A bite out of Apple’s brand

By Chris Sorensen - Wednesday, January 30, 2013 at 11:22 AM - 0 Comments

Shares of Apple, formerly the world’s most valuable company, have lost more than a third of their value since September, tumbling from a high of US$705 to below US$450. Investors are concerned that Apple has suddenly lost its mojo just as competition facing its flagship product—the iPhone—mounts. Last week’s quarterly results, though not shabby by any stretch ($13.1 billion in profit on $54.5 billion in sales), did little to change anybody’s mind. Analysts were hoping to have their expectations surpassed. Instead they were barely met.

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Apple disappoints shareholders…and consumers

By James Cowan, Canadian Business - Thursday, January 24, 2013 at 1:45 PM - 0 Comments

Yesterday Apple posted the largest quarterly profit in the company’s history, and still somehow managed to disappoint investors. The stock was down nearly 11% this morning, with analysts citing myriad reasons for disappointment: slowing growth, lower-than-expected iPhone sales and the launch of the iPad Mini, which offers slimmer profit margins than its full-size compatriot.

Now, let’s be clear: Apple is not a company in crisis. It sold 47.8 million iPhones in the last quarter, a 78% improvement over the previous year, and sold 7.5 million more iPads over this Christmas season than it did the previous one. But any expectation the company could maintain this kind of skyrocketing growth indefinitely is—and always was—unrealistic. If Apple’s growth for the next five years matched what it’s done in the past five, the company’s revenue would hit $1.2 trillion, according to a recent report by A.M. Sacconaghi, an analyst at Bernstein Research—roughly equal to the GDP of Australia. Unless investors expect Apple to start printing its own currency and opening embassies, they need to accept an inevitable slowdown in growth.

Apple cannot afford to simply stare at its balance sheet and assume everything is fine. Research in Motion made a similar mistake, assuming their customers would stay loyal and their profits would stay healthy, even as warning signs mounted around them. Indeed, Apple is banking on the same consumer devotion to its products as RIM once did. “At Apple, it’s important to us that we make products that customers not just like, but love,” CEO Tim Cook told analysts yesterday.

That love for Apple is increasingly fickle. Consumers once enraptured with the iPhone can now cast their eyes to Samsung, or a fleet of other phones running the Android operating system. Apple hasn’t done much to maintain consumer loyalty with a widely derided revamp of iTunes and the complete failure of its in-house map application. As people live with Apple products, they develop grievances and gripes about their idiosyncrasies. “For glassy-eyed fanboys like me, the seamlessly magical Apple experience has frayed a little at the edges lately,” Canadian Business columnist Bruce Philp recently wrote.

Part of that fraying is the fault of the company, no doubt. But it also has to do with a general shift in the digital world. Apple has always made beautiful objects, but consumers now expect their gadgets to play well together. The new expectation is that we can, say, download a song on your phone, and then stream it to your stereo. Or store our photos in the cloud and view them on our tablets or TVs. This is a great idea, in theory, and one that Apple is clearly chasing. The company’s iCloud service, which now has 250 million users, is intended to provide this seamless experience. Anyone who’s used it, however, knows that the reality is far from it, requiring plenty of fiddling with menus and network settings. For the company that built its reputation on “It just works,” this is a serious problem.

Apple garnered love by selling fuss-free products. That’s a considerable challenge even when you’re building a single device. The challenge becomes exponentially greater with each phone, tablet and laptop added to the equation. And further, Apple has long relied on a “Halo effect,” where consumers enamoured with their iPhone decide they might love an iMac as well. But if those two devices don’t communicate, it creates a temptation to look elsewhere instead.

Apple’s short-term health seems assured. But unless it can make cloud computing and networking as elegant as it once made the iPhone, it won’t be feeling the love forever.

It’s confirmed: Apple is human after all

By Chris Sorensen - Wednesday, January 23, 2013 at 5:59 PM - 0 Comments

With concerns mounting about slowing growth and increased competition from rivals, Apple investors were hoping the iPhone—and iPad—maker would blow the doors off of its first quarter financial results. But while the Cupertino, Calif. company came close, it didn’t quite meet Wall Street’s expectations.

Apple reported earnings of $13.1 billion (U.S.) in the first quarter, about the same as what it earned during the same period last year. But investors were focused on Apple’s $54.5 billion in sales, which was less than the $54.9 billion that was expected by analysts. Another key figure—profit margin—also came in below the Street’s expectations at 38.6 per cent instead of 39.5 per cent, suggesting Apple’s ability to command a premium price for its products in the face of competition from rivals like Samsung is slipping faster than anticipated. Shares of Apple dropped below $500 in after-market trading. The stock has fallen by 26 per cent since September.

As for device sales, Apple said it sold 47.8 million iPhones, 22.9 million iPads, 4.1 million Macs and 12.7 million iPods in the quarter.

CEO Tim Cook reminded analysts on a conference call that Apple remains an impressive story, noting that it has so far sold well over half a billion devices running its mobile iOS platform. He also took on rumours that demand for the iPhone, which accounts for nearly half of all sales, was faltering amid reports it had cut orders for parts from some of its suppliers. “The supply chain is very complex,” Cook said, adding that it would be a mistake to try to interpret a single piece of data, even if it’s accurate, as being representative of Apple’s broader business. He also said initial iPhone 5 sales were constrained by Apple’s ability to make them quickly enough.

Apple is still an impressive company with impressive prospects. But investors have grown accustomed to being dazzled. Good simply isn’t good enough anymore.

Apple’s war on skeuomorphism

By Chris Sorensen - Thursday, November 1, 2012 at 4:05 PM - 0 Comments

Kevork Djansezian/Getty

One of the more interesting revelations to come out of Apple’s management shuffle this week, which saw iOS software head Scott Forstall turfed because of the Maps fiasco, is the apparent war on skeuomorphism inside One Infinite Loop. For those who aren’t design-minded, a skeuomorph is a product design element that hints at something which previously served a functional role (like spokes on a car’s hub caps).

Forstall was a big proponent of using these sorts of ornamental—some say “tacky”— flourishes in Apple’s software: the green velvet background of the games application, the leather binding on iCal or the wooden bookshelf in Newsstand.  The late Steve Jobs also favoured the approach, believing it helped put a soft edge on the sometimes cold world of technology. In fact, Jobs instructed Apple’s software designers to use a linen-like texture in the iPhone’s notifications menu, which is swiped down like a roman blind.

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Why the iPhone is bad for society

By Peter Nowak - Thursday, September 27, 2012 at 11:43 AM - 0 Comments

(Jacky Naegelen/Reuters)

I was hoping not to write anything more about the iPhone after the flurry of activity last week, but one thing about the device – not just the new iPhone 5 model that sold more than five million units over the weekend, but all versions – still bugs me. The price.

As we learned in the patent case against Samsung, Apple is making a huge profit on the iPhone. According to court documents, the margin is double on what the company earns on the iPad. As Reuters puts it:

Apple Inc earned gross margins of 49 to 58 percent on its U.S. iPhone sales between April 2010 and the end of March 2012.

Between October 2010 and the end of March 2012, Apple had gross margins of 23 to 32 percent on its U.S. iPad sales, which generated revenue of more than $13 billion for Apple, the filing said. Apple does not typically disclose profit margins on individual products.

As I wrote recently, the reason Apple makes so much more on the iPhone is because it isn’t really selling the devices to consumers, it’s selling them to wireless carriers. The carriers turn around and sell the phones at a discounted rate in exchange for the subscriber signing on to a contract. In Canada, this inevitably means a three-year commitment.

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The magician? All eyes on Tim Cook

By Chris Sorensen - Wednesday, September 12, 2012 at 9:00 AM - 0 Comments

Apple Inc CEO Tim Cook. (/Stephen Lam/Reuters)

All eyes will be on Apple CEO Tim Cook today as he steps on stage at San Francisco’s Yerba Buena Center. He is expected to unveil the iPhone 5 after months of leaks and speculation about the latest iteration of Apple’s flagship device. And it’s not just consumers who are waiting with bated breath. So, apparently, is the entire U.S. economy.

But the real story may turn out to be Cook himself. Since he took over as CEO following Steve Jobs’ death last year, there have been persistent questions about how the iPhone and iPad-maker might change under his stewardship. So far, Cook has established himself as an extremely capable replacement. Under his watch, sales have continued to climb and Apple’s shares have soared more than 75 per cent, making Apple the world’s most valuable company—ever.

Yet, for all of that, most would agree that some of the magic appeared to die with Jobs. For consumers, at least, there has been a notable lack of things to get truly excited about lately. The iPhone 4S was widely viewed as more of product update as opposed to an Apple-style breakthrough. The same goes for the latest iPad. Instead, headlines during the past year have focused more on run-of-the-mill corporate activities, ranging from Cook’s decision to pay dividends to shareholders (Jobs preferred to hoard cash) to Apple’s high-profile patent lawsuit fight with Samsung and its ongoing war with Google. Suddenly, Apple is starting to look like just another giant company, albeit an incredibly successful one.

Of course, it’s not like Apple under Jobs wasn’t run like a big corporation. It was. And much of what Apple is now doing was set in motion by Jobs himself—particularly the lawsuits. The difference, though, is that Jobs had an uncanny ability to make people forget about the more mundane side of Apple’s corporate activities, and focus instead on the company’s wondrous products—the famous “reality distortion field” at work. It was a key ingredient to Apple’s success.

Many are now waiting to see whether Cook can pull off the same trick.

Apple vs. Google

By Chris Sorensen - Friday, August 17, 2012 at 1:42 PM - 0 Comments

Getty Images; Istock; Photo Illustration by Taylor Shute

Siri, the iPhone’s voice-activated “virtual assistant,” kicked off this year’s Apple Worldwide Developers Conference in June by cracking jokes about San Francisco’s weather, Silicon Valley’s venture capitalists and other subjects only software engineers could find funny (“How many developers does it take change a light bulb? None, that’s a hardware problem”). But it wasn’t long before Siri launched a few verbal jabs at Google, as well as the Asian manufacturing giants that now churn out millions of iPhone-esque devices to run on its Android mobile software. “I’m excited about the new Samsung,” Siri deadpanned in her digital twang. “Not the phone—the refrigerator. Hubba, hubba.”

Siri’s gentle ribbing masked a deeper fallout between Apple and Google, once strategic partners. Before he died, Apple co-founder Steve Jobs told his biographer that Android was “grand theft” of the iPhone concept. “I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong,” he said. “I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.”

Many assumed Jobs was referring to the avalanche of patent infringement lawsuits Apple has launched against Samsung, HTC and others. But in recent months it’s become clear he had other plans too. At the same June developer’s conference, Apple unveiled a new mapping application that will replace Google Maps on the iPhone and iPad. Then, earlier this month, Apple revealed that iPhones and iPads would no longer ship with Google’s popular YouTube app pre-installed. Even Siri, though still a beta project, is considered by some to be an eventual replacement for Google’s ubiquitous search engine on future Apple machines. “Apple wants to cut the cord—any ties it has to Google,” says Kevin Restivo, a senior analyst with research firm IDC. “It’s a classic turf grab. The more control you have over the smartphone operating system and the user experience, the more lucrative it is.”

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YouTube, skateboards and a silk hat

By Mark Richardson - Wednesday, July 18, 2012 at 7:11 AM - 0 Comments

Kenora, Ontario – Day 35

Trans-Canada distance: 4,461 + 137  = 4,598km

Actual distance driven: 11,002 km

Mark and Tristan, YouTube stars

NOW: (Kenora) Since we didn’t drive far today, this seems a good time to introduce properly the car that I’m driving on this Trans-Canada Trek. I shot this video at the halfway point of the Trans-Canada Highway just south of Wawa – take a look to see what we’ve done to the Camaro and check out our souvenirs, and find out what Tristan really thinks of the Todd Medal.

THEN: The road linking Ontario to Manitoba was the final provincial road link to be completed in Canada, if you don’t count the islands of PEI or Newfoundland. Like the rest of the prairies, Manitoba was more concerned that its roads should lead to U.S. markets in the south than to eastern Canada. A working rail line was completed in 1882, which was sufficient for moving grain to the silos at Port Arthur (now Thunder Bay), so most politicians didn’t give the thought of a road much priority.

Sometime in the 1920s, Ontario’s minister for northern Ontario, James Lyons, bet a silk hat with the Manitoba minister of public works, W.R. Clubb, that his province would be first to complete the road to the provincial border. Considering that Ontario had to finish 50 km of road through rocks and swamp while Manitoba had about 60 km of fairly flat and easy highway to build, it should have been a sure thing. It wasn’t.

Check in here tomorrow to find out what happened.

SOMETHING DIFFERENT: (Dryden) I got an email from the PR guy at General Motors this morning. “Both of your rear tires are a bit low,” he wrote. “You might want to put a bit of air in them.” The GM guy was in Oshawa; the car was parked outside my hotel room in Dryden.

The Chevy Camaro that GM’s provided to me for this cross-Canada drive comes with OnStar, but also with an available app that tells all about what’s going on with the car right on my iPhone. Because the car belongs to GM, I had to use the PR guy’s email to register the app, and he got to check out the vehicle.

“You have just over half a tank of gas,” he went on, showing off now. “Your fuel range is approx. 387 km. You’ve been averaging 11.5 L/100 km on the car.”

I can even lock and unlock the Camaro remotely with my iPhone, and if I should ever want to, I can honk the horn and flash the lights without being inside. Pretty impressive technology that we’ll probably take for granted in another decade.

SOMETHING FROM TRISTAN, 12: (Kenora) Today was a pretty great day because I went skateboarding at the local skate park in Dryden.

Tristan on a roll

I tried to learn new tricks but it didn’t work out very well – hopefully I’ll get them soon so that I have bragging rights with my dad.

We arrived in Kenora at about 3:30 pm and went to the swimming pool where we soon realized that we had a perfect view of the skate park. I saw a guy on a BMX bike doing a back flip off a jump which I thought was pretty cool. We picked up a pizza and we were done for the night. Today was great.

Microsoft new tablet computer is about as exciting as a USB key

By Jesse Brown - Tuesday, June 19, 2012 at 2:27 PM - 0 Comments

As an invention, the tablet computer was kind of obvious.  It’s a laptop without a keyboard.  Or maybe it’s a giant smart phone.  But Apple did it first, and probably still best, and since the iPad, every other tablet has been off-brand.  How do you improve on such a simple and featureless design? Even Apple’s attempts have been underwhelming.  Inventing the “iPad killer” may be a much tougher challenge than inventing the iPad.
Witness Surface, the new tablet computer from Microsoft.  How have they differentiated their product? By bringing back the keyboard.  Check it out:

Sure looks like a laptop, doesn’t it?

Surface was originally going to have two screens.  That would have been okay, but could it have competed with the Sabre Pyramid?

Perhaps the real question is why anyone would care about such boring technology.  Don’t get me wrong–tablets are marvels of ingenuity.  Every now and then I pause to consider how amazing it is that humans have concocted such bizarre and complex things.  But then again, the light bulb is pretty cool as well.  Only stoned teenagers can afford more than a few moments a day to marvel at such things.  The rest of us simply get on with it.

So when will we get on with it, tablet-wise? I’m waiting for the day when only someone who is about to buy a tablet might care about the release of a new tablet.  I’m excited to get to the phase of the consumer electronics product-cycle where the device is generic and cheap and ubiquitous.

Think USB keys. Have you seen the new ones? Me neither.

Jesse Brown is the host of TVO.org’s Search Engine podcast. He is on Twitter @jessebrown

Is the smartwatch going mainstream with Pebble?

By Jaime Weinman - Wednesday, May 9, 2012 at 10:51 AM - 0 Comments

Your wrist is ringing

Once upon a time, you carried your watch in your pocket. Then it migrated to your wrist. Now the same thing may be about to happen to the smartphone. In April, Vancouver native Eric Migicovsky used the crowd-funding site Kickstarter to request start-up money for the Pebble, a wristwatch that will connect to an iPhone or Android and display emails, messages, and apps. The Pebble instantly became a fundraising phenomenon, racking up more than $7 million in contributions, a Kickstarter record.

When it’s ready to ship, the Pebble won’t be the first smartwatch. It won’t even be Migicovsky’s first, since his California-based company, Allerta, already marketed the Inpulse, a watch that told you when your BlackBerry had a message. But according to Wired magazine, smartwatches “haven’t really caught on with mainstream buyers,” so no major investors wanted to put money in the Pebble. Migicovsky, who studied at the University of Waterloo before moving to the States, told the blog Reyhani Law that he went to Kickstarter only because he “tried the traditional route and it didn’t work.” The Kickstarter bonanza was the first sign that the smartwatch is going mainstream.

What can a smartwatch do for you that a regular phone can’t? Well, for one thing, it spares you the need to reach into your pocket. Migicovsky said he came up with the idea for the Pebble “when I was cycling and I wanted to not drop my phone while riding.” The apps being developed for the watch are aimed at people who can’t hold a phone in their hands: there’s a GPS app for bike riders and a system for golfers to find their way around the course.

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Apple needs to sort its iTunes mess

By Peter Nowak - Wednesday, April 18, 2012 at 1:43 PM - 0 Comments

Not so magical sometimes... (Paul Sakuma/AP Photo)

I saw the most frightening thing last week while I was heading down to New Orleans. The fellow who was sitting across the aisle from me on the plane was browsing through photos on his iPhone. I casually glanced down at his device only to see an entirely unexpected and different kind of device: a picture of fully nude man lying on a bed, his junk displayed in its full glory.

I quickly looked away in silent chastisement. That’s what I get for nosing around, I told myself.

The shock of what I’d seen eventually faded and was soon replaced by thoughts about an issue I’ve been considering for a while, and one that would be crystallized upon my returning home this week–that for all its elegant products, Apple’s iTunes is a giant mess.

It has always been particularly bad with photos, with the man on the plane possibly serving as a great example. My seeing those goods may not even have been his fault. Perhaps he’s a little kinky–I’m not here to judge–and the photo somehow ended up on his phone. It’s easy enough to accidentally sync photos you don’t want from your computer onto your mobile devices.

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Stalking women? There’s an app for that.

By Jesse Brown - Monday, April 2, 2012 at 1:52 PM - 0 Comments

girlsaround.me

This suggestive geometry app was deemed unacceptable by Apple’s fickle censors, but here’s something that made the cut: Girls Around Me, an app for “hunting” women. It’s a simple tool that aggregates personal location data from Facebook and FourSquare from strangers who have (knowingly or otherwise) left their profiles set to “public.” Girls Around Me looks for girls around you and plots them on a Google Map. Click on a nearby girl and the app will pull their information and photos for your creepy stalking pleasure. Would be pick-up artists (and/or rapists) can troll a neighbourhood, gleaning the relationship status, academic histories, likes and dislikes, and vacation photos of women they’ve never met who happen to be walking close by.

Girls Around Me was downloaded over 70,000 times before Cult of Mac wrote about it last week. To call the ensuing discourse a “controversy” would be to suggest that someone out there doesn’t think that the App is gross and dangerous. Even its Russian developer, i-Free Innovations, responded with a “yeah, we know” of sorts, and voluntarily pulled it from iTunes’ App store. But even as they did, they issued a statement complaining about being treated as a “scapegoat” in the privacy debate.

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The almighty Apple

By Alex Ballingall - Friday, March 9, 2012 at 8:30 AM - 0 Comments

How big can an apple get before it falls from the tree? That’s the question investors and analysts are asking as the market value and stock price of Apple Inc. continue to climb. The tech giant unveiled a new iPad this week, and the highly anticipated debut of the iPhone 5 and Apple TV are expected this year. That has several stock analysts speculating that Apple’s share price could nearly double to break the US$1,000 threshold in the near future—it has already doubled five times in the past decade, and currently sits at US$545.

On Feb. 29, Apple joined a handful of companies ever to surpass the US$500-billion mark in total market value. Every other company to break that barrier (including Microsoft, Cisco Systems and General Electric) slumped back below the mark within a year. While most investors remain giddy about Apple’s future, it could just as easily suffer the same fate. As Business Insider’s Henry Blodget wrote recently, the company’s “mindblowing” 24 per cent profit margin in 2011 could erode as the rest of the tech industry finds ways to compete against Apple’s slew of sought-after gadgets, currently sold at premium prices. Still, there is little doubt that Apple is in a dominant position, poised for further growth. For now.

Motorola’s path forward looks easier than RIM’s

By Peter Nowak - Tuesday, October 18, 2011 at 5:58 PM - 5 Comments

The new Razr: super-thin and very light.

As many had speculated, Motorola has indeed dusted off the old Razr name for its new smartphone, unveiled here in New York Tuesday. In the U.S., where the handset maker has licensing rights with the Star Wars folks, the phone actually combines two of Motorola’s most successful brands—it’s called the Droid Razr. For the rest of the world, including Canada, it’s just the Razr.

If you’re into specification porn, Mobile Syrup has you covered. For our purposes here, suffice it to say that the phone is ridiculously light and thin, yet still sturdy, fast and powerful. I played with one briefly and was amazed at how light it felt in my hand. It’s got a steel core and Kevlar on the outside though, so it’s made not to break. Sadly, as a Motorola representative told me, it’s not strong enough to stop bullets (vests apparently have many layers of Kevlar while the phone only has one).

What I found most interesting during Motorola chief executive Sanjay Jha’s presentation was the mention of how the Razr will be aimed at corporate customers as well as the every-day consumer. The device can accommodate secure enterprise email systems and has remote wipe capabilities, which means it’ll probably pass muster with many businesses’ IT departments. Continue…

Is Siri artificially intelligent or just a robot?

By Peter Nowak - Monday, October 17, 2011 at 12:26 PM - 5 Comments

Having just returned from a trip to New York on Sunday evening, I haven’t had much time to play with the week’s hottest new gadget —the iPhone 4S—but I have been able to formulate some initial impressions, especially in regards to its main new feature: the Siri personal assistant.

First, the basics. Yup, the iPhone 4S works as advertised. It’s faster, slicker and generally better than its predecessor, the iPhone 4. Some nifty additions to the operating system make things easier, like you can fire the thing up initially without having to connect it to your computer and you can share iTunes purchases between devices by turning on the iCloud storage option. Both options do a lot for eliminating cables and computers from the iPhone equation.

I particularly like the camera as well. The iPhone 4 had the best camera on any phone I’d tried so far and the 4S is yet another step up. Apple is continuing to strengthen the case for leaving the full camera behind and simply relying on a phone to take photos, at least in casual situations.

Much of the brouhaha over the new device, however, lies with Siri, the voice-recognition feature that can tell the user about everything from the weather to sports scores to scheduled meetings. Continue…

Imagine Rembrandt with an iPad

By Sara Angel - Wednesday, October 5, 2011 at 10:30 AM - 0 Comments

Photo Illustration by Sarah MacKinnon/Maclean's

According to David Hockney, if the 17th-century Dutch master Rembrandt were living today, he’d be using an iPad. Hockney should know. Not only is the British-born painter, printmaker and photographer recognized as a virtuoso himself, he’s an authority on Old Master techniques and the first major art-world figure to have a show featuring iPhone- and iPad-made pictures, Fresh Flowers, which opens Oct. 8 at Toronto’s Royal Ontario Museum. “In Rembrandt’s drawings you can see that he worked very fast. That’s what the iPad permits,” explains Hockney from his studio in Bridlington, a seaside resort in Yorkshire. “Without ever having to get up for a pencil, you can draw from the first moment of inspiration.”

At 74, neither Hockney’s age nor his struggle with deafness has diminished his interest in innovation. He is as famous for his Fauvist landscapes and vibrant images of California swimming pools (in 1964 he fell in love with L.A., where he still has a residence) as his career-long embrace of new methods for making pictures.

In the seventies, Hockney arranged Polaroids as well as 35-mm prints to create photo-collages of a single subject. In 1989, he sent his exhibition art to the São Paulo Biennial via fax. As Charlie Scheips, curator of Fresh Flowers, explains, for decades Hockney’s work “has questioned the role of media and reproduction in art.”

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New iPhone: the ‘S’ is for ‘suckers’

By Jesse Brown - Tuesday, October 4, 2011 at 3:52 PM - 17 Comments

In their hearts, even the faithful know it: every iPhone since iPhone 1 has been treading water.  

A mobile phone that lets you surf the Internet, take pictures and check your email—that’s 95 per cent of the value. Everything else is gilding the lily.

Sure, GPS added some functionality and 3G provided a welcome speed bump. Though nobody uses it much, a video camera can be nice to have. But slimmer width, higher res, longer battery life, faster processor—these are the predictable, incremental improvements all consumer electronics undergo. Slap a new shell on it, change the colour, market the hell out of it, and perhaps folks will be convinced to ditch the pricey, still-functioning gadget you made them want so badly just a short time ago.

Eventually, people figure out that the differences are minor, and only the most insecure, status-obsessed early adopters will keep taking the bait. At that point, there’s only one place to go: downmarket. In Apple’s case, downmarket is most of the market.

For all of Apple’s dominance in mindshare, iPhones comprise just 5% of the cellphones in the world. While we in North America have been squealing with glee for an extra camera on our phone, Second and Third World nations have been experiencing true technological transformation through cheap, rugged phones like this, the world’s most popular handset. For millions, the homely Nokia 1100 isn’t just their first cellphone—it’s their first phone.

All phones will eventually be smartphones, and Apple wants to sell most of them. To do so they don’t need to offer new features, but cheaper phones.

That’s what the iPhone 4S will prove to be: the first entry in Apple’s budget product line. That’s why it works on GSM and CDMA. Pleasing U.S. carriers is now less important than offering a universal device. It’s their priciest iPhone right now, but soon the iPhone 5 will be here, giving Apple occasion to slash the 4S’s sticker price and market it (along with the 4 and the 3G) as Apple’s first affordable options overseas. To buy it here, now, at top dollar, is a sucker’s choice.

In the long run, there’s nowhere for the iPhone to go but down.

Jesse Brown is the host of TVO.org’s Search Engine podcast. He is on Twitter @jessebrown

Inconvenient truth?

By Alex Derry - Monday, October 3, 2011 at 10:00 AM - 1 Comment

Carlos Duran/Corbis

Former U.S. vice-president Al Gore, the self-described inventor of the Internet and global warming prophet, has once again displayed his oracular powers. While speaking last week at an economic conference in Johannesburg, South Africa, Gore, an Apple board member, made specific mention of “the new iPhones coming out next month.” His statement, which he said was intended to be a “plug,” sent tech watchers into a tizzy of speculation over whether Apple would be launching not one, but two models of the iPhone—a slightly upgraded iPhone 4S and the brand new (and hotly anticipated) iPhone 5—at a rumoured launch event on Oct. 4. Neither Gore nor Apple, which is notoriously secretive about new products, has clarified the remarks. But given his inside knowledge of the company’s plans, Gore seems to have confirmed that there will be at least one new iPhone hitting the shelves in October.

Don’t underestimate Apple’s contributions

By Peter Nowak - Monday, August 29, 2011 at 11:07 AM - 4 Comments

Photo by Tony…/Flickr

I’m back from my short vacation and what’s the first thing I see? A character assassination attempt by my fellow blogger Jesse Brown.

Just kidding. I have nothing but respect for Jesse and love his stuff (his interview a few years back with Jim Prentice, where the industry minister hung up on him, is one of my all-time favourites). He messaged me while I was gone to ask if I was okay with him rebutting my blog post the other day about Steve Jobs and Apple’s importance to technology over the past decade. Of course I was, so he had at it.

To summarize, Jesse challenged my assertions that Apple changed everything with a slew of products that included the iPod, iTunes, the iPhone and the iPad. He went on to say that Google has been the far more important technology company over the past 10 years. Continue…

We’ll call you

By Kate Lunau - Friday, August 26, 2011 at 9:30 AM - 0 Comments

Photograph by Andrew Tolson

Everybody knows what it’s like to dial a company’s customer service line and get stuck on hold, waiting for a human representative to come on while tinny music plays through the phone. For those who can’t face another interminable wait, there’s some good news: an app can now do the waiting for you.

FastCustomer (available for iPhones and Android phones) offers a list of over 2,500 companies, including customer service lines for Amazon, WestJet, and Canada Post. Those who’ve downloaded the app select which company they’d like to contact; FastCustomer then puts in an automated call, contacting the user when a real-life representative becomes available. This app, which claims it’s already saved people from spending over 280,000 minutes on hold, “keeps me from being subjected to creative versions of Lady Gaga songs in muzak format,” one enthusiastic user wrote on the FastCustomer blog. For some, that’s priceless, even if the app is now available for free.

Waging a patent war

By Cigdem Iltan - Friday, August 5, 2011 at 9:00 AM - 0 Comments

Smartphone makers have been duking it out in the courts more than they have on store shelves in the past few weeks, and analysts say sales numbers may explain why. Devices that run Google’s Android platform now outshine Apple’s iPhone: first-quarter market-share estimates this year show Samsung has hurdled to 13 per cent from three per cent last year, while HTC jumped to 10 per cent from six. Some analysts believe the results have prompted Apple to lash out with a series of patent infringement lawsuits aimed at HTC, Samsung and Motorola, the world’s top three Android handset manufacturers.

Apple’s market share rose slightly too, but the tech giant’s third-quarter financial results show that nearly half of its revenue comes from the iPhone. Google chair Eric Schmidt last week came out swinging against Apple, accusing its execs of trying to tangle their competitors in a legal web. “They are not responding with innovation, they’re responding with lawsuits,” he said. “We have not done anything wrong.” But it is in Apple’s nature to be a tough litigator, technology analyst Carmi Levy says. “It would be naive of us to think Apple is running scared and is using courts to protect itself,” he says. During an earnings call last month, Apple COO Tim Cook said: “We have a very simple view here. And that view is that we love competition. But we want people to invent their own stuff. And we’re going to make sure that we defend our portfolio fervently.”

While companies that are assertive in the courts run the risk of diverting attention from the marketing of their wares, the manufacturers involved in the ongoing smartphone patent wars are sophisticated enough to focus on both areas, says Levy. Whether court battles impact innovation may be up for debate, but the power of litigation clearly isn’t: after a U.S. International Trade Commission judge recently ruled that Taiwan’s HTC had infringed on two Apple patents, China’s 21st Century Business Herald reported that two Chinese smartphone makers are considering jumping ship from Android to Microsoft’s Mango Windows Phone 7 operating system, raising the question of whether other companies may eventually follow suit.

America with no Apple?

By Alex Ballingall - Monday, July 11, 2011 at 9:10 AM - 0 Comments

Ahn Young-joon/AP

Samsung upped the stakes in its patent dispute with Apple last week when it called on the U.S. International Trade Commission to ban imports of Apple’s iPhone and iPad from China, where they are made. Apple is expected to respond with a similar request, raising the possibility that the tech giants will be choked off from the American market. The two sides have traded accusations of copyright infringement since April, when Apple accused its South Korean rival of ripping off its smartphone and tablet designs. For its part, Samsung has filed similar lawsuits against Apple in Germany and Japan.

While Apple has dominated the tablet market, Samsung has emerged as a big player, too, and is expected to pass Nokia as the world’s top producer of smartphones this year. Ironically, the two companies have enjoyed a close business relationship. Apple is one of Samsung’s biggest buyers of computer chips and screens.

A sommelier in your pocket

By Stephanie Findlay - Wednesday, May 25, 2011 at 9:15 AM - 4 Comments

Photograph by Jenna Marie Wakani

Last year, VinTank, a “digital think tank for the wine industry” based in Napa, Calif., released a report that reviewed 75 wine-related iPhone apps. Last month, VinTank did a redux of the report—this time the number of apps on the market had soared to 452.

A small industry has sprung up around smartphone apps for wine. Some better than others, says Paul Mabray, VinTank’s chief strategy officer, who notes, “there’s a ton of trash out there.” Mabray suggests the best wine apps are the ones with a specific function and a simple interface. Some of his favourites include: Cor.kz, a bar-code scanning app that pulls up info on 750,000 wines, and Nat Decants, described as a “personal sommelier in your pocket,” run by noted Canadian wine writer Natalie MacLean. (It also has a label scanner for wines sold in B.C., Ontario and Quebec.)

The wine app industry is still in its infancy. “There is a tendency for the application to be myopically focused on the oenophile,” says Mabray. He predicts wine apps will soon be more like Instagram or Foodspotting—visual apps where you can post pictures and trade notes with friends. “I’m looking forward to following what wines my friends are talking about,” says Mabray. “More like Facebook, or Twitter.”

Continue…

Is RIM down or is Apple (and others) up?

By Chris Sorensen - Friday, April 29, 2011 at 5:53 PM - 1 Comment

Today, perhaps for the first time, BlackBerry-maker Research In Motion appeared to officially lose the confidence of the analyst community. After months of grumbling about RIM’s too-little-too-late product launches (most recently its widely anticipated PlayBook tablet), RIM finally sent stock watchers over the edge by releasing a first quarter profit warning Thursday that it blamed on further product delays.

Several responded by downgrading RIM’s already beleaguered shares, which closed down 14 per cent Friday at US$48.65 on the Nasdaq. But not before offering some pointed criticism. “We really want to believe, but … as much as we like the stock (and we have until now), last night’s warning caps what has been a string of strategic and execution missteps,” Cormark Securities analyst Richard Tse said in a note. Another analyst suggested that perhaps it was time for RIM’s co-CEOs Jim Balsillie and Mike Laziridis to ditch their sharing of the top job, while yet another seemed to be looking for an outlet to vent months of pent up frustration. “We’ve lost confidence in RIM and don’t see this as a one-time miss,” National Bank financial analyst Kris Thompson said. “We’ve heard for too long about RIM’s great product roadmap. Consumers are not listening nor waiting.” He went on to write, “RIM does not even seem to have dual cameras on its upcoming BlackBerry product line-up. The last time we checked, video is the future.” Ouch.

But while there’s no question investors are disappointed, perhaps it’s time to re-examine why we expect so much of the Waterloo, Ont.-based company. Sure, there was once a time when RIM was top dog in the smartphone world, but that was mostly because it was the only one out there with a decent smartphone to sell. After years of targeting business clients (who, incidentally, still like the BlackBerry’s keyboard and secure email), RIM enjoyed a brief period that began in late 2006 when consumers also became interested in what a BlackBerry could do. So RIM threw on some extra features like a camera and MP3 player and briefly cornered the market with models like the Pearl and Curve. And then Apple came along, launching its original iPhone in mid-2007, changing the game forever. While it took a while for the iPhone’s full impact to felt on RIM’s fortunes, this stock chart (comparing RIM, Apple, Nokia, as well as Microsoft and Google) shows a clear changing of the guard by late 2009:

There’s no question Apple out-innovated RIM in the smartphone space, but it should be noted that Apple has also bested everyone else too. Look what happened to Nokia, the world’s biggest phone maker, which has since been forced to throw its lot in with Microsoft. Other device manufacturers have simply tried to copy the iPhone, with varying degrees of success. Google, meanwhile, is pursuing a different strategy by focusing on software only. Tellingly, no one else has managed to out-iPhone the iPhone even after four years, an eternity in the tech business.

Given that smartphones still account for a relatively small proportion of global mobile sales, the good news for RIM is there’s still plenty of room for everyone in a fast growing market. RIM may no longer be driving the bus, but it’s not going to be running behind it either. It still sells loads of BlackBerrys in North America, Europe and Asia, and continues to expand into developing markets. In fact, RIM’s share performance over the past five years actually stacks up rather well compared to others in the smartphone space—other than Apple’s, of course. To be sure, RIM is far from a perfect company, and there’s clearly much room for improvement. But could it be that RIM’s biggest failing is that it didn’t invent the iPhone? If so, then it has plenty of company.