This Vanity Fair interview with Bill Gates and Satya Nadella for their upcoming November issue does a good job capturing both men’s personalities and, even more importantly, offers a sense of the nature of the challenge facing Microsoft 2.0.
Business
Samsung earnings expectations plummet
AP Wire:
The steep decline in income, likely the widest fall in Samsung’s earnings history, shows how the company’s quick rise to the world’s top smartphone maker with the Galaxy phones faces what might be its biggest challenge. Its struggle is apparent in both the high-end phone segment where it competes with Apple Inc. and the low-end segment where it faces rising competition from the likes of China’s Xiaomi and Lenovo.
This has been coming for a while now, but there’s no proof like watching earnings projections fall by half in a very short time.
How the world sees Apple Pay
Cincinnati Enquirer:
How it works: Customers with the new iPhone 6 and the Apple Watch will be able to pay at registers with a wave of their devices. Customers buy virtual encrypted “tokens” from Apple to be stored on their phones – so in the event they’re lost or stolen, no credit card info is on the device. More details will be released this month by Apple.
I still struggle to get my head around exactly how Apple Pay works, but I do know that customers won’t be buying “virtual encrypted tokens” from Apple.
Hewlett-Packard to break in two
NY Times:
The company, considered a foundational institution of Silicon Valley, said in a news release that it intended to divide itself into a company aimed at business technology, including computer servers and data storage equipment, software and services, and a company that sells personal computers and printers.
Both companies will be publicly traded. The business-oriented company will be called Hewlett-Packard Enterprise, while the PC company will be called HP Inc. and will retain the company’s current logo.
4 million preorders for iPhone 6 in China
Want China Times:
China’s “big three” telecom carriers — China Telecom, China Unicom, and China Mobile — recorded over 1 million preorders for the iPhone 6 and 6 Plus only six hours after they began accepting them for the new phone’s Oct. 10 debut.
Buyers have been able to place their preorders at operators’ online and brick-and-mortar stores as well as their subsidiaries. The total number of preorders could exceed 2 million if they included those sold through distributors such as Suning Appliance and D.Phone.
UPDATE: Benjamin Mayo at 9to5mac reports the number is now 4 million preorders.
Understanding how Apple Pay works
Yoni Heisler does an excellent job of demystifying Apple Pay. Here’s my take on how all this works. Now with corrections.
The joy of Apple slamming, and why it just doesn’t work
Nice essay from Ken Segall (long time creative director who worked on the Think Different campaign, came up with the iMac name) about the fallout from Bendgate.
Ebay to spin off PayPal, adopting strategy backed by Icahn
New York Times:
EBay said on Tuesday that it would spin off its PayPal payments unit into a separate publicly traded company, taking a step the activist hedge fund magnate Carl C. Icahn first demanded nine months ago.
On Apple’s Irish tax issue
A few days ago, an article appeared in the Financial Times (paywall) alluding to a ruling by the European Commission that Apple benefited from a favorable Irish tax rate:
Apple will be accused of prospering from illegal tax deals with the Irish government for more than two decades when Brussels this week unveils details of a probe that could leave the iPhone maker with a record fine of as much as several billions of euros.
Today, the PDF of the ruling itself was posted. If you really want to understand the nature of the European Commission’s ruling, this document is the place to go. It is well-written (though slightly redacted) and makes its case, step-by-step.
iPhone 6 and 6 Plus finally approved for sale in China
Both models have cleared all regulatory hurdles and will be available for pre-order on October 10th and in Chinese Apple Stores on October 17th.
Tales of China’s iPhone 6 black market
Are the sales of smuggled iPhones in China a black market or a grey market? We dig into that and share some smuggling anecdotes.
Why Europe will likely say ‘meh’ to Apple Pay
Kirk McElhearn, writing for MacWorld, makes the case that though Apple Pay will certainly be a big deal in the US, it won’t have the same disruption potential in Europe.
BendGate backfires
Nice writeup from AppleInsider focuses on the controversy itself, how it ultimately benefits Apple and injures the companies that have tried to take advantage of it.
Apple turns on iPhone 6 and 6 Plus sales in 22 more countries this morning
From the original press release, here’s the current list of countries:
iPhone 6 and iPhone 6 Plus will be available in the US, Australia, Canada, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore and the UK beginning this Friday, September 19 and in more than 20 additional countries beginning on Friday, September 26 including Austria, Belgium, Denmark, Finland, Ireland, Isle of Man, Italy, Liechtenstein, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Qatar, Russia, Saudi Arabia, Spain, Sweden, Switzerland, Taiwan, Turkey and United Arab Emirates.
Apple releases iOS 8.0.2, addresses cellular network and Touch ID issues
iOS 8.0.2 fixes a number of issues including the issue in iOS 8.0.1 that impacted cellular network connectivity and Touch ID on iPhone 6 and iPhone 6 Plus.
Apple creates iOS 8.0.1 support page
From Apple’s 8.0.1 support page:
We have a workaround for you if you have an iPhone 6 or iPhone 6 Plus and you lost cellular service and Touch ID functionality today after updating to iOS 8.0.1. You can reinstall iOS 8 through iTunes by following the instructions below. We are also preparing iOS 8.0.2 with a fix for the issue, and will release it as soon as it’s ready in the next few days.
The support page walks you through the process of reverting from 8.0.1 back to 8.0 and closes with this comment:
The Health app won’t work in iOS 8 after these steps. It will be fixed in our upcoming iOS 8.0.2 software update.
VIDEO: Google Chairman Eric Schmidt addresses brutal competition with Apple
[VIDEO] This 15 minute interview starts with some softball questions, but gets to the heart of the matter at about 4:19 when they bring in a clip from Digicel founder Denis O’Brien who accuses Google of not being a good partner, likening Google and Facebook to selfish party guests.
Schmidt is also pressed about his take on seeing the huge lines for the iPhone 6 rollout and the discussion turns to Google’s brutal competition with Apple. Fascinating to watch.
The competitive advantage of Apple’s privacy push
Spend a few minutes browsing Apple’s privacy pages. Privacy is a big issue and Apple has clearly made protecting user privacy a primary design pillar in its products. That’s great for consumers, but privacy also offers a significant competitive advantage against competitors like Google and Facebook.
Apple rolls out Actual Size print ads
When Apple announced the iPhone 6 and 6 Plus, I wrestled with the question of how big the new models were with respect to my existing iPhone 5s. Will the 6 Plus fit in my pockets? Obviously, a trip to the Apple Store is one solution, but not everyone has access to one.
Apple is clearly aware of this issue and has responded in a number of ways.
A business suit onesie
Yes, this is a real thing.
The Suitsy is a jacket connected to a shirt connected to pants. A zipper is hidden behind the shirt-button placket (with false buttons) and pants zipper. Fake shirt-cuff material extends from the end of the jacket sleeves to give the impression of a complete dress shirt worn underneath. It’s as if a jumpsuit and a business suit had a lovechild.
Engineers, come get your $250K salary
Silicon Valley is slowly drifting into the pay model used by sports franchises, with extraordinary salaries for franchise level talent.
In just a few days, iOS 8 already on 46% of devices
Very positive trend numbers for iOS 8, especially as compared with the poor initial numbers reported by as network Chitika.
The seamy underbelly of waiting in line for the new iPhones in NYC
[VIDEO] Casey Neistat is a long time self-professed Apple nerd and documentary filmmaker. His latest effort involves the cultural change in the lines of people waiting overnight for new Apple product, a sea change from the early days of Apple fanatics, to the current lineups populated (at least in the case of these Manhattan Apple Stores) by people trying to make a buck.
At first blush, this was a little hard to take. It seemed like victimization, pure and simple. But then I read this piece by Dave Aiello.
I think what’s important to note about this film is that the issue is not Apple’s worldwide product release method at all. At most, the resale activity Neistat depicts represents a side-effect of the failure of the Chinese state regulatory agencies to approve the iPhone 6 and 6 Plus in a timely manner. These regulatory agencies include agencies like the Ministry of Industry and Information Technology, and collectively function as the equivalent of our Federal Communications Commission (FCC) and perhaps our Federal Trade Commission (FTC).
I would argue that, in an effort to show that they control the Chinese smartphone market and Apple does not, these agencies delayed approval of the iPhone 6 and 6 Plus beyond Apple’s planned worldwide release date. By doing so, they created a situation where a graymarket of epic proportions could redevelop overnight. This graymarket may now be exploited in the fashion described in the film.
The only thing I’m really sorry about with respect to this film is that the filmmaker chose to highlight the Chinese people standing in line in New York as if they’re victims being exploited by criminals from China who are referred to as “Chinese mafia”. (Some people also call use of the term “Chinese mafia” racist.) I imagine that the people who waited in line made enough of a profit on resale of the iPhones they purchased to justify their time standing in line.
In this case, one person’s criminal is another person’s street-level entrepreneur.
Watch the video, embedded below. Some good food for thought. [via Seth Weintraub of 9to5mac]
First weekend iPhone sales top 10 Million, set new record
From the Apple Press Release:
Apple® today announced it has sold over 10 million new iPhone® 6 and iPhone 6 Plus models, a new record, just three days after the launch on September 19. iPhone 6 and iPhone 6 Plus are available in the US, Australia, Canada, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore and the UK and will be available in more than 20 additional countries on September 26. The new iPhones will be available in 115 countries by the end of the year.
An astonishing number.
The thriving Chinese iPhone 6 black market
The research agency Counterpoint Research has estimated that as many as 5 million units may be smuggled into China before it is possible for consumers to purchase officially from Apple.
Even if Chinese approval is close, the black market won’t wait for it. Fascinating.
On adopting the big screen of the iPhone 6 Plus
Quartz:
Call it the Church of Apple. Steve Jobs once called big phones Hummers (like the cars) and said that no-one was going to buy them. (He was sitting next to the current CEO, Tim Cook, when he said that.) Only a year after the iPhone 4S, the iPhone 5 was released with a 4-inch display and it sold like hotcakes. The Apple fans bought it and loved it. And the same thing is happening again. So what gives?
To me, it’s about acclimation. The move from the iPhone 4 to the iPhone 5 form factor was an easy adjustment. The iPhone 5 was lighter and longer, but still easy to use with one hand. The move from the iPhone 5 to the iPhone 6 is a bit more of a leap, and the move to the iPhone 6 Plus form factor is truly dramatic, challenging our preconceived notions about the aesthetics of phone size.
What’s in a can of Coke?
How do you make a can of Coke?
The Vons grocery store two miles from my home in Los Angeles, California sells 12 cans of Coca-Cola for $6.59 — 54 cents each. The tool chain that created this simple product is incomprehensibly complex.
Each can originated in a small town of 4,000 people on the Murray River in Western Australia called Pinjarra. Pinjarra is the site of the world’s largest bauxite mine. Bauxite is surface mined — basically scraped and dug from the top of the ground. The bauxite is crushed and washed with hot sodium hydroxide, which separates it into aluminum hydroxide and waste material called red mud. The aluminum hydroxide is cooled, then heated to over a thousand degrees celsius in a kiln, where it becomes aluminum oxide, or alumina. The alumina is dissolved in a molten substance called cryolite, a rare mineral first discovered in Greenland, and turned into pure aluminum using electricity in a process called electrolysis. The pure aluminum sinks to the bottom of the molten cryolite, is drained off and placed in a mold. It cools into the shape of a long cylindrical bar. The bar is transported west again, to the Port of Bunbury, and loaded onto a container ship bound for — in the case of Coke for sale in Los Angeles — Long Beach.
And that’s just the beginning. Great read.
Early data suggests iPhone 6 outselling 6 Plus by a significant margin
As of 4 PM Pacific, the iPhone 6 accounts for about 2.45% of the devices MixPanel is seeing in use. The iPhone 6 Plus, meanwhile, makes up just 0.31%. Everything else (that is, every previous generation of iPhone MixPanel still sees in the wild) makes up the other 97.24%.
Why is this? Here’s one take.
Huge lines for new iPhones at European, US Apple Stores
Amazing that this still happens after all these years.
At Apple’s store on Fifth Avenue in New York, police officers put up barricades as the line stretched more than 10 blocks and the crowd cheered continuously for the 15 minutes before the phones officially went on sale.
Product Loyalty? Brilliant marketing? Whatever the cause, this is something that Microsoft and Samsung can only dream of.
Gruber’s response to the “Don’t buy the new iPhones” lock-in article
Joshua Brustein wrote an inflammatory piece for Businessweek, called Hey, Android Users, Don’t Buy the New iPhones. In a nutshell, the basic premise is this: Although the new iPhones are the best phones on the market and superior to the larger screen Android devices they are replacing, it’s just too hard to switch ecosystems, so stick with Android.
I struggled with a reply to this. And then I read John Gruber’s response on Daring Fireball. Spot on. Go read it.