycle?

Motorcycles are wonderfully convenient for quick trips around town. They're easy to ride, quick to park, and economical to run. But they're not well suited for family vacations, long trips, or even inclement whether. A lot of people who own a motorcycle still need a car. Some use their motorcycles mostly for fun.

In some parts of the world, a motorcycle might be all most people can afford. In more developed countries however, most working adults want access to a car. Imagine if there was no such thing as a motorcycle until one company got the idea. At first, demand for this novel and cheaper mode of transportation would skyrocket. Some might even predict the end of the auto industry. Within a few years however, motorcycle sales would level off. The auto industry would be smaller but continue. Someday, the auto industry might even become a hotbed of innovation again.

The iPad is revolutionary and disruptive, the PC is no longer the only mainstream computer in town. Where I differ with some predictions is whether tablets are the future of personal computing. I think people are conflating different things.

Smaller, lighter, instant on, always connected, all day battery life, these things are no brainers. But comparing an iPad to a MacBook Air or similar, I think both have their place. These products are designed around different user experiences. Much of the battle over the future of personal computing is still in the cloud.

Tuesday, April 23, 2013

Why All The Crazy Reporting On Apple (AAPL)?

The purpose of a business organization is to create value by serving customers which Apple is doing just fine.

Stock markets on the other hand are a form of legalized gambling based on forecasting and manipulating the future perceived value of a stock investment. Investors can be ill informed, fickle, and impatient. The more popular a stock becomes, the bigger the opportunity to profit by manipulating its perceived value.

This is why we keep seeing a stream of ridiculous and often conflicting reports predicting tough times ahead for Apple. It has little to do with Apple's actual financial results or management which have been exemplary. There are powerful financial interests seeking to move the stock price up and down. To profit by trading such a stock, you only need to predict its future perceived value better than your trading partner.

Maximizing shareholder value in the short run has very little to do with running a successful business unless management has been so corrupted by drinking the Wall Street Kool Aid that they actually put maximizing their own short term gain ahead of serving their customers. If this ever happens, the original visionary purpose of the company has been lost.

Jack Welch the iconic CEO of GE described "maximizing shareholder value" as the dumbest idea in the world. The reason he used such strong language is because there are a lot of sheep who actually believe this nonsense.

Don't buy it. The purpose of our economy is to provide the goods and services people want, not to enrich Wall Street cronies. Apple is doing just fine at the former. The later is not Apple's job.

Tuesday, March 5, 2013

Understanding the "Post PC era"

Years after Steve Jobs coined the phrase "Post PC era", people are still debating what this means.

By "Post PC era", I think Apple recognized the focus of innovation, growth, and profits had shifted along with the attention of the masses. Traditional PC software (and hardware) isn't going away, it's just no longer the most dominant thing driving the high tech industry.

Steve Jobs described PCs as trucks compared to the iPad which is more like a car. Most consumers don't need a truck, but that doesn't mean trucks are going away. If you live in the US, almost everything around you was delivered by a truck. Our modern economy is built around moving goods by truck.

To use a simple analogy, virtually all the software for iOS and Android devices was created using PCs (including Macs). The idea that Apple must someday merge their iOS and Mac product lines is like telling Ford Motor Company they'll someday merge their car and truck business because maintaining a separate truck division is too expensive.

For the foreseeable future, this is complete nonsense. The PC and Mac are here to stay.

In the long run, who knows what computers will look like. A good operating system may last 10-20 years. On this scale, Mac OS X is mature while iOS is still young. Interestingly, both are built on top of UNIX whose derivatives have thrived for over 40 years.