Google in November launched Android Lollipop, which it called its largest, most ambitious OS update ever — but no one is using it.
Less than 0.1% of Android devices currently run Lollipop, according to the company’s most recent numbers.
The problem is, very few phones are capable of upgrading to Lollipop yet. It’s up to the carriers and phone manufacturers to decide when the update rolls out to various phone models.
This compared to 63% of devices on iOS 8 and 33% on iOS 7 as of December.
The real story behind Jeff Bezo’s Fire Phone debacle
Introduced with grand ambitions last summer, the Fire Phone is widely seen as a fiasco. Originally priced at 199(withcontract)andintendedasaniPhonecompetitor,itnowsellsfor99cents,andAmazonhastakena170 million write-down largely attributable to unsold Fire Phone inventory. Yet Bezos finally answers the question with the kind of reasoning that investors, customers, and pundits have come to expect from him: Amazon is going to pour more resources into its phone. Defending the Fire Phone as a “bold bet,” Bezos argues that it’s “going to take many iterations” and “some number of years” to get it right.
That’s $170 million gone but more to be pumped into the Fire Phone pipeline.
But lately it’s not an answer that Wall Street has liked. In October, Amazon shocked shareholders when it reported a 437millionnetlossforthequarter,itsbiggestin14years.Quarterlyrevenuehit20.58 billion, but the company’s growth rate, once a bright spot for those leery of Amazon’s lackluster profits, is slowing. And prospects for the fourth quarter, which closed after this story went to press, were not much better: Over the past five years, Amazon’s fourth-quarter growth rate has steadily declined, from 42% in 2009 to 20% in 2013—and the company was projecting between 7% to 18% for 2014. “For years, the story has been that Amazon isn’t profitable because it is growing so fast,” wrote hedge-fund manager David Einhorn, in a letter to his Greenlight Capital investors. “Now growth is slowing, but rather than unleashing higher profits, the slower growth is leading to even greater losses. One of the principal bullish assumptions supporting many bubble stocks is, ‘The company is growing too fast to be very profitable.’ We think Amazon is just one of many stocks for which this narrative will ultimately prove false.”
Is Amazon choosing the wrong battle to fight?
What makes the Fire Phone a particularly troubling adventure, however, is that Amazon’s CEO seemingly lost track of the essential driver of his company’s brand. It’s understandable that Bezos would want to give Amazon a premium shine, but to focus on a high-end product, instead of the kind of service that has always distinguished the company, proved misguided. “We can’t compete head to head with Apple,” says a high-level source at Lab126. “There is a branding issue: Apple is premium, while our customers want a great product at a great price.”
Scenario #1 – like MP3 players where Apple dominates market share
Apple will easily strongly influence the smart watch category in 2015 and 2016. It is hard to argue against Apple’s vertical advantage and tight control of their entire ecosystem. This advantage undoubtedly will give them a dominance in the early stages of a category. If a number of things play out, we can see them command the category for the long term.
Apple had a near monopoly on the iPod/MP3 market. We can see a similar scenario playing out where Apple effectively “iPods” the smart watch category, maintaining dominant share over the next five to seven years. While the early success of the iPod was driven by Apple releasing iTunes for Windows, we don’t see the need for Apple to support other platforms in order to hold sway over the smart watch category. Apple’s existing iPhone customer base is large enough to keep it the foremost smart watch vendor and their smart watch platform as the reigning one in the smart watch category.
Scenario #2 – like smartphones where Apple dominates profit share
Another possible scenario is the smart watch category shapes up very much like the smart phone category. Apple succeeds at their goal to acquire the top 20% of the market and rake in the majority of the profits. While Android Wear, or another third party licensable smart watch OS, provides the software platform to the vast majority of hardware companies making smart watches.
In this scenario, the vast majority of Chinese and Hong Kong produced smart watches adopt Android Wear (or something else) and flood the market with very low cost smart watches. Also in this scenario, Swiss watch makers competing in the sub $1000 watch market start making smart watches because Apple Watch cannibalized nearly all the sales of Swiss-made watches in that price range.
In both scenarios, Apple earns a lot of money.
TAG Heuer and the future of the luxury watch industry
TAG Heuer’s smartwatch won’t sell. There’s no market for it.
Apple Watch requires pairing with an iPhone, and TAG’s smartwatch will need to pair with a smartphone to even have a chance of being as feature-rich as Apple Watch.
Apple isn’t going to re-engineer iOS for TAG’s benefit, so TAG’s smartwatch won’t pair with an iPhone the way Apple Watch does.
In order to have even a chance of being as feature-rich as Apple Watch, then, TAG’s smartwatch will have to pair with an Android phone. However, TAG wearers aren’t Android users. Rich people buy TAG watches, but rich people don’t buy Android phones.
This is TAG’s dilemma. Its smartwatch will need to pair with an Android phone to be anywhere near as feature-rich as Apple Watch, but TAG wearers don’t buy Android phones.
“What’s great about this country is that America started the tradition where the richest consumers buy essentially the same things as the poorest. You can be watching TV and see Coca-Cola, and you know that the President drinks Coke, Liz Taylor drinks Coke, and just think, you can drink Coke, too. A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same and all the Cokes are good. Liz Taylor knows it, the President knows it, the bum knows it, and you know it.”—Andy Warhol
And this concept of Coke for everyone applies to Apple:
That’s what the iPhone and iPad are like. There are hundreds of millions of people who have bought these products, and they now own the best phones and tablets in the world. A few years ago at SXSW in Austin, I saw Michael Dell waiting outside a restaurant. The thought that popped into my head: He’s a billionaire, but I know for a fact that I have a better phone than he does. Not everyone can afford an iPhone, not by a long shot, but everyone who can knows they’re getting the best phone in the world.
So what to expect from Apple?
Apple only enters markets where they can be a market leader in quality. They unabashedly claim to make the world’s best computers (portable and desktop), the best phones, the best tablets, and the best MP3 players. The best. Of course not everyone agrees with that. But many of us do, and even those who prefer, say, Lenovo laptops or Google’s Nexus phones and tablets, would agree, if they’re at all reasonable or have any sense of taste, that Apple’s products are in the running for “best”.
The Apple Watch only works for Apple if it is, in some sense, the best watch in the world. Not the best smartwatch. That’s not enough. The best watch, period. The best thing you can wear on your wrist. It doesn’t have to pass that test for everyone. It may well be targeted more at people who’ve stopped wearing or have never worn a watch than at those who love fine mechanical watches. But it has to pass that test for many people.
How does it compare to existing competitors?
My impression of Android Wear is that it’s best thought of as a wrist-worn terminal for your Android phone and for Google’s cloud-based services. An extension for your phone, not a sibling device. Android Wear devices are almost useless other than for telling time when out of Bluetooth range from your phone. I don’t think that’s a device that many people want; it’s a solution in search of a problem. Call me biased if you want, but I think Android Wear is simply the result of the rest of the industry trying to get out in front of Apple, out of fear of how far behind they were when the iPhone dropped in 2007. On the surface, they do look like the same basic thing: small color LCD touchscreens on your wrist. But all Android Wear devices are larger and clunkier than the larger 42mm Apple Watch, and none of them are even close to the smaller 38mm one. Is there anyone who would dispute that Apple Watch is far more appealing to women than any other smartwatch on the market?
About that button:
The most intriguing and notable thing about Apple Watch’s design, to me, is the dedicated communication button below the digital crown. The entire watch is fully operational and navigable using just the digital crown and touchscreen. You can go anywhere and do everything using taps, force presses, or turning and pressing the digital crown. There is no need for that extra button (which, in the unveiling video, Jony Ive described only as “the button below the digital crown”). Add to that the fact that Apple is notorious for minimizing the number of hardware buttons on its devices, and the fact that the existence of that button keeps the crown from being centered, and my attention is piqued. The only explanation is that Apple believes that the communication features triggered by that button are vitally important to how we’ll use the device.
These are just some parts of Gruber’s article that caught my attention. It is a long piece but definitely worth reading the full article if you are interested in the Apple Watch.
We are now in the early parts of early 2015. Exciting times.
Autodromo’s Bradley Price on the Apple Watch
I agree. People focus so much on the movement, and they don’t think enough about the other aspects of why a watch is beautiful or special. People get so fixated on specs and not on what is special about these watches as a thing.
That frustrates me a little, because I put so much into the rest of the watch. I don’t have the wherewithal to develop my own movement, as many watch companies don’t. In fact, 98 percent of watch companies don’t have that wherewithal.
Let’s focus on the case finishing, the design of the case, the design of the dial, and the concept. What is the watch trying to say? What is the meaning of the watch? What’s the emotional content? I don’t ever see people internet forums discussing those types of things.
About the Apple Watch:
OM: What do you think about the Apple watch, the concept of it?
BP: It’s beautiful. As someone who designs consumer electronics and watches, the more I looked at it the more impressed I was. It’s got Marc Newson’s fingerprints all over it.
It’s clearly something he designed rather than Jony Ive. It’s funny they announced he was working with them after the watch. But to me that was the Apple way of underhandedly giving him credit for the design without actually saying he designed it. But it seemed to me very Marc Newson.
OM: Why do you say that?
BP: The most obvious giveaway was that the rubber strap had the exact closure method that the Ikepod had. But the way the strap integrates with the case is so him, this sort of inflated square.
Now, obviously any designer could do an inflated square. But Marc Newson’s Ikepod watch is a really influential design. I certainly have been influenced by it. If you look at the Monoposto [Autodromo’s first automatic watch], they’re that sort of bowl-like case. There was a little bit of that Newson flavor in that watch, even though it’s not a modernist watch per se. The Apple watch certainly is in that idiom, a lot like his other work.
More on Apple’s design philosophy:
OM: Those companies all go to design experts and designers. And then they design the device. This is so different from what Apple does, where engineering and design are in sync and ultimately guide the product. The design can leverage the gains from system-level engineering, and vice versa. I find they have a different view of thinking in products — of vertical integration.
BP: Then all these companies would be like, “We want to be like Apple” or “How can we even more be like Apple” or “We want a product like Apple’s.” I don’t know if it’s still like that, but this was five or eight years ago and Apple could do no wrong. But the thing was, they weren’t looking at the whole process. They were just looking at the end product. They weren’t looking at how that product got to be that way.
The key things that Apple does, aside from what you’ve mentioned, is that the decision-making is a lot more autocratic, and it’s a lot more direction given from specific important people that are tasteful, thoughtful people. That informs the whole world. It’s not just a bunch of middle managers and committees and stuff. You have one guy who was like “This is good or bad” and “I like this” or “I don’t like this.” That’s hard to replicate, but that’s what makes something great versus just OK. You need that person to be the arbiter.