Category: iPad
Macs, iPads and Margins…
So as you’re aware Apple talked about Macs recently.
Seeing as this blog is mostly dedicated to talking about Macs, this piqued my interest.
The M3 chip was introduced, and squeezed into the laptops and iMac.
Highlights for me were few and far between, the main positive being that the ‘touch bar’ no longer exists – yay – and the 24” iMac has missed out the M2 and jumped straight to the M3, albeit just the base M3, not the M3 Pro or Max.
The 27” iMac replacement is already here by all accounts.
A very unsubtle hint was dropped – the 24”, 4.5k screen replaces the 21.5” and 27”.
So it’s official- the true replacement for the 27” iMac, is the Mac Mini with Studio Display.
But it was an odd presentation.
At only half an hour or so, it seemed more suited to just a press release, and a lot of pundits have observed this also.
Until the other shoe dropped.
Apple’s earnings report noted a 34% drop in Mac sales and a 10% drop in iPad sales.
Ouch.
So I think this presentation was rushed into place, with a hastily ‘Halloween’ gimmick applied, to goose Mac sales.
But why are sales falling?
Apple has been more active than ever in the Mac market (the iPad not so much), you’d think that all this effort would bear fruit. But it hasn’t.
For me, the blame cannot be applied to a single person, it’s more the way in which Apple seems to currently operate, now that someone with Steve Jobs’ vision and priorities has long gone.
But having said that, I’m not a big fan of Tim.
He’s a numbers guy.
He’s a share holder value guy.
He’s a channel logistics guy.
He’s a spreadsheet guy.
He’s a margins guy.
And although all these things are important, the most important thing that Apple has, is its brand and how that brand is perceived by its customers, its critics and its staff.
While everyone is looking at the details, no one seems to be looking at the bigger picture – what does Apple mean to people.
As my header states, I love the Mac, but Apple as a company? Not so much.
When Jobs first returned to Apple, he launched the Think Different campaign.
A campaign with one purpose, to make people (including those working at Apple) start thinking and caring about Apple again.
To make Apple more than just the products, the numbers, the bottom line and the margin.
To stop the staff worrying about (and leaving) Apple so that they could get on with making great products.
What Apple has become today, is a company that values and cares more about the details than they care about what Apple means in the abstract.
This is solely Tim’s fault – he should be setting the agenda to move forward, instead he’s letting Apple get bogged down in the details with different departments at odds with each other.
This is clearly illustrated by Apple, for all intents and purposes, operating a siloed business model.
I remember working for a company that operated like this.
The idea is that you task each department in your company with a set of goals, and the theory goes, if properly set and managed then each department doesn’t have to worry about the company as a whole, they just need to worry about their little bit of it.
So one department (or silo) is charged with keeping margins at a set rate, another department is set keeping quality control to the agreed level etc.
What this ends up with though is a spreadsheet.
These departments end up obsessing over a single number in their spreadsheet.
In the company I worked for, these departments had this percentage on a white board and OMG were people in trouble if it went above 5%, or below 2% or some other meaningless operator.
Staff only vaguely knew why that was important – even the manager it seemed. All that mattered was the percentage.
This is where Apple is currently.
The decision to keep old hardware around, even if it confuses the marketing message and makes the product line impossible for a customer to understand does not matter.
All that matters is that they keep this old, outdated hardware around so as to maintain the margin.
Look at the iPad, keyboard and pencils – the sole reason it’s such a mess, is because of Apple’s obsession with margin.
The decision to release your entry level Mac’s with 8gb RAM and a 256GB SSD, which will seriously affect negatively your computing experience, is a margin decision.
The reason why Mac’s are stubbornly high in price is because of Apple’s obsession with margin.
The reason why Mac’s upgrade prices are so high (hundreds of pounds for 8gb memory upgrade) is because of margin.
The reason why Apple struggles so hard with getting into gaming, is because they don’t sell enough Macs for game developers to get interested, and this is because of Mac prices being so high and that’s because of margin.
If Apple was serious about gaming then the entire company would be behind it – individuals clearly are, but as a company they’re demonstrably not.
If you’re serious about gaming, you wouldn’t be releasing your base level hardware with 8gb RAM and a 256gb SSD with upgrades being borderline exploitative.
If you’re serious about gaming then your Mac App store wouldn’t be selling Tomb Raider 2013 for £29.99, whilst it’s less than £5 on Steam.
If you’re serious about the education market, then you’d release a comprehensive ecosystem, backed up by rock solid iPads that were competitively priced with Chromebook’s. Apple isn’t and actually can’t do this because of margins.
This obsession with margins is damaging to the company’s growth.
And that is because the siloes in the department don’t care about education, gaming, or selling more Macs, or creating great products – all they care about is their silo and their little spreadsheet.
Tim and the board? Well they don’t care, all they care about is all their little siloes making sure that their spreadsheets are all hitting their targets.
Tim’s job is to steer the ship into uncharted waters, but he’s down in his bolthole, looking at the numbers, because if the numbers add up – he must be doing a good job – right?.
Now, I’m not saying that margin isn’t important, it clearly is, but if your myopic obsession with margin is damaging the brand (and now sales it seems), then Tim needs to seriously stop looking at his spreadsheets, take a long walk and have a good think about what Apple is trying to do.
He’s made Apple employees lose sight of what it all means and what they go to work for.
To create insanely great products that people want to buy.
iOS, macOS and the percentages…
I remember when the Mac first replaced what came before it.
Before the Mac was invented, my profession was totally different. I stood up for a start, and produced my work using rotring pens, white boards and pasted on typeset copy.
It was a physical job, you interacted directly with the content you were creating, keeping your working area clean and your camera work perfect was a daily job.
Then, slowly the Mac started to encroach – as it’s technology improved so the gradual takeover began.
No-one really noticed (it took years) and initially the outputted type from the Mac, worked alongside the traditional skills of pasted up copy, rotring pens and the like.
But as the Mac speeded up, the OS improved, the connectivity worked, it made more and more sense that work started to be completely done on that tiny, 8″ black and white screen.
Today, no-one would even attempt to to manually paste up work, it’s gone, forever, replaced by a perfect symbiosis of hardware, input mechanics, network infrastructure and software.
But technology doesn’t stand still, the next big thing is just around the corner, according to Apple.
iOS and the iPad is that next big thing, the perfect expression of Steve Jobs’ vision of computing.
I would agree to this statement, generally.
The iOS/iPad is the next logical step, remove the input mechanic completely and interact directly with the content you are creating, just as we did all those years ago before the Mac was envisaged.
The problem is, iOS and iPad just aren’t ready to take over, not yet.
But Apple’s not having that – the mantra is that for 80%, 90%, 95% (insert your percentage of choice here) of your job, the iPad is all you need.
But that’s not good enough.
Think back to when the Mac was postulating the same question – it didn’t replace the traditional techniques straight away, it augmented them and helped them, until it was ready.
So you needed more than the Mac, you need a Mac and also all the expensive traditional equipment also, until, years later you could do ALL your work on the Mac (not just 90% of it).
The same is true today – yes, I personally could probably do 50% of my work on an iPad.
You may be different, I’m a graphic designer, but if you were a writer or novelist, you could do a very high percentage of your work on an iPad.
But until it’s 100%, you need an iPad and a Mac.
Even if you can do 99% of your work on an iPad, you need a Mac to do the 1%.
If you already have a Mac then the investment is not so bad – you can work on the iPad, and keep the old Mac lying around for that 1% until at some point in the future you can put that Mac in a draw and embrace the glorious future.
But that’s a very expensive 1% if you’re buying new.
If you’re buying new today and someone says you can do 90% of your work on an iPad, you need to also buy a Mac to do the other 10%.
If that’s the case, you’re better off buying a Mac only – you can do 100% of your work on it today.
So my point is – Apple’s has the wrong approach and it’s the reason why the iPad isn’t as successful as it could be.
They need to (internally) plan for the Mac’s eventual demise, but until the iPad can do 100% of the work, it needs to support the Mac, work alongside it and be developed with it in mind.
Currently it looks like Apple is two companies, each pulling in different directions.
If they do this, then the iPad’s future is assured, but I will miss that perfect symbiosis of hardware, input mechanics, network infrastructure and software – the Mac.
Let there be an [aluminum] iPhone…
Apple iPhone version 1…
And Then Steve Said, ‘Let There Be an iPhone’
A very long, but rewarding article about what led up to the release of the iPhone.
Some great quotes in here and it shows that Apple really was betting the farm on this product.
I very much doubt now that Steve is gone, there is anyone with the drive and foresight to do this again.
But with most of the world’s money in their bank account, they shouldn’t need to do that.
However, out of the entire article, one thing stood out for me – and it’s nothing to do with the iPhone per se.
The second iPhone prototype in early 2006 … was made entirely of brushed aluminum. Jobs and Jonathan Ive, Apple’s design chief, were exceedingly proud of it. But because neither of them was an expert in the physics of radio waves, they didn’t realize they created a beautiful brick. Radio waves don’t travel through metal well. “I and Rubén Caballero” — Apple’s antenna expert — “had to go up to the boardroom and explain to Steve and Ive that you cannot put radio waves through metal,” says Phil Kearney, an engineer who left Apple in 2008. “And it was not an easy explanation. Most of the designers are artists. The last science class they took was in eighth grade. But they have a lot of power at Apple. So they ask, ‘Why can’t we just make a little seam for the radio waves to escape through?’ And you have to explain to them why you just can’t.”
This surprised me, (and it also must be a very stressful job being an engineer at Apple.)
A good designer should know all this.
A good designer should understand every aspect and limitations of what they are designing, before they put pen to paper.
A good designer is not concerned with just how it looks, BUT HOW IT WORKS.
I’m semi-quoting Mr Ive here.
It seems that the designers at Apple, who in most cases trump all other influences, aren’t as good as they say they are.
They are just concerned with how things look, not how they actually work.
Jony Ive let the designers under his control waste time in designing something that could not exist in the real world.
That’s not an industrial designer, that’s an arrogant artist with no concern of how the products he designs are used.
Does that ring any bells?
Tims selling the iPadPro
“Thrilled to spend some time with the incredibly talented @JulienFournie, whose exquisite new collection was created with iPad Pro.”
So Tim’s talking up the iPadPro.
In the wake of poor iPad sales, and the lacklustre sales of the iPadPro in particular, Tim Cook is talking up the iPadPro on Twitter, showing everyone that there is someone who’s using it and nothing else to create their, well, creations.
Apple certainly isn’t giving up on their mantra that the Mac is the past, and the iPad is the future.
Except he’s not actually saying that is he?
He’s saying that the iPad isn’t the future – it’s the now.
You can ditch all those old doorstop PC’s and iMac’s, and MacMini’s with your silly mice, hardware keyboards and ‘pointers’, and do all that on an iPad.
Except you can’t – not yet.
I can’t give up the Mac and I bet you can’t either.
Pro apps, access to file systems and other storage media, larger screens etc, these are all things that are lost on Tim.
I’m not saying that at some point a rich multi-touch OS on a huge screen isn’t part of our future, I know it’s coming.
But to neglect the computer system that you’re trying to replace (the Mac), whilst your replacement has serious shortcomings is arrogant, shortsighted and plainly a bad business decision.
We need a ‘cross-over’ period where the Mac and iPad coexist, until the iPad is the computer system we all want it to be.
We can’t simply put our Mac’s on eBay and turn to the iPad. At least not yet.
The iPads future
Many years ago, back before Steve returned to Apple, he was asked what he thought about Apple, the Mac and what he would do to ‘save’ it.
If I were running Apple, I would milk the Macintosh for all it’s worth and get busy on the next great thing. The PC wars are over. Done. Microsoft won a long time ago.
This was 1996 and it’s tempting to think that the iPad is envisaged by the current incumbents, as the next great thing.
But Apple’s own sales figures say otherwise. As Marco’s article points out, it’s been 7 years and sales peaked 3 years ago.
Many have said that the lacklustre figures are due to the buying cycle, i.e. the iPad is more like a computer than a phone and has a 4-5 year replacement cycle.
I’d tend to agree – I still use an original iPad mini, and although it’s a bit slow, in all other regards it’s fine for what I use it for.
Right there is the point – what you use it for.
The reason why the iPad’s sales are poor, is because despite Apple’s efforts, customers aren’t using it as their main computing device and replacing their ‘trucks’ with them.
Customers have a habit of doing that – they tell you how they use your product, not the other way around.
You’d think Apple would realise this and act accordingly, as they have had their fingers burnt with the Apple Watch.
The initial launch pushed the device in one direction, but after the data came in, version 2 changed direction and concentrated on fitness.
So why don’t they do this with the iPad?
Accept the way customers want to use it and build on that?
Instead of listening to customers, their answer has been, “we will just make it more pro” towit, a ‘pro’ version and pencil input.
And still sales fall.
There’s a simple dynamic at work here. Customers would accept the iPad as their main computing device, if the Mac (or the Windows PC for that matter) didn’t exist.
But they do.
Any, (and I do mean ANY) task is easier, quicker, more efficient and less frustrating to do on a device that has a big screen, a keyboard and a mouse.
We really did hit gold here. A screen, keyboard and mouse is the answer, there is nothing better and the iPad will never replace them.
So what should Apple do with the iPad?
I do admit that a multi touch OS is the future, but something like the Microsoft Surface Studio is closer to that future than any current iPad.
But we’re not going to get there by simply releasing a hobbled device that can’t do any task better than the device it’s designed to replace.
When it was first released, the Mac didn’t replace the job that it now currently does.
It was a slow process, and it started by replacing the things it could do better first, and slowly adding, to the point where the entire design process was done digitally.
It took years, partly because of technological constraints, but also because you had to prove to the consumer that the Mac was better.
The iPad needs the same approach.
In order to replace the Mac, it has to work alongside it, helping it do certain tasks, replacing jobs that the Mac did because it can do them better.
Here’s a few examples:
Why can’t I attach a written note to a folder on the Mac? This is something I would literally do dozens of times per day and would help me immensely.
Why can’t I draw alterations on a PDF that’s on the iPad screen and have this mirrored on the Mac’s screen?
Why can’t the iPad see the Macs file system and open files from the Mac?
Why can’t I start a design on the iPad and then throw it to the Macs screen? Adobe has shown Apple the way here.
If the iPad worked with the Mac instead of trying to replace it today, Apple would have a better chance of of being part of the future of computing.
If they don’t, by the time they get their Microsoft will have beat them to it.
The Mac at work . . . 