The Company posted quarterly revenue of 37.4billionandquarterlynetprofitof7.7 billion, or 1.28perdilutedshare.Theseresultscomparetorevenueof35.3 billion and net profit of 6.9billion,or1.07 per diluted share, in the year-ago quarter.
Trip Chowdhry, Global Equities: Quick Take. “We are skeptical about the timing of the deal, which makes us wonder if IBM, and may be even AAPL are going to miss their revenue expectations.
As several sites pointed out, Apple spent noticeably more in research and development, leading to speculations that new product lines are being worked on.
Back in 2010, Google similarly tried to stop Samsung from using Android 2.x to build a tablet clone of Apple’s iPad, insisting that its Android licensees wait until it could release Android 3.0 Honeycomb with features that promoted Google’s own vision for tablets.
Samsung pushed ahead with its Galaxy Tab anyway, distracting attention away from Google’s Honeycomb project while also creating a bad experience for early Android tablet adopters. Google had also warned Samsung that its tablet products were too obviously similar to Apple’s iPad.
Samsung’s shift to Tizen:
Samsung initially used a heavily-modified Android to power its first Galaxy Gear watch. However, fights between the two companies concerning Samsung’s copying of the Google Play store and muscling into other services (including advertising) that Google expected to keep for itself have since contributed to Samsung’s efforts to develop new watch models based on its own Tizen.
The threat of Tizen to Google:
Were Samsung able to migrate its Galaxy customers from Android to Tizen, Google’s market share numbers of devices using Android code would collapse in half. Fortunately for Google, Samsung hasn’t been very successful with Tizen so far.
Google wants more control over Android phones:
At the beginning of this year, Google’s head of Android Sundar Pichai demanded Samsung drop its new “Magazine UX” tablet interface, with The Information later reporting that Pichai was “prepared to forbid” Samsung from using Google’s ostensibly open Android operating system unless Samsung surrendered more control to Google.
The illusion of Android “openness”:
Ironically, Google’s original premise for Android was that it would allow companies to “openly” innovate and experiment with different designs while also allowing hackers and hobbyists to fully access all parts of the operating system, ideas that Google contrasted against Apple’s plans for uniform, secure iPhones limited to running approved, encryption-signed apps.
However, Google’s current plan for Android imposes increasingly strict rules over Android licensees and introduces locked down security features similar to iOS, in an effort to dump hobbyists and pick up enterprise customers and other higher end customers who are willing to pay a premium for secure devices.
Google wants Samsung to put and end to Tizen smartwatches:
Having crushed Samsung’s aspirations for original phone and tablet software, Google is now demanding that Samsung stop developing its own Tizen-powered watches and instead fall in line to support Android Wear, which is only represented on one of the four smartwatch models Samsung currently sells.
Who would have more to lose here? Can Google live without Samsung making Android devices? Or can Samsung be able to deliver hardware and software on its own?
These aren’t just four colorways, or simple variants on coloring the same materials. These are four distinctly different combinations of plastics types and manufacturing methods, some distinguished by color, others by texture, and one by some kind of screen-printed graphic.
What’s more, these are just four options. The site’s headphones page lists—just for this product category alone—some sixty different color and style combinations across five or so different models. (All of which, by the way, sell for at least $179; not bad considering earbuds are given away free as a matter of course with smartphones.)
How that can apply to Apple wearables:
This reminded me immediately of what I wrote wrote last month about “Wearables, Fashion and iWatch”: iWatch, if it exists, will need to be more of a fashionable good than Apple has ever created before; fashionable goods depend in part on variability in order to satisfy individualized consumer expression; and creating variability at scale is the key economic challenge of wearables. It’s very difficult to successfully produce and deliver truly variable technology goods; that’s why iPods have never come in more than four or five colors and why Apple had such a hard time creating a white iPhone on its first time trying.
The difference in the Apple and Beats approach:
If you take a look at Beats’ headphones product catalog, it looks a lot closer to, say, the Nixon watches catalog than any catalog of technology products. Beats’ headphones, like Nixon’s watches, are oriented such that the primary selection criteria are looks and style; you’ve got to wade through those before you decide which model you want. By contrast, on Apple’s site, you’ve got to choose your model before you can choose your style — or, put another way, you choose what you want it do, first, and then you get to choose what you want it to look like.
These differences reflect fundamentally distinct ways of thinking about products, or more importantly, fundamentally distinct ways of thinking about what customers want. One path leads to a company that makes technology that (they hope) consumers will find to be fashionable; the other path leads to a company that makes fashionable goods powered by technology. Apple acquired Beats because it hopes that its future will look more like the latter than the former.
My criticism isn’t the easy play that they are firing 12,500 Nokia employees after claiming to be mobile first — it’s that they made these announcements too close together without laying out their strategy going forward clear enough. 1
And that is a problem of the worst kind: it is a leadership problem. A lot of people are liking Nadella, but I’ve never been fond of him being CEO and I think this moment is the most crucial for him. So far, he is not handling it well.
The very fact that a middling executive could be brought on for a turnaround of Nokia, and compete with the iPhone/Android onslaught with absolutely zero turnaround experience was one of those decisions that has confounded me and I continue to blame the Nokia board for shooting itself in the head. On his watch, Nokia essentially eviscerated. Android might have been a better decision, but he went with Windows Mobile. The stock tanked, market share shrank and like proverbial Lord Mountbatten he was part of the last days of the Nokia Raj.
And Nokia, the once haloed and peerless brand when it came to phones was sold to Microsoft for relative pittance. Elop heads up Microsoft’s Devices Group. Think of it this way — since Elop took over as Nokia CEO, the company has cut over 50,000 jobs (if you include today’s announcement.) That is just mind boggling. That bumbling strategy which was the hallmark of Elop’s Nokia tenure still continues — in other words, Microsoft doesn’t really have a Nokia strategy. From Elop’s memo today: “In the near term, we plan to drive Windows Phone volume by targeting the more affordable smartphone segments, which are the fastest growing segments of the market, with Lumia.”