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Apple’s September 12 Event: Bracing For Another Disappointment
by Olivier Blanchard | August 31, 2018

I’m not an Apple hater. If I am tough on Apple, it is mostly because I expect a lot from Apple, as should we all. As a long-time Apple user and observer, I feel that Apple is at its best when it pushes the boundaries of what was thought possible in tech and design. It is at its best when it takes on the status quo, when it changes everything, when it leaves everyone else in the dust. Apple’s success was built on being and thinking “different,” on cutting its own path and challenging other tech companies to keep up if they could. That’s Apple’s brand, and it is the reason it is still such a global superstar among brands.

But for a few years now, it hasn’t really felt like Apple is still about that. Innovation, risk-taking, and the obsessive attention to detail that used to characterize Apple products and the Apple experience appear to have taken a backseat to more traditional corporate objectives: Growth, margins, and investor expectations. And to be fair, there’s nothing wrong with growth, margins, and making your investors happy. It’s just that for most companies, and especially Apple, if hitting your financial targets comes at the cost of no longer producing the most innovative, exciting, and best-in-class products you built your entire brand on… well, that’s just the sort of thing that people are going to notice.

For a lot of companies, incrementalism isn’t a bad thing. Improve operational efficiency here, penetrate a new market there, acquire this and that company, and you can somewhat safely engineer fairly consistent YoY growth. 6-12% YoY growth for an engineering firm, an IT services provider, a grocery store chain, a specialty retailer, or a nuts and bolts manufacturing business is solid. It takes a lot of hard work to keep that up and make that happen. It takes a lot of selling, a lot of late nights going over the books, a lot of sweat and dedication. But for companies whose bread and butter happens to be disruptive innovation – companies like Apple, Samsung, HP, Sony, Dell, Microsoft, Google, and Amazon – incrementalism is, at best, a baseline. It can’t be the heart of an overall product strategy. In the age of technology disruption, incrementalism at a tech company, and especially one with a consumer-facing focus, is a killer. Microsoft and IBM are among the companies that learned that lesson the hard way, and turned their business models around. Apple, on the other hand, still seems stuck in an incrementalist rut, and I am worried.

This year’s Apple “Fall Event” is scheduled for September 12, and I would be very surprised if the next iPhone and the next Apple Watch weren’t heavily featured. Rumors and leaks, as usual, are already making the rounds. And while I hope to be surprised and proven wrong, my expectations for Apple’s 2018 show-and-tell fall somewhere between zero and a thumbs-down emoji. I’m not happy about it. I would much rather be awed by Apple’s innovation and design Kung Fu. I miss the days when Apple’s “Fall Event” felt a little bit like Christmas morning. I just don’t think this year will be the year that Apple turns that corner.

Here is what I expect from the event: With regard to the new iPhone, another year of predictable incrementalism. Here’s my go-to template for all Apple product announcements now: “x% more [insert feature here].” That’s mostly it. We’re going on what… year three of this now? Year four? I’ve lost count. So on September 12, what I expect to hear between endless streams of flowery superlatives about the edge-to-edge screen that probably won’t be, and the mystical tactile poetry of the the premium materials chosen to contain iPhone’s soul, is something along the lines of x% more battery life, x% faster processing, x% more glass, x% brighter colors, x% better camera, x% more emojis, and on, and on and on. 10% more of this, 20% more of that. And that will basically be it.

Incrementalism taking the place of innovation.

Nothing will be said about iPhone’s painfully slow modem speeds compared to Samsung S9 and Note 9 phones, Alphabet/Google’s upcoming Pixel 3, and even LG, Motorola, and HTC phones sporting Qualcomm’s Gigabit speed modems. We’ll have to see if Intel’s new XMM 7560 modem will indeed turn up in the new iPhones, as has been rumored, and if so, how well it it will stack up against Qualcomm’s. Those are still two pretty big question marks.

With regard to the new Apple Watch, I expect a bigger body and screen, not because a bigger screen is better, but because if you are an Apple engineer, longer battery life requires a bigger battery, which in turn requires a bigger form factor, which in turn forces Apple to make the screen bigger. Add other features like better connectivity, which requires more space for antennas, and you can imagine how quickly form factors begin to grow in size. I expect that the watch’s x% thicker body and x% bigger face will be sold as a mix of functional and stylistic improvements (“a watch should have a little heft to it”), but as I see it, they are adaptations to engineering changes, not design aesthetic-driven decisions. At any rate, the Apple watch will also come with its set of x% more of whatever. Battery, brightness, colors, water resistance, and so on, but I doubt that it will introduce any radically new (and useful) capabilities, like tracking blood oxygen saturation levels for instance, or empower users to dive deeper into the monitoring and management of their own health, which is where I think the Apple Watch could really shine.

Incrementalism again. Or maybe not. We will soon find out.

As for Apple TV and iPad, I don’t care. I stopped caring a year ago.

Meanwhile, Premium Android phones, most of which run on Qualcomm’s Snapdragon 845 mobile platform, have been running circles around iPhone lately. Sporting modems with blistering speeds, advanced AI features, scores of handy UI innovations, silky-smooth Bluetooth and wireless connectivity, best-in-class cameras, and noticeably superior battery life, to name only a handful of areas in which iPhone seems to have fallen behind other flagship phones, it is difficult not to notice just how much better Android phones have gotten in the last few years. And a little bird tells me that android watches are about to get a lot better too, so the Apple Watch may also find itself vastly outperformed before too long. None of these things bode well for Apple. What is most tragic about this is that it doesn’t have to be this way. And we didn’t get here overnight either. Apple started losing this race one year at a time, starting around 2012 or 2013, and it hasn’t really stopped losing ground since. So here we are, in 2018, and unless I am reading these tea leaves wrong, things may be about to get even more challenging for Apple (and then some) if it doesn’t start picking up the pace, and soon. I don’t really understand why Apple hasn’t addressed this already.

 

I want to be wrong. I really do. It’s just that Apple hasn’t given me a reason to think 2018 will be any different from 2017, or 2016, or 2015 in this regard. It isn’t to say that 2019 or 2020 won’t be the year that Apple begins to truly innovate and disrupt again. I hope that day comes, and soon, but I don’t think it is going to happen this year. What worries me is that the longer Apple takes to find its old groove again, the less likely it is that it will. Habits are hard to break, especially bad ones, and Apple has been on this incrementalism track for a while now. It’s no longer a phase. It’s become an operational trait. Everyone should be concerned about that, especially when so many other technology companies have become so good at finding new ways to innovate, wow, and excite.

A friend of mine, a lifelong Apple fan, just switched from iPhone to the Note 9 two weeks ago, and he could not believe how much better, faster, cooler his Note 9 was compared to iPhone. He resisted the switch for years. “I’m an Apple guy,” he used to say. That may still be the case when it comes to laptops, but he’s a Samsung guy when it comes to smartphones now. It’s been over a week, and he’s still excited to show me all the things his Note 9 can do that his iPhone couldn’t. And he isn’t alone. He is just the latest of about two dozen people I know who have recently made the switch from iPhone to Android. (Most went to Samsung, and a handful went with the Pixel.) I don’t think they’re ever going back to iPhone. It would take an extraordinary event to make them give up all of the features and performance characteristics of premium android phones now that they have experienced them. As anecdotal as these examples may be, I don’t think they are isolated, and Apple should be worried. Very worried. I don’t know anyone who has made the switch in the opposite direction and came out the other side brimming with excitement and awe.

If my years as a product manager taught me anything, it’s this: When you’re a premium brand and the market leader, people expect your product to be the best. Having a great product (and iPhone is a pretty great product) isn’t enough. You’re either #1 or you’re losing. That’s why Apple can’t afford to be just “great.” iPhone has to be better than its competition. iPhone has to excite. iPhone has to outperform. iPhone has to be the gold standard. It can’t be an “also in” product. Same with Apple Watch and iPad and MacBook and iMac, and whatever comes next. Cartier should always be better than Casio. BMW should always be better than Toyota. And for the same reason, Apple should always be better than Samsung and HTC and Pixel. But it isn’t anymore, and every year that Apple falls back on the safety of incremental improvements to its aging product line becomes another year that Apple falls further behind the curve. And the way momentum works is, if everyone else is getting better and faster, and you aren’t, it becomes nearly impossible to gain back the time and yardage you’ve lost or squandered.  If ever there was a recipe for an incremental descent into irrelevance, Apple’s approach to product management in recent years is it. And yes, even Apple can fail. It can absolutely fail. It isn’t immune to any of the mistakes that could ultimately spell its end. Does Apple have more wiggle room than most? Yes. For years, it had wiggle room in spades. 100% earned too. But from where I sit, Apple may have burned through just about all of it at this point. With years of Jobs-driven momentum now gone, this next year may just be a turning point for Apple. Which way that turn goes still remains to be seen though.

Let’s revisit this on September 12 and see if I was wrong.

Cheers,

Olivier

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