Do you want to cut someone’s hair? Well, there’s a license for that, and even a test to demonstrate that you have a flair for scissors and combs. Certainly a lawyer can’t put up a sign on an office and defend you in case you get a traffic ticket, or are arrested and charged with committing a crime, without passing a bar exam to demonstrate their basic competence.

But if you want to advise people about whether a particular high-profile company stands to rise or fall, or just hang on, there’s really no need to prove you know what you’re talking about. If people read what you have to say, you’re hired. If you predict that a company will fail, and they actually succeed beyond anyone’s imagination, it’s not as if you will suddenly be called on the carpet to explain your failure to deliver.

At least it doesn’t seem that way. You hear the same old analysts plying their trade year after year, making unfounded pronouncements about all sorts of matters, and getting things wrong over and over again. But so long as people believe them, or at least read what they have to say, they keep their jobs.

Continue Reading…

Do you remember back in 1985 when some lame brained executives at Coca Cola decided that the soft drink’s famous recipe had to change? As you know, the unfortunate case of the “New Coke” is regarded as one of the greatest marketing failures of the 20th century. It didn’t take long before we had a “Classic” Coke that was basically the recipe we all knew and loved — well at least those who didn’t prefer Pepsi all along.

Now before I go on, it’s fair to say that major product changes aren’t always failures. Dominos, the pizza chain, redid the recipes and succeeded, largely because the original pies were never very good. People bought Dominos pizzas for convenience, not because they tasted so great. The result? The chain’s revenues went way up.

When it comes to our little technology corner of the world, some suggest Apple reinvents the wheel every so often, and that may be true with the iPod, the iPhone and the iPad, but the Mac of 2012 has an interface that still contains the core elements of the 1984 Macintosh. The fundaments of the point and click interface are still present and accounted for in OS X Mountain Lion, even if the the artwork has been modernized, and touch-related features have been added. What his means is that a Mac user from 1984, somehow taken on a voyage through time to 2012, should be able to become accustomed to today’s Mac rather quickly.

Indeed, Apple expects to keep the Mac separate from the iOS device, such as the iPhone and iPad, although some features and apps will be essentially the same on all three. That is, except for the requirements of a touch-based interface on the mobile gear, compared to the traditional keyboard and mouse on a regular Mac.

This is the reason why Tim Cook declared that Microsoft’s approach with Windows 8, delivering the same operating system on a traditional PC and an ARM-based tablet, is the equivalent of merging a refrigerator with a toaster. And, yes, it appears that Microsoft doesn’t see that distinction. They see the Mac becoming a bigger success, and Apple prospering in the mobile space. So why not give customers the same basic experience on both — hence Windows 8? If Apple takes you part way, Microsoft will take you all the way with Windows 8. Is that too much of a good thing? Or is it a good thing?

Now Microsoft is nothing if not persistent. The Metro interface of Windows 8 is not so far removed from the interface on the failed Zune music player. If you’re familiar with Windows Phone, you’re also familiar with Metro, although it’s also true that Windows Phone hasn’t quite been the raging success Microsoft hoped for.

So here we have Microsoft taking an interface designed for a smartphone, one that really hasn’t taken hold of the market, and grafting it on top of aging desktop OS for better or worse. Does that make any sense to you? To me, it would be akin to the management at Coca Cola taking New Coke recipe, after that embarrassing failure, and adding it to all their other food-related products, hoping that if it’s offered everywhere, people will learn to like it.

But with Microsoft, if people don’t like Windows 8, other than disabling the theme, where would they go? Would they switch to a Mac? Well, I suppose Apple wouldn’t mind, except that such a move would require buying new software, or sidegrading from existing apps if the publishers have such a program. It’s not the obvious solution for businesses, particularly those struggling to stay in business during a difficult economic climate. The cheapest solution might be sticking with Windows 7, or even XP, as many still do.

Besides, I’m surprised Microsoft hasn’t considered the lessons of history. Aside from the inability of Metro to catch on so far, how can they possibly forget their previous attempt to make Windows seem warm and fuzzy, with a pathetic cartoon-like interface known as Bob? That was one monumental failure.

Now I suppose it is possible that, after the failures of Metro on other products, Microsoft may have built the silk purse from the sow’s ear with Windows 8. Perhaps the concept of an endless paper interface, chains and chains of square and rectangular tiles that fall off the ends of the display, will appeal to a large number of traditional Windows users, and thus will attract a huge number of upgrade orders. Maybe it won’t be the New Coke syndrome all over again.

But count me skeptical. Microsoft is already struggling to get business customers to ditch Windows XP and upgrade to Windows 7, and Windows 7 is actually a pretty decent operating system. Certainly it is far more secure than XP, and it’s not as if customers have to learn new skills, aside from ditching that dreadful ribbon. But Metro means the end of the Start menu and other Windows conventions. It’s not as if customers were necessarily disdainful of the old way of doing things, and you’d think Microsoft would want to make it easy for users to upgrade. Change for change’s sake doesn’t make a whole lot of sense.

Or maybe I’m wrong to be skeptical. Maybe Windows 8 will be the barn burner Microsoft hopes it’ll be. But that might be due more to sheer luck more than anything else if that happens.

In the days following Apple’s announcement of the second best quarterly earnings in the company’s history, the stock price predictably soared after taking a huge dive. This came in the wake of fears that wireless carriers may be revolting against the high subsidies they have to pay for an iPhone compared to the competition. Certainly the fact that smartphone activations were much lower at AT&T during the last quarter stoked some of those fears, except that 78% of those activations were iPhones. You’d think the other handset makers would be really frightened.

Certainly, the sales figures looked encouraging, since they mostly met or exceeded industry analyst expectations. Take the 35.1 million new iPhones sold in the March quarter. Yes, maybe sales slowed in the U.S., but they were going gangbusters elsewhere, particularly in developing nations such as China. Gone are the days when Apple would depend on the good old U.S.A. for the lion’s share of sales of Macs and mobile gear.

Now when it comes to a smartphone, you can expect that customers will upgrade every two years or so, depending on how quickly they can get out of their current wireless contracts without paying a fee. There are always going to be new customers, but at some point in time, most of the people who want smartphones will have them. Since the iPhone earns the highest customer retention rate in the industry, Apple can be assured of continued high sales of replacement units, but with a flattening growth curve as the market becomes saturated. That, of course, depends on continuing to deliver compelling new models.

Obviously, I wouldn’t consider myself qualified to judge when iPhone overload might happen. As you recall, by the time iPod sales flattened, Apple was already on to the iPhone, so it’s inevitable there is a product waiting in the wings for when the iPhone market reaches its maximum potential.

With the iPad, it’s an all-new ballgame, as sales have already exceeded those of new Macs by nearly three times. Compared to traditional PCs, it puts Apple at the top of their game, as more and more people embrace the iPad. The potential appears to be huge, even though some industry analysts are saying that Android and forthcoming Windows 8 tablets will take greater and greater pieces of the pie. That, however, remains unproven. There seems to be little or no interest in Android tablets, except for the real cheap models for people who find paying $399 for the iPad 2 to be too daunting for them.

As far as the Amazon Kindle Fire is concerned, I actually ran into an owner the other day, to my surprise, a store clerk. Ever the inquisitive journalist, I asked her about the Kindle Fire, and she told me she got it to read e-books, and wanted something fairly cheap. The iPad wasn’t really on her radar. Typical of regular people, she doesn’t pay attention to online geek chatter, although I did suggest she take a look at the iPad at an Apple Store and see if that Kindle Fire was really ideal for her needs.

That doesn’t mean that she’d go out and buy an iPad the very next day. At the same time, we don’t know just how successful the Kindle Fire has been for Amazon, since they don’t break out numbers. If there’s a 2012 Kindle Fire, maybe an updated model or a version with a 10-inch screen will indicate the possibility that it has become reasonably successful. Amazon may also be basking in the potential glory of being able to fix e-book prices again because of the U.S. Department of Justice lawsuit against Apple and the two publishers that have not, as yet, agreed to a settlement.

For a few years at least, though, it seems that the iPad has the potential to grow by leaps and bounds if Apple doesn’t screw up.

When it comes to  the Mac, one reason not often discussed for the fact that sales only increased by 7% in the last quarter is cannibalization. Rather than buy a new Mac, it’s possible a fair number of potential customers went for an iPad instead. Certainly the fact that the Mac lineup hasn’t been refreshed in a while is another key reason. But I expect that to be remedied now that the Intel Ivy Bridge chips have begun to ship in earnest.

Indeed, you may wake up any day now to find a new Mac lineup announced in an Apple press release, or perhaps when you visit the Apple online store. Yes, there is a lot of life left in the Mac platform, given that they still aren’t so popular in some parts of the world. But the traditional PC lost its luster a while back.

However, the Mac is destined to become the next iPod, meaning a product well past its prime that will begin to cater to a shrinking user base. When that happens, though, more and more of you will have moved to an iPad or a successor product.

The future of Apple’s gravy chain, however, will depend on how quickly they move from aging technologies to the next great thing. Even then, growing revenue 50% or 100% each year clearly has a finite limit. It’s not as if Apple is destined to own the world some day.

If you follow such things carefully, you’ll notice that Apple’s stock has taken a huge beating in recent days, not because of expectations of poor sales in March financial quarter, but as the result of fears and, perhaps, profit taking. What fears? Well, consider AT&T’s report of a big drop in smartphone activations for the March quarter. On the other hand, 78% of those activations were iPhones, and it’s normal for sales to dip after the holidays. Besides, it’s not that AT&T is the only carrier to carry the iPhone. Worry instead about companies that make that other 22%.

The Wall Street freakout ended when Apple announced financial results for the March quarter that were second only to the December quarter in 2011 right after the trading day ended, predictably causing a big rise in the stock price in after-hours trading.

The results for Apple’s fiscal 2012 second quarter, which ended in March, resulted in a quarterly revenue of $39.2 billon, and a net profit of $11.6 billion, or $12.30 per diluted share. This compares to last year’s numbers of $24.7 billion revenue, and a net profit of $6.0 billion, or $6.40 per diluted share in the March quarter. Wall Street analysts had estimated Apple’s earnings at $10.02 per share on revenue of $36.9 billion.

“Our record March quarter results drove $14 billion in cash flow from operations,” said Peter Oppenheimer, Apple’s CFO, in a press release. “Looking ahead to the third fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $8.68.” Fans of Apple financial data can check their site for the raw numbers, and remember that future projections tend to be quite conservative. Apple never loses. Indeed, ahead of giving out modest cash dividends this summer, Apple’s cash stash now stands at $110.2 billion.

There were two clear winners in those results. Some 35.1 million iPhones were sold, an 88% unit growth over last year, along with 11.8 million iPads, representing a 151% increase. In contrast, industry estimates pegged the former at 31.2 million, and the latter at 11.9 million. Although estimates of iPad sales somewhat overshot the mark, chronic backlogs after the third generation model was introduced no doubt made it difficult for Apple to move more product. Indeed, Apple is still struggling to keep up with demand for the new iPad.

Mac sales, at four million, were somewhat less than expected at a time when there haven’t been any updates to the Mac lineup in a while. Some even suggest the Mac platform is getting reduced attention from Apple, although it’s also true that expected new models, plus this summer’s arrival of Mountain Lion, will surely increase potential sales. Besides, sales of the Mac were still 7% ahead of last year, coming at a time when PC sales overall remain relatively flat, with a 2% rise.

While Apple didn’t announce any new Macs, the arrival of the first wave of the new Intel Ivy Bridge chips signals model refreshes in the next few weeks. With the quad-core processors shipping first in quantity, the more powerful MacBook Pros, and perhaps the iMac, might get arrive first, followed by the entry-level MacBook Pro and the MacBook Air once the dual-cores are available in quantity. But this is strictly guesswork.

By the way, Apple attributes relatively flat Mac sales for the quarter to the fact that, in the comparable quarter last year, there was a major note-book refresh. When the next refresh arrives, don’t expect anything more than the usual press release.

Despite the ongoing problems with iCloud, Apple announced that the service now has 125 million users. When asked about customer feedback, Oppenheimer declined to provide that information, saying it would help competitors. He described reaction in general as “off the charts,” although most of you know that iCloud is rife with serious problems. I take it as hype and little more, or maybe I expect too much.

Indeed, as of today, I still cannot rate iCloud is quite ready for the world, despite more and more signups. My worst iCloud irritants include duplicate entries in Address Book, a problem that becomes worse when, after deleting a duplicate entry, it returns ghostlike. On occasion, I get iCloud login prompts on my iPhone 4s. Maybe demand is off the charts, as Apple claims. But it sounds to me as if the lingering problems are off the charts too.