Wednesday, December 31, 2014

Winding Down 2014: On Quite a Year @ Apple

It has been quite a year at Apple.  We have been reflecting upon a company that has done so much to help be at the forefront of the creation of the "vision of the possible" that we believe will continue.  It caused Apple to rise up to be the most valuable company in the World.

As it is with such companies, the World continues to take notice.  As part of the Winding down the Year, we decided to have a "look back" at quite a year for Apple on all fronts.  It all began with how it all started during the 3rd Quarter this year and Apple's latest "Big Day"-September 9.  Some  10 Million iphones were sold on the first Weekend Alone.   #Apple continues to be haunted by challenges with its' iCloud service.    When this crossed the wires from the Sydney Morning Herald,  it was a true moment of zen that prompted me to activate my App--this is as Apple touted its' "40 Hours" of work on the problem--and Dylan Tweeney's defacto indictment published over the W-End underscores the challenge faced by Apple.  

The Quarterly Revenue Apple had during Q3 2014 said it all: 

 Apple on Monday reported earnings for its fiscal fourth quarter that ended Sept. 27, 2014. And with the exception of the iPad, Apple beat Wall Street's estimates across the board: Revenue, earnings per share, and even unit sales of the iPhone and Mac surpassed expectations.
As you can see from the chart below, which was provided for us by BI Intelligence, Apple's $42.12 billion in revenue is a big 12% jump from the same quarter a year ago. It was Apple's best September quarter ever — thanks in large part to the iPhone 6 and iPhone 6 Plus, which continue selling like hotcakes; the iPhone in general accounted for 56% of the company's revenue this quarter. But the real surprise is the Mac, which had its best quarter in Apple's history with 5.52 million unit sales; the Mac accounted for more of Apple's revenue than the iPad (16% versus 13%, respectively). Apple expects an even bigger December quarter, projecting $63.5 billion to $66.6 billion in revenue for the holiday season — that would make it the company's most successful quarter in history.
Read »

 It also made profound headways on Margins as epitomized by this telling chart (again courtesy of the team at the Business Insider): 


Based on a manufacturing cost breakdown from and research firm IHS, which was charted for us by Business Insider Intelligence, Apple will likely make huge margins from its latest phones due to the low cost of materials. The iPhone 6 and iPhone 6 Plus cost $649 and $749 without a contract, respectively.

As we have seen the iphone 6 continues to make inroad, the Venture Beat's Dylan Tweney wrote a rather telling indictment of it which we decided to publish it in its' entirety--although it seems as if Apple continues its' inroads ever more throughout 2014:    

I’m not buying an iPhone 6 because I’m cheap. I don’t want to lock myself into a two-year contract, and I’m unwilling to spend $650 or more for an off-contract phone that I’ll probably want to replace in a year, or at the most two years, anyway.
I’m not buying an iPhone 6 because it will bend when I put it in the back pocket of my skinny jeans.
I’m not buying an iPhone 6 because the latest version of the iPhone operating system, iOS 8.0.1, makes it so TouchID doesn’t work on some phones and stops cellular service from working on others.
I’m not buying an iPhone 6 because the previous version, iOS 8.0, had bugs in HealthKit, preventing fitness and health apps from communicating with Apple’s new cloud-based health data interchange service.
I’m not buying an iPhone 6 because I don’t want to be a beta tester.
I’m not buying an iPhone 6 because Android has had features like swipe-to-delete on email messages and customizable keyboards for, what, four years now?
I’m not buying an iPhone 6 because I’m opposed to the closed system that Apple enforces, making it so you can only use its Continuity feature with OS X.
I’m not buying an iPhone 6 because I have so many more choices with Android.
I’m not buying an iPhone 6 because in the future, anyone who wants to have an Apple Watch will also need an iPhone because the watch won’t work by itself. Just like the Samsung Galaxy Gear watch. And you know I’m dorky enough to wear an iPod nano on my wrist, so I’ll probably wind up wearing an Apple Watch too. But I don’t have to like it!
I’m not buying an iPhone 6 because Android is winning the market share battle, and that trend isn’t going to change any time soon.
I’m not buying an iPhone 6 because I don’t want to stand in line. Plus, I heard those lines were filled with people buying phones for the “Chinese mafia.” (Not true, by the way, but I’m still not waiting in line, even if those are just regular people.)
I’m not buying an iPhone 6 because my iPhone 4 works just fine. And you should use a phone until it wears out, not buy a new one every year. I’m also waiting to upgrade my 2001 Honda Accord until it stops running.
I’m not buying an iPhone 6 because if you’re a really good customer on AT&T, the company rewards you by not letting you buy the new model until late next year. What other business works that way?
I’m not buying an iPhone 6 because it doesn’t feel like as big of a leap as the iPhone 5S last year.
I’m not buying an iPhone 6 because the new models are just too big and dorky and uncomfortable in my delicate lady hands. And that camera on the 6 Plus sticks out of the back.
I’m not buying an iPhone 6 because Tim Cook will never live up to the legacy of his old boss, the late Steve Jobs.
I’m not buying an iPhone 6 because Apple is a huge polluter. Despite the fact that it has eliminated lots of toxic chemicals and is taking steps to make its stores and its new headquarters as green as possible, it still runs data centers that use coal-powered electricity, and its manufacturing facilities in China are probably big polluters too, who knows.
I’m not buying an iPhone 6 because I’m not one of the sheeple.
I’m not buying an iPhone 6 because I kind of like feeling superior, standing on the outside and looking in at a party that I don’t really want to join anyway.
I’m not buying an iPhone 6 because I don’t trust Apple’s security, since the NSA has a program designed to make the iPhone completely accessible to its secret agents. Even if it is turned off. Android? Windows Phone? BlackBerry? I’m pretty sure those are safe from the NSA.
I’m not buying an iPhone 6 because for me, phones are basically tools to get a job done, and that job is staying in touch with my reporters and my editors and my boss and the news. And while I appreciate a well-crafted, well-designed product as much as the next gadget geek, I’m not in a rush to get the latest gadget just for its own sake, particularly when the one I’ve got now is doing that job just fine.

What was also telling was how iPad's continue to see a slow death to their sales.    The problem is the broader tablet market as cheaper tablets and "phablet's continue to make inroads: 

The iPhone 6 Is Killing The Need To Own An iPad

Pocket, a service that lets people save stories and videos to read/watch later, published data on how user habits are changing thanks to the bigger screens on the iPhone 6. 

The iPhone 6 has a 4.7-inch screen, and the iPhone 6 Plus has a 5.5-inch screen. The iPhone 5S has a 4-inch screen. The iPad Air has a 9.7-inch screen, and the iPad Mini has a 7.9-inch screen. 

As you can see in this chart, iPhone 5S users spent just under half of their time reading on the iPad versus the iPhone. But, once they got an iPhone 6, they only spent 28% of their time on the iPad. When they got an iPhone 6 Plus that dropped to just 20% of the time on the iPad.

If this trend holds for other apps and services, it spells doom for the iPad. If someone only needs an iPad 20% of the time, Apple is not going to sell very many iPads.  Read »

We here @ #Outsiders are users of Pocket as well for our on-going research and view this as quite compelling since there is no need for iPads.    Amazon, in the meantime, is making profound inroads as it announced its' $ 99 Kindle HDX this year.    It was quite compelling as Apple CEO, Tim Cook, discounted Amazon's threat to its' business.

We continue to be fascinated by Apple Watch and Apple Pay and eagerly await its' arrival in 2015.     But, many have already been "one step" ahead of it which we've also followed-including Pebble.     Disruptive innovation will continue as noted in this tweet reported by our friends at the Business Insider earlier in the month: 

Business Insider (@businessinsider)
A Chinese startup made this gorgeous iPhone clone that's thinner than any phone in the world
We were also quite taken aback as we reviewed these reports earlier in the year from the Sydney Morning Herald as the controversy over iCloud's Hacking which will continue ever more especially as Sony's latest hack shows the continued challenges in the area of the cloud:   

How I hacked my own iCloud account for just $200

How secure is your cloud?
CHRISTINA WARREN Reverse-engineering Apple's backups to scour iCloud for images and messages is much easier to do than you might think.

Explainer: How safe is 'the cloud'?

Celebrities' iCloud accounts have been accessed by hackers.
HANNAH FRANCIS Is there a risk for everyone with a smartphone

This "Brief Overview" courtesy of the Sydney Morning Herald also underscored how far we've come in the Apple Ecosystem and how far we still have to go....

Happy New Year!!!!

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