THIS WEEK’S TECH NIGHT OWL RADIO UPDATE
One day, Apple is on top, next day the media, with the eager help of financial analysts, decided to declare the company dead and buried. Certainly the stock market has cooperated, with Apple’s stock sinking at surprisingly rapid levels, as if there was truly a problem with the company. But when you look at the sum of the parts, it’s hard to come to that conclusion, but I’ll have more to say on that worthy subject a bit later in this issue.
Meantime, on The Tech Night Owl LIVE this week, we explored the common sense reasons behind Apple’s earnings miss, how Wall has overreacted, and why some so-called industry analysts and tech commentators have totally misunderstood Apple’s real sales and prospects. You also heard some speculation about the form and substance of the next Mac Pro, and where Apple’s TV initiative might go.
Our guests included John Martellaro, Senior Editor, Analysis & Reviews for The Mac Observer, and Peter Cohen, a co-host of the “Angry Mac Bastards” radio show and Executive Editor for The Loop.
Now when it comes to Apple TV, the growth of the product, with just about no promotion, is impressive. Consider that as many units were sold in 2012 as in all previous years. But, despite broad hints of intense interest in the living room and reforming the TV, Apple’s end game still remains elusive. TV set or TV box? Or none of the above?
On this week’s episode of our other radio show, The Paracast: Gene and Chris present a special roundtable discussion featuring four long-time listeners who have been active participants in our forums, known by their member names: Gordon (Goggsmackay) Dean (Pixelsmith), Jeff (Sandanfire), and Randall (Ufology). We’ll focus on their views about the best/worst shows, personal paranormal experiences, and they’ll even get a chance to ask us a question or two.
Now Shipping! The Official Paracast T-Shirt — Now with New Design! We’re taking orders direct from our new Official Paracast Store, where you can place your order and pay with a major credit card or PayPal. The shirts come in white, 100% cotton, and feature The Paracast logo on the front. The rear emblem states: “Separating Signal From Noise.” We’ve also added a huge selection of additional special custom-imprinted merchandise for fans of our show, along with a redesigned storefront.
In the 1980s, when I first started using Macs, I made a practical decision. My employer was moving from traditional typesetting to desktop publishing. The Mac owned that market, and thus management bought a few systems initially as a test. Over time, however, the realized they had made the right choice, since the company was able to survive a major turnover in the prepress industry and, in fact, still exists.
Having learned the ropes, I purchased my own Mac system, with color display, a laser printer and all the bells and whistles. I used it not for gaming, but for business, to edit and prepare a magazine for printing, and run my own desktop publishing business on the side. For my needs, at least, I had made the right choice.
But whenever I ventured into the outside world, it almost seemed as if I had stumbled upon a dimensional portal and had entered another universe. In that universe, the Mac did not exist, and everyone who wanted to do “real” work on a PC bought a box running a Microsoft operating system. Buying software for Macs proved difficult or impossible, unless you went to the few places where the Mac was front and center.
Now my personal story is complicated, and I’ll be brief. My interest in Macs expanded to support, and writing about personal technology. I used those experiences to help me write a number of books and magazine articles, but I also increased my exposure to the Windows platform to improve my prospects for additional writing assignments.
In those days, Apple was consigned to niche status, and I can’t tell you how many times the media declared the company irrelevant, and fated to be dead and buried real soon now. I could see where Apple’s product lines had become cluttered, and the Mac OS had become less stable. Had Apple lost its edge?
When Steve Jobs returned, he had learned many important lessons during his years of exile, and had become a skilled executive who was able to hire the right people to create a revolution. But nearly everything Apple did was met with extreme skepticism by some elements of the media, and particularly industry analysts who couldn’t hide their Microsoft bias.
The iPod? An overpriced toy? The iPhone? How could Apple possibly believe that they could enter a market in which they had no expertise and somehow deliver a relevant product? Indeed, in introducing the first iPhone in 2007, Jobs expressed modest expectations for its success. He would be happy if Apple could get just one percent of the global mobile handset market by the end of the following year.
Maybe he didn’t want to raise your expectations too high, though that was never his way. That the iPhone has become a number two smartphone around the world in comparison with the number one company, with a substantially larger handset lineup, ought to be considered a miracle. That Apple earns in the neighborhood of 75% of the profits in the industry ought to earn some real respect.
But it doesn’t.
Buttressed by an unconfirmed rumor about a substantial cutback in orders for iPhone 5 displays, and the unwarranted assumption that demand had collapsed, the “Apple is dead” meme has resurfaced, only it always lurked below the surface. As Tim Cook said during last week’s conference call with financial analysts, you can’t use one metric, or data point, to judge the company’s success or the demand for its products, but few paid attention.
So we have the curious situation where Apple reported record revenue for the December quarter, only slightly below analyst expectations despite severe constraints on delivery of several key products. But Wall Street wasn’t impressed. Profits were relatively flat in a quarter that was a week shorter than the previous year. But those profits were roughly 50% higher than Samsung, which reported a couple of billion dollars lower sales than Apple.
Despite warnings of reduced profits in subsequent quarters, Samsung was praised, while Apple was attacked for achieving better performance.
Now I’m not about to suggest there’s a media conspiracy against Apple, nor would I suggest the financial community wants Apple to fail for some reason. The real problem may be expecting too much. Clearly Apple cannot continue to grow at previous levels without running out of customers on this planet. Since you can’t expect Apple to expand their business to another planet, a little sanity is called for.
What’s more, the people who demand that Tim Cook be fired for, well, being successful, aren’t really clued in about what’s going on. This doesn’t mean Cook has clear horizons ahead. He is under severe pressure to demonstrate Apple hasn’t lost its mojo, and that will mean achieving ongoing revenue improvements, and the release of exciting new products throughout 2013. If there’s a real, and not imagined, miss, Apple will suffer accordingly.
Even if Apple stays the course and continues to execute well, it may not matter. Some people will still complain that the company is on the skids, and it’s time to call it a day. These are the people who are best ignored because they are clueless.
SO WHAT’S THE NEXT ACT FOR THE TV INDUSTRY?
Even as Apple’s plans for the TV market remain foggy, but ripe for speculation, it’s clear TV makers are trying harder and harder to get you to replace that old set in a highly saturated market. How well they succeed may determine the future direction of the industry.
Here’s my personal situation: I have a five-year-old Panasonic 50-inch plasma. Except for a failed power supply a little over a year after I bought the set, it has worked perfectly. It has also survived two moves without damage, which may be amazing in itself, although that’s simply because I made sure the moving companies were careful about packing the set.
Now my TV sits at the lower end of the Panasonic lineup, one of the cheaper models with 1080p resolution. The money I paid for this set would, today, get me a 55-inch plasma with 3D, “smart” apps and all the bells and whistles from the higher end of a company’s product line. That is, if I were in the market for a new set.
Indeed, the price of admission for a really high-quality plasma or LCD set has dropped considerably. Picture quality has continued to improve overall, and it’s really hard to get a bad set from any maker nowadays. A TV is more of a commodity than ever, but manufacturers are working hard to differentiate their products from the pack, and convince you that it’s time to upgrade.
One way is to add apps for various TV streaming services, such as Amazon, Hulu and Netflix. So if you tire of cable and satellite fare, or just want to cut the cord, you have an alternative. Even low-cost sets have built-in Wi-Fi, so you can get online easily without the need for an Ethernet cable or some sort of adaptor. After a strong effort to push 3D on you following the success of “Avatar,” that feature has moved to the lower end of the line, but few use it. There’s not much 3D content, and the need to wear either active or passive glasses may be uncomfortable for many people. Until there’s an effective and low-cost scheme to generate first-rate 3D pictures at a wide viewing angle without the glasses, I don’t see this technology going anywhere.
There’s also something called 4K, which you might regard as the Retina display equivalent for a TV set. From the CES demonstrations I’ve read about, it appears 4K picture quality is truly magnificent, assuming there’s actually 4K content to watch, and that’s going to be difficult to do online since bandwidth for regular high definition content is already constrained. The same is true for the cable and satellite companies. They are already compressing the signals to a fare-thee-well to cram more content into the same space.
Unfortunately, at normal viewing distances, 4K may not represent the night and day difference you might expect. Such sets are also quite expensive, and thus they’re only on the radar for the 1%, although that’ll change as production techniques and quantities improve. There’s also OLED, a display technology that supposedly offers all the advantages of LCD and plasma, but the price of admission is also extremely high for large screen displays.
The new 55-inch LG OLED, for example, offers what is reportedly a great picture with a screen that’s a mere 4mm thick, thinner than the 2012 iMac, and weighs less than 20 pounds. Interested? Prepare to pay over $10,000 in South Korea, and $12,000 in the U.S. when it goes on sale.
Will OLED make it to the masses? Well, the technology has been around for several years, and it’s still extremely expensive. At the same time, the mass market technologies just keep getting better and better. Plasmas use less power and deliver brighter pictures with fewer reflections. LCDs, with LED backlighting, produce better blacks at wider viewing angles than older models, coming closer in that respect to plasma.
And did I say the prices are relatively cheap?
The other day, one of the guests on my tech show mentioned getting a perfectly good 32-inch set for $200. Although there are high-end models selling for over two grand, particularly when you get a display that’s over 60 inches, the sweet spot is under $1,000. And since a well-designed set lasts for a decade or more, where’s the rush to upgrade?
If you have a five-year-old set, as I do, will one of the current models deliver picture quality that’s really that much better? Forgetting 3D, wouldn’t an Apple TV or Roku box be sufficient to get you the streaming services you want?
These are questions I’m going to attempt to answer over the next few months as I continue to look at current models. I may even review a few, depending on which manufacturers are willing to cooperate with sets to evaluate.
And, in the background, Apple looms threateningly over other tech companies with their plans to expand their reach into your living room. An Apple branded TV set, or just a souped up Apple TV box? The answers still aren’t clear.
THE FINAL WORD
The Tech Night Owl Newsletter is a weekly information service of Making The Impossible, Inc.
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