While Apple makes a huge deal of customer privacy and adherence to environmental standards, it may be, in part, a marketing ploy. After all, Apple is in business to make profits and add value to its stockholders. It is, after all, a mutational corporate powerhouse.
So after CEO Tim Cook delivered testimony to a sometimes-contentious hearing at the U.S. House of Representatives on July 29, developers began to speak out about policies that they felt were restrictive. It didn’t help that some internal email exchanges were revealed that revealed discussions about raising Apple’s cut of App Store revenue from 30% to 40%. A scandal! Or maybe not. After all, where are the emails about discussions on the part of Google and other companies that might have impacted the fees they charge? Did anyone bother to look for them? And if they did, where are they?
Besides, it’s not wrong for a company to look at different financial setups for products or services, even if some seem a little too greedy.
Sure if such a policy had been implemented, there would be reason to complain. But when it comes to the current setup, Google Play takes the same cut; why aren’t they complaining about that? This reminds me of the published reports complaining about alleged mistreatment of employees at Apple’s contract factories in Asia while ignoring the fact that other major players in the tech industry assemble their gear the very same way, at some of the same factories.
That doesn’t mean Apple doesn’t need to change. App Store policies are not as consistent as they should be, and developers still feel they aren’t getting a fair shake. It’s not as if they can just pack up and go elsewhere, anymore than dealers who depend on Amazon to manage their product sales can just choose someone else. With a developer there is only one app store for each major platform, and the profits and sales outlooks are far better at Apple.
Yes, I know that Android allows you to go to another app store if you want, but let’s get serious. The action is mainly at Google Play.
That said, Apple has long had a loyal customer base that has stayed with the company through thick and thin. And for many years, it was more on the thin side.
But in recent years, Apple has often confounded the tech industry and Wall Street analysts in general by beating earnings estimates. This was particularly true in their fiscal third quarter for 2020, where the consensus had it that Apple must be suffering due to the ongoing impact of the pandemic. How could it be otherwise?
Then came reality, as Apple reported earnings of $59.7 billion., up 11% from the year-ago quarter, when it rang up a record $53.8 billion.
I won’t bother to quote the rest of the financials, since most of you have read about it already. Long and short is that iPhone sales increased, largely because the iPhone SE helped provide customers with a low-cost upgrade path, and thus persuade people who’d held onto their devices to buy one. It also represented a highly compelling alternative for Android users to get with the program and switch.
With more and more people working at home, iPad and Mac sales increased by unexpected margins. I’ve had a home office since the late 1980s, so I understand its value, even if there might be complications to one’s lifestyle. That said, claims that Apple is a one-product company and that it’ll be on the ropes without regular iPhone growth, have been shown to be wrong. Apple clearly understands how to market services to its customers to keep income and margins high.
Indeed, one of the compliments — and criticisms — of Tim Cook’s nine years as Apple CEO, is that he is focused more on sales and profits. He lets others deal with cutting-edge technologies. But while some suggest that all of Apple’s new gear is iterative, there’s Apple Watch, which, after a shaky debut as a piece of jewelry, morphed into a fitness device. It owns the market for wearables and, in fact, has been credited with saving lives.
While I don’t have an Apple Watch yet — and my $12.88 Walmart watch’s band self-destructed a while back — I understand its appeal. I also find it surprising how many people own them, even the cashier’s at convenience stores that barely earn much above minimum wage. Clearly they’d have to save — and probably sacrifice — an awful lot to be able to afford them.
Apple’s foray into streaming continues to hold promise, even if subscription signups are far greater than Disney+. Not so long ago, it was suggested that Apple would do well to write a check and buy Netflix. Instead of being saddled with adding and integrating a huge company, Apple chose to roll its own, for better or worse. Remember, too, that the success of Apple TV+ won’t be obvious on the short term. As with Apple Music, it will take years to see how well it will fare.
Already there are reports that Apple may be planning to beef up its back catalog to give customers more stuff to watch.
Remember, too, that Apple has worked hard to make sure its services are available to a wide swath of smart TV owners, by licensing support for ApplePlay 2. Over time the Apple TV+ app will be included on more and more of these sets, tens of millions of them. So it seems to matter far less that the Apple TV set top box has just a tiny share of the streaming market. For most people, it’s not needed to get Apple content to your set, thus boosting the potential audience.
That said, my personal experiences casting ApplePlay 2 content to two different VIZIO M-Series TVs have been, at best, inconsistent. Sometimes they unaccountably lose the connection despite a solid WiFi signal, and the blame appears to be on Apple’s part.
Now when it comes to hardware, Apple is clearly spending billions to migrate the Mac to Apple Silicon. It is no trivial matter to move support from generic Intel CPUs and AMD GPUs to its own chips. Unlike other PC makers, however, processor transitions are old news for Apple. It was done in 1994 with the PowerPC, and in 2006 with adding Intel Inside.
So when Apple says the move to Apple Silicon will take two years, in other words until June 2022, the chances are that it’ll happen faster, perhaps by the end of next year. With the release of an iMac speed bump, there’s no pressure to upgrade that platform for a while. But I’m quite curious to see what form my next and possibly last iMac will take when it makes the switch. The present form factor has been around for some eight years now, and I expect a sleeker, lighter alternative is in the works. Maybe 27 inches will become 30 inches in a machine of roughly the same size?
In the meantime, folks expecting those recent hearings in Congress to hold a serious threat to the tech industry should temper their expectations. If change are warranted — and it would seem that the other companies have more to fear than Apple — it’ll take years to accomplish. Even then, don’t be surprised if Alphabet via Google and Facebook just the changes necessary to ward off any antitrust threats.
As to Apple, no the App Store won’t be spun off, although review policies might be less restrictive or more inclusive going forward.
If there’s anything troubling about the tech industry, it’s the fact that they can still ring up huge sales and profits while the rest of us continue to struggle to pay rent and buy food.
THE FINAL WORD
The Tech Night Owl Newsletter is a weekly information service of Making The Impossible.
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