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The cracks are starting to show at Apple

Me-too products, deviations from Jobs’ philosophy and lack of killer apps shows a deficiency of ideas.

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Apple Cracks:

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Apple unveiled a raft of new products at its annual post-Labour Day extravaganza on Wednesday, including new iPhones, iPads and a refreshed Apple TV. But if you read between the lines of each product announcement, you may be able to see the cracks starting to show at the company.

iPhone: The new 6S and 6S Plus house the expected updates, from better cameras and the ability to shoot 4K video to the addition of 3D Touch for more fine-grained tapping and typing.

The most important change comes in the way of pricing. U.S. wireless carriers are moving away from offering customers subsidies on their phones, in favour of instalment repayment plans. It’s a small change, but it’s making device prices more transparent. Rather than thinking they’re getting their phone for free, consumers will now be able to see exactly how much they’re paying for it by doing some simple math.

In response, Apple has rolled out its own instalment plan in the United States. If you want the base model of the new iPhone 6S, for example, it’ll either cost you $649 (U.S.) up-front, or $32.41 a month. Adding that up over the course of two years, you get $777. Either way, it’s a lot more than paying a carrier $199 up-front and pretending it’s free after that.

There’s an argument to be made that consumers will keep buying iPhones in droves regardless of cost because they represent value, but it’s equally possibly the new transparency is going to scare some people off. iPhone sales in the previous quarter were weaker than expected, which could mean Apple is already starting to hit the saturation point for how much people are willing to spend.

Apple TV: The new Apple TV is a welcome and long-overdue refresh, even if it is a more expensive version of the Roku 3. The new set-top box adds voice search, motion control and a touch pad at a starting cost of $149 (the Roku 3, which has all of that except the touch pad, sells for $99 in Canada).

The remote’s controls will allow for casual games to be played on the TV, similar to Roku and other low-end game consoles such as Ouya, or even Nintendo’s Wii. That ship, however, has sailed and casual TV games haven’t done well for anyone who has tried it. Could Apple be different? Perhaps, but it’s hard to see the market for casual games expanding much when more serious and superior Xbox and PlayStation consoles have the field covered.

The most important change to Apple TV is its opening to third-party developers. At the very least, this means apps such as Netflix, YouTube and Shomi will finally be able to update their looks and interfaces. At best, it could mean some developer somewhere thinks up some cool way to disrupt or innovate TV watching.

Whether that happens or not is an open question, but the more notable point is that a new Apple TV is coming without Apple having built its own killer app for it.

Imagine if Apple had debuted the iPhone back in 2007 without its own web browser, weather or email apps. Imagine if the company had depended only on existing third-party developers to show off its device at the time. The iPhone would have looked a lot like the hot mess that other cellphones were at the time.

Apple not showing off its own killer app for Apple TV is an admission that the company doesn’t have one, at least not yet. The fact that third parties haven’t developed one on other platforms, including Roku, perhaps signals that there isn’t one to be made, in which case the Apple TV will remain just a hobby rather than the major disruption Steve Jobs so famously promised.

iPad: Speaking of Jobs, it’s a well-known fact that he hated the idea of a stylus. Nevertheless, his successor Tim Cook on Wednesday announced the Apple Pencil, a $99 add-on for the 12.9-inch iPad.

Some commentators have written apologies on behalf of Apple for why Cook did so. In his various tirades against the stylus, Jobs was seemingly referring to it in the context of a phone and perhaps not with a tablet. In many ways, a stylus does indeed make sense for tablets, especially for creative uses such as drawing.

But Jobs seemed unequivocal in his hatred of them, suggesting that he opposed the idea of the stylus in all regards. It’s worth noting that he wasn’t in favour of bigger iPhones or smaller iPads, both of which Cook also introduced after his death.

In each of these cases, Apple has come off as pragmatic at best or as a follower at worst. Neither fits the character of the company that Jobs built. That’s fine – Apple can be a perfectly healthy and successful company on those merits, but pragmatism and following demand and competitors does not a leader make.

Apple Watch: Finally, Cook shared some stats about the Apple Watch, released in April, although not the numbers anyone cares about. Apparently, 97 per cent of Apple Watch buyers are satisfied with their purchase, which is akin to asking someone if they like wasting money or not. You kind of know what they’re going to say.

Various analyst reports have pegged sales of the watch as modest to terrible and Apple likes to tout sales numbers at its public events, so its silence on the matter can only be interpreted as bad news. The Apple Watch is Cook’s first new post-Jobs product category. Unless something unexpected happens, it’s becoming clearer that it really shouldn’t have been.

None of this is to say that Apple is going to be in trouble any time soon. With $200 billion in cash sitting around, the company can probably afford to coast until the sun burns out. But it is looking increasingly like Apple is leading the technology world by virtue of its sheer size, rather than by its great ideas.

That sounds a lot like what Microsoft used to be, which is ironic given that a representative from the software giant appeared on Apple’s stage on Wednesday to show off some new app functionality. Some day, it may be Apple paying similar tribute to some as-yet-unknown conqueror.

3 Comments on The cracks are starting to show at Apple

  1. I think there’s some confusion over the instalments – they have one plan for the phone outright, and one w/ yearly upgrades. I thought this was ridic too until I read closer – the outright buy version starts @ $27/m, whereas the yearly upgrade one starts @ $32.41. AFAIK you’re paying more for the early upgrade.

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