The Talk Show

00:00:00 ◼   ► Hey john mg. Seaguller. How you doing?

00:00:04 ◼   ► Good. It's been a long time. I know months. I feel like I

00:00:09 ◼   ► strongly suspect, but I would never be as industrious as to

00:00:14 ◼   ► actually check. But I'll bet this is the longest stretch

00:00:17 ◼   ► you've been without being on on the show. I think so. I think

00:00:20 ◼   ► that's right. But you know, I live in London now, so that's

00:00:23 ◼   ► part of the reason. Yeah, that is. It makes it a little bit

00:00:25 ◼   ► harder to communicate. Yeah, it's funny because it's going

00:00:28 ◼   ► back to back. It's uh last episode was Ben Thompson who's in Taipei and now it's you

00:00:35 ◼   ► in London. So I feel like I've gone around the world.

00:00:38 ◼   ► You have a very international audience hopefully.

00:00:43 ◼   ► Yeah I don't know that it could I honestly think it I um maybe somebody in New Zealand

00:00:49 ◼   ► or something could be further away but that's it's about as far away as as people can get.

00:00:55 ◼   ► Well this is much better you know normally I have to talk to the west coast and that's

00:00:58 ◼   ► eight hours. And so that keeps me up, you know, 1 a.m., 2 a.m. for those types of calls.

00:01:03 ◼   ► Yeah, I'll bet that that's actually pretty weird because I do feel like being a lifelong

00:01:08 ◼   ► East Coast U.S. person, I feel like Greenwich Mean Time isn't that far away. But for someone

00:01:18 ◼   ► from the West Coast, it truly is. It's an entire eight hours.

00:01:22 ◼   ► Yeah. We'll see how I'm going to watch the Super Bowl. I think it starts at like

00:01:27 ◼   ► 1230 or so maybe 1130 p.m. and then it's gonna go obviously till like 2 30 a.m.

00:01:34 ◼   ► obviously they have a lot of different bars and stuff set up over here to show

00:01:38 ◼   ► it but it will be weird because it's in it's in Arizona right so is that West

00:01:42 ◼   ► or is that it's either Western Mountain time but yeah Arizona is definitely West

00:01:47 ◼   ► Coast time okay I think definitely but isn't Arizona one of the no or is it New

00:01:53 ◼   ► Mexico. That's like one of the like a holdout on. Yeah, one of those does not do it. And

00:01:58 ◼   ► then Vegas does it weirdly like they sometimes are on one time zone, sometimes on another

00:02:03 ◼   ► or something like that. Yeah, well, they legislate it in Vegas that there's no clocks anywhere.

00:02:09 ◼   ► Like a lot of you have to like hide your watch when you get to the airport there. They'll

00:02:12 ◼   ► confiscate it. That's right.

00:02:17 ◼   ► So the big news this week, I feel like we have to talk about it. I can't skip it, is

00:02:23 ◼   ► is the quarterly results from Apple.

00:02:26 ◼   ► - Yes, how do you miss that?

00:02:29 ◼   ► - And it's like, I know I'm not a finance blogger.

00:02:33 ◼   ► I try not to overemphasize it, but I feel like in this case,

00:02:37 ◼   ► it's so outlandishly exceptional that you can't help

00:02:42 ◼   ► but talk about it and write about it

00:02:44 ◼   ► and make links to it and stuff like that.

00:02:47 ◼   ► - Yeah, it's insane.

00:02:47 ◼   ► I remember, I guess it was a couple years ago probably

00:02:51 ◼   ► when I was obviously still with,

00:02:53 ◼   ► maybe it was three years ago then

00:02:54 ◼   ► when I was still with TechCrunch,

00:02:55 ◼   ► and I was obviously doing a lot of the coverage

00:02:59 ◼   ► of the Apple earnings, and each subsequent year

00:03:03 ◼   ► they would go up and up and up,

00:03:04 ◼   ► and one of the years it was like insane.

00:03:07 ◼   ► It was like they made $13 billion in profit

00:03:09 ◼   ► in the holiday quarter,

00:03:10 ◼   ► so it was either two or three years ago,

00:03:12 ◼   ► and it seemed like a time like wow,

00:03:15 ◼   ► I mean that's amazing.

00:03:16 ◼   ► It's sort of in that time when the margins

00:03:20 ◼   ► were still very, very high, and then everyone was thinking

00:03:24 ◼   ► that they were gonna start coming down

00:03:25 ◼   ► because of different products that were coming out

00:03:27 ◼   ► in the future, iPad and whatnot,

00:03:29 ◼   ► and so it seemed like the 13 billion

00:03:31 ◼   ► might be a high watermark, and now, you know,

00:03:34 ◼   ► that's just been totally obliterated by this quarter.

00:03:37 ◼   ► - The thing that comes to mind for me,

00:03:39 ◼   ► I keep thinking about it.

00:03:40 ◼   ► I don't know why, 'cause it's not like

00:03:43 ◼   ► it's a particularly even number of years,

00:03:46 ◼   ► but four years ago was the debut,

00:03:49 ◼   ► oh, I guess it was five years ago. No, so it is kind of, it's a half decade. So five years ago,

00:03:53 ◼   ► 2010 was when the original iPad came out. And I remember there were two things about that

00:04:00 ◼   ► keynote that stand out to me, and it's not the iPad in particular, but it was, that was when

00:04:06 ◼   ► they introduced the A4 system chip. And I remember Steve Jobs being very, very proud of it.

00:04:12 ◼   ► And in hindsight, it wasn't that great of a chip, but I feel like the reason that he was bragging

00:04:18 ◼   ► about it. In hindsight was that he knew the pipeline of the A5, the A6, like what they

00:04:24 ◼   ► were planning to do year after year and how they were going to take control of their own silicon

00:04:28 ◼   ► in the years to come. And the other thing I remember, do you remember this? I think that was

00:04:33 ◼   ► the event. I'm like 98% sure that it was the event where he mentioned that Apple was now a $50 billion

00:04:39 ◼   ► a year company. Yeah, I think you're right. I do remember, I remember being at whatever event that

00:04:45 ◼   ► that was when he sort of highlighted that

00:04:47 ◼   ► for the first time, I do remember that.

00:04:49 ◼   ► - Right, and he said almost the same thing

00:04:51 ◼   ► that I said here, is we don't wanna talk,

00:04:53 ◼   ► we have all sorts of products to talk about,

00:04:55 ◼   ► but I just wanna take a moment and just mark this,

00:04:58 ◼   ► that we're now, Apple is now a $50 billion a year company.

00:05:01 ◼   ► And sort of saying, that's the big boys' club

00:05:06 ◼   ► in Silicon Valley, $50 billion a year in revenue.

00:05:10 ◼   ► And they did 74 billion in revenue in a quarter.

00:05:15 ◼   ► (laughing)

00:05:16 ◼   ► - It's insane.

00:05:17 ◼   ► - Five years later, right?

00:05:19 ◼   ► Like, and it really was worth marking.

00:05:20 ◼   ► It really was remarkable, like five years ago

00:05:23 ◼   ► that Apple was doing 50 billion a year in revenue.

00:05:26 ◼   ► Like, that's a huge number.

00:05:27 ◼   ► It's a ton of money.

00:05:29 ◼   ► It's way more than Apple did, you know, for decades,

00:05:33 ◼   ► or ever, really, until then, ever.

00:05:35 ◼   ► And all of a sudden, that's, you know,

00:05:38 ◼   ► two thirds of one quarter.

00:05:40 ◼   ► I mean, what are they going to hit this year?

00:05:41 ◼   ► So everyone's obviously talking about,

00:05:43 ◼   ► in terms of earnings, in terms of profit,

00:05:45 ◼   ► they're actually, you know, they set the record.

00:05:47 ◼   ► They eclipsed all those oil companies,

00:05:49 ◼   ► including the Russian state oil company, you know,

00:05:51 ◼   ► in terms of the amount of profit they're making.

00:05:53 ◼   ► But they're also very much on track,

00:05:56 ◼   ► this being, you know, technically the fiscal quarter one.

00:05:59 ◼   ► They're very much on track to break

00:06:01 ◼   ► the all-time yearly record for that,

00:06:03 ◼   ► which is also held by all the oil companies.

00:06:05 ◼   ► There's an outlier, the Fannie Mae outlier thing,

00:06:08 ◼   ► which is on the Wikipedia page,

00:06:09 ◼   ► but that's with the government bailout and everything.

00:06:12 ◼   ► It's sort of not a fair comparison.

00:06:15 ◼   ► So they're probably gonna set that record.

00:06:17 ◼   ► And in terms of, yeah, revenue, yearly revenues,

00:06:19 ◼   ► what's it gonna be this year?

00:06:20 ◼   ► 200 billion, something like that?

00:06:22 ◼   ► Obviously this is the big quarter,

00:06:24 ◼   ► but then next quarter should be pretty big,

00:06:26 ◼   ► then it goes down a little bit,

00:06:27 ◼   ► and then it will spike up again,

00:06:28 ◼   ► sort of with back to school sales and everything like that.

00:06:31 ◼   ► I assume 200 billion, something like that?

00:06:34 ◼   ► - That seems within reach, definitely,

00:06:38 ◼   ► 'cause what, 40, 40, 40, you know, gets you pretty close.

00:06:42 ◼   ► - Yeah, that's so crazy.

00:06:44 ◼   ► And you know, remember, I guess it was a couple years ago,

00:06:49 ◼   ► I was also covering this, you know,

00:06:51 ◼   ► talking about Apple's market cap,

00:06:53 ◼   ► which you can also make an argument, you know,

00:06:55 ◼   ► isn't really, it's sort of symbolic

00:06:58 ◼   ► more than it's really meaningful

00:06:59 ◼   ► what market cap actually means,

00:07:01 ◼   ► and you know, people always argue about that.

00:07:03 ◼   ► It was a big deal when Apple, of course, passed Microsoft,

00:07:05 ◼   ► which was, I don't even know now, four years ago,

00:07:08 ◼   ► or maybe longer than that.

00:07:10 ◼   ► And then Apple was chasing Exxon for a long time.

00:07:12 ◼   ► And at one point, I remember they were something like $200

00:07:14 ◼   ► billion behind in market cap.

00:07:16 ◼   ► And it just seemed like impossible

00:07:17 ◼   ► that they would ever get there.

00:07:18 ◼   ► And now there's something-- they're over $200 billion

00:07:21 ◼   ► ahead of Exxon now.

00:07:22 ◼   ► They might be $300 billion ahead.

00:07:25 ◼   ► And obviously, Exxon's depressed because of the oil situation

00:07:28 ◼   ► going on, their stock is.

00:07:30 ◼   ► But it's incredible.

00:07:32 ◼   ► I think someone has been tweeting today and showcasing this,

00:07:37 ◼   ► that I think Apple's market cap is now just about

00:07:41 ◼   ► the exact same as Google and Microsoft's combined.

00:07:44 ◼   ► - That's insane.

00:07:45 ◼   ► Somebody tweeted, I saw yesterday,

00:07:48 ◼   ► this we're recording on Friday, January 30th.

00:07:50 ◼   ► So yesterday, I think at the close of market,

00:07:52 ◼   ► that Apple closed with, when the market's closed,

00:07:59 ◼   ► had exactly double the market cap of Google.

00:08:02 ◼   ► - Yeah, that's right. - So I guess that would

00:08:03 ◼   ► make sense 'cause Google's ahead of Microsoft now.

00:08:05 ◼   ► - And they're almost neck and neck.

00:08:06 ◼   ► They're like very close to one another.

00:08:08 ◼   ► So yeah, that's right.

00:08:10 ◼   ► - I mean, it's almost uncanny how close

00:08:12 ◼   ► to exactly double it was, which is,

00:08:15 ◼   ► - Yeah. - I mean, again, it's,

00:08:17 ◼   ► you know, in years past and probably years future,

00:08:25 ◼   ► when Apple's stock is down,

00:08:28 ◼   ► for reasons good or reasons nonsensical.

00:08:31 ◼   ► Like you said, it's not proof of anything.

00:08:34 ◼   ► It's not like market cap is an infallible measure,

00:08:38 ◼   ► but it's at least a measure

00:08:41 ◼   ► of what people think of the company.

00:08:43 ◼   ► - Yeah, and I mean, right now,

00:08:44 ◼   ► the craziest thing of all this is

00:08:46 ◼   ► you could make a very good argument

00:08:47 ◼   ► that Apple is undervalued on the stock market.

00:08:50 ◼   ► They're trading at multiples that are way below

00:08:53 ◼   ► what some of their peers are trading at,

00:08:54 ◼   ► given the numbers they just released. I mean, it's not so insane anymore to think that they could be the first trillion dollar company if they're able to sort of, I mean, we could talk about what it would take. It would take continuing to grow iPhone and I think we all agree now, you know, they can continue to do that. They don't have a massive market share still. So there's room for growth.

00:09:20 ◼   ► and then China, I think is the big sort of factor in that.

00:09:25 ◼   ► And if they can keep doing that and if the stock market overall keeps sort of going

00:09:30 ◼   ► up and there's no, you know, assurances of that, of course, it's possible.

00:09:35 ◼   ► It's crazy, but it's possible.

00:09:37 ◼   ► So the, I don't know if elephant in the room is the right analogy, but it's,

00:09:46 ◼   ► it's clearly largely almost two thirds three course three quarters driven by iPhone like iPhone

00:09:53 ◼   ► has become an enormous chunk of Apple's business the Mac is historically at an all-time high but

00:10:01 ◼   ► still that's you know that's an established market and it's you know four million five million units

00:10:07 ◼   ► a quarter iPad is down which is weird it's not collapsing you know I saw somebody call it gloomy

00:10:14 ◼   ► It's not gloomy. I mean, they sold 21 million iPads last quarter. It's just weird, though,

00:10:19 ◼   ► compared to iPhone because it's down 20 percent year over year. But iPhone is up enormously.

00:10:27 ◼   ► It's almost unbelievable how much it's up because I think it was 51 million iPhones they sold a year

00:10:34 ◼   ► ago in the holiday quarter and 74 million iPhones this year.

00:10:39 ◼   ► Yeah, yeah, I think it's if I read the numbers right someone broke it down. Maybe it's from her

00:10:44 ◼   ► I think they're at 69% the iPhone is 69% of Apple's business now

00:10:50 ◼   ► not sure if that's revenue or profit, but you know it's about it's it's roughly probably both and

00:10:55 ◼   ► It's probably higher actually for profit, but that's crazy

00:10:59 ◼   ► But you're right if you were just if you were to take of course the iPhone business away from Apple

00:11:07 ◼   ► They would still be near the top if not at the top of the biggest sort of business in

00:11:14 ◼   ► terms of revenue and then all of those other businesses, both the Mac, the iPad and even

00:11:20 ◼   ► in, you know, increasingly iTunes and the app store now are becoming the if you broke

00:11:25 ◼   ► those out, they would each like probably be Fortune 500 companies in their own right when

00:11:30 ◼   ► you think about it, which is crazy, right?

00:11:32 ◼   ► Because the store, you know, the iTunes store, whatever you want to call it, iTunes plus

00:11:36 ◼   ► App Store is some some number of billion a quarter now right yeah it's it just

00:11:43 ◼   ► keeps going up and remember they used to say specifically about the App Store

00:11:48 ◼   ► that you know it's it's basically they didn't use the word sort of loss leader

00:11:52 ◼   ► but they just said they run it sort of break even right and then they you know

00:11:57 ◼   ► it's it the whole thought was that it was just out there to sell sell devices

00:12:00 ◼   ► which of course you could still make the argument that's that's probably the

00:12:03 ◼   ► biggest part of it, but they're starting to make a lot of real meaningful money from that store.

00:12:07 ◼   ► Yeah, and I think it's always been the case, and this is from years ago when it was the numbers

00:12:13 ◼   ► were much smaller, where a lot of what they made was from the float where they collect the money,

00:12:19 ◼   ► and it doesn't, you know, they can do stuff with the money, you know, just, you know,

00:12:24 ◼   ► they hold it for a little bit, and while they're holding it, they can, you know,

00:12:28 ◼   ► do financial guy things with money.

00:12:33 ◼   ► Yeah, and make a little bit of money while you hold it.

00:12:36 ◼   ► Like, as that money passes through their fingers,

00:12:38 ◼   ► it's good for them because they don't immediately pass it on

00:12:43 ◼   ► to who they're paying out.

00:12:45 ◼   ► - Right, they get a little bit of what makes Amazon Amazon,

00:12:48 ◼   ► sort of that aspect of the business.

00:12:50 ◼   ► - Right, and anybody who's a developer knows

00:12:52 ◼   ► you don't get paid by Apple until the end of the quarter

00:12:54 ◼   ► or the end of the month.

00:12:56 ◼   ► They hold the money.

00:12:57 ◼   ► like you get paid every day as people buy your app,

00:13:00 ◼   ► you wait and then two weeks after the month is over,

00:13:04 ◼   ► you get your check from them.

00:13:05 ◼   ► In the meantime, they're holding that money

00:13:07 ◼   ► and making money on it.

00:13:09 ◼   ► And now that it's enormous sums of money,

00:13:12 ◼   ► it's even more so.

00:13:13 ◼   ► - Yeah.

00:13:14 ◼   ► What do you think about the notion of,

00:13:19 ◼   ► correct me if I'm wrong, but they,

00:13:21 ◼   ► when the Apple Watch is released,

00:13:22 ◼   ► so they announced, of course,

00:13:23 ◼   ► it's gonna be shipping in April,

00:13:25 ◼   ► when it's released, they're not breaking that out

00:13:28 ◼   ► as a separate entity, right?

00:13:30 ◼   ► That's gonna be roped in under something else,

00:13:33 ◼   ► I'm not sure what, other services or something,

00:13:36 ◼   ► but they're not gonna break that out in terms of sales,

00:13:38 ◼   ► at least to begin with, correct?

00:13:39 ◼   ► Is that what they said?

00:13:40 ◼   ► - That's what they've said.

00:13:41 ◼   ► - Yeah.

00:13:42 ◼   ► - And everybody's gonna try to backwards engineer it,

00:13:44 ◼   ► clearly, from the, you know, whatever,

00:13:47 ◼   ► wherever it is that they report it under.

00:13:49 ◼   ► - Right, I think that's, it's sort of interesting

00:13:52 ◼   ► to think about it because, so,

00:13:54 ◼   ► I know you and I know I and many others have long railed against Amazon for sort of not

00:14:00 ◼   ► being transparent with their numbers, whereas Apple is.

00:14:03 ◼   ► We still have no idea how many Kindles have ever been sold.

00:14:06 ◼   ► I think with this most recent quarter, which Amazon had, there was some hint that you could

00:14:11 ◼   ► finally back into it in a way, but they still have never come out and directly said what

00:14:16 ◼   ► the number is.

00:14:19 ◼   ► They also announced that this quarter, the coming quarter, that they will finally be

00:14:23 ◼   ► breaking out AWS, their cloud services infrastructure, they'll be breaking out that revenue as a separate

00:14:30 ◼   ► business and so they'll be reporting on that.

00:14:33 ◼   ► And I think that that's smart the way that they've done it.

00:14:36 ◼   ► Well it has been annoying for anyone who's trying to get some idea of what Amazon is

00:14:41 ◼   ► actually selling, if anything.

00:14:43 ◼   ► Obviously they're selling candles, but fire phones and those types of things.

00:14:48 ◼   ► But I would imagine that Apple is first putting the Apple Watch under sort of this same type

00:14:53 ◼   ► of thing that Apple TV is under.

00:14:56 ◼   ► Though they do announce the Apple TV numbers.

00:14:58 ◼   ► They just announced whatever it was, five million sold recently and I think it's 25

00:15:03 ◼   ► million total or something like that.

00:15:07 ◼   ► But I would imagine that they'll keep sort of Apple Watch under wraps until there's something

00:15:11 ◼   ► more substantial to talk about if there ever is, sort of like what Amazon has done with

00:15:16 ◼   ► AWS where they wrote that into something else.

00:15:18 ◼   ► And now that it's substantial,

00:15:19 ◼   ► they're gonna break it out and actually talk about it.

00:15:22 ◼   ► - Yeah, I don't know, you know,

00:15:24 ◼   ► for the reputation that Apple has, you know,

00:15:26 ◼   ► well-deserved, I guess, as being secretive and relatively,

00:15:31 ◼   ► they don't like to explain themselves, you know,

00:15:33 ◼   ► they, here's our products and that's it.

00:15:35 ◼   ► And they don't like to talk about what they do.

00:15:37 ◼   ► - Right.

00:15:38 ◼   ► - They're very forthcoming and have been in the whole,

00:15:42 ◼   ► you know, modern era of Apple,

00:15:44 ◼   ► very forthcoming in their financial reporting.

00:15:48 ◼   ► - Yeah, and so, you know, now that I think about it,

00:15:51 ◼   ► I can't imagine that we're going to get

00:15:53 ◼   ► an Apple Watch launch without a weekend,

00:15:57 ◼   ► end of weekend sort of report as to how many units

00:16:00 ◼   ► were shipped, or sorry, were actually sold.

00:16:03 ◼   ► Unless it's, I don't know, I can't imagine

00:16:07 ◼   ► that they don't do that, right?

00:16:09 ◼   ► - I guess, it just seems weird, you know.

00:16:12 ◼   ► I understand it's almost not surprising

00:16:14 ◼   ► because they're secretive and I feel especially

00:16:18 ◼   ► the mix of, you know, for, you know, they don't,

00:16:21 ◼   ► and they don't, one thing they don't reveal

00:16:23 ◼   ► and have never revealed is the mix of iPhones.

00:16:26 ◼   ► So they don't say how many iPhone 6s were sold,

00:16:29 ◼   ► how many 6+, how many 5Cs, how many 5Ss.

00:16:33 ◼   ► They've never revealed that.

00:16:34 ◼   ► You can kind of get it a little bit

00:16:38 ◼   ► 'cause they do reveal their average selling price.

00:16:40 ◼   ► and so you can kind of create a formula

00:16:43 ◼   ► that estimates it based on the prices that they have.

00:16:46 ◼   ► But the watch, everybody expects that the watch

00:16:49 ◼   ► is gonna have an incredibly wide variance in price,

00:16:53 ◼   ► going from the sport model at 350

00:16:56 ◼   ► to however much the gold one's gonna cost.

00:16:59 ◼   ► But most people, including me,

00:17:00 ◼   ► think it's gonna cost at least a couple thousand dollars.

00:17:03 ◼   ► So the mix on that is going to be way more,

00:17:08 ◼   ► way bigger divide than any other product in Apple's business.

00:17:14 ◼   ► Yeah, and I wonder if that sort of plays into the notion of why they wouldn't break out the

00:17:18 ◼   ► Apple Watch 2, because it will be, because of the widespread of prices, it would be sort of

00:17:25 ◼   ► maybe easier, maybe not, but to know, "Boy, they must be selling a lot of the gold version,

00:17:30 ◼   ► because look at these numbers," or, "Boy, they must be selling basically no gold versions,

00:17:34 ◼   ► because here's sort of..." Right, because if the average selling price is

00:17:38 ◼   ► $450 or something like that.

00:17:40 ◼   ► - That's right.

00:17:41 ◼   ► - Yeah, I don't know.

00:17:42 ◼   ► I'm not quite sure.

00:17:43 ◼   ► And who knows, maybe once the business settles down,

00:17:46 ◼   ► they will report it,

00:17:47 ◼   ► and it's just that they don't know what to expect.

00:17:49 ◼   ► I, you know, it's like new territory, so I don't know.

00:17:53 ◼   ► - So one other notion about the watch

00:17:57 ◼   ► that sort of has been interesting to think about

00:18:00 ◼   ► in recent weeks sort of leading up.

00:18:02 ◼   ► So, well, two things.

00:18:03 ◼   ► First, do you think,

00:18:05 ◼   ► are they gonna do some sort of other event before April

00:18:08 ◼   ► to more sort of put it out there

00:18:13 ◼   ► in front of the world one more time

00:18:15 ◼   ► with a proper unveiling with all functionality

00:18:19 ◼   ► that it's gonna ship with working?

00:18:23 ◼   ► - My assumption all along has been yes,

00:18:25 ◼   ► but now that it's getting close

00:18:29 ◼   ► and I'm starting to make plans for the next couple of months

00:18:34 ◼   ► and there's a couple conferences

00:18:37 ◼   ► that I might go to and I'm thinking like, hey,

00:18:39 ◼   ► which of these things should I maybe not do

00:18:42 ◼   ► because I should keep my schedule open?

00:18:44 ◼   ► I'm starting to wonder.

00:18:47 ◼   ► I've always thought that yes, they are going to,

00:18:50 ◼   ► 'cause I think that they have to show

00:18:52 ◼   ► more of the functionality.

00:18:53 ◼   ► I think they have to reveal more of what the watch does

00:18:57 ◼   ► with the first-party software.

00:18:59 ◼   ► In other words, right out of the box,

00:19:01 ◼   ► the stuff that's in there.

00:19:02 ◼   ► And how better to do it than at an event.

00:19:06 ◼   ► But I kind of also feel like they can't do it

00:19:08 ◼   ► if they don't have anything else to show.

00:19:10 ◼   ► - I think you're right.

00:19:13 ◼   ► And I think I could, so I know now

00:19:16 ◼   ► that they are definitely working with some other people,

00:19:20 ◼   ► some third parties who you would imagine

00:19:21 ◼   ► that they would be working with already

00:19:23 ◼   ► to sort of get things ready to go for launch.

00:19:25 ◼   ► And so that definitely points to, you know,

00:19:29 ◼   ► a potential other events and unveiling

00:19:32 ◼   ► where they have a few of the major players up on stage sort of showing off what the third party can

00:19:39 ◼   ► do with this thing. Right. And I feel like there's like three levels. There's A, the first party

00:19:45 ◼   ► software, what the watch does right out of the box. There's the SDK that they've already revealed,

00:19:51 ◼   ► which is somewhat limited. It's the whole thing where you have to have an iPhone app,

00:19:56 ◼   ► and it's iPhone apps more or less projecting notifications to the watch.

00:20:01 ◼   ► And they even say, I mean, this and this is totally like new open Apple, you know,

00:20:09 ◼   ► Tim Cook, you know, era, where they even said when they revealed this initial third party SDK,

00:20:16 ◼   ► that a full SDK with native apps will be coming later in 2015.

00:20:20 ◼   ► Ted Kinsley Right.

00:20:21 ◼   ► John Green So it's not native apps that the software doesn't run on a watch the software

00:20:25 ◼   ► with the current SDK runs on the phone and just sort of projects a UI on the watch.

00:20:31 ◼   ► You can just send a notification.

00:20:32 ◼   ► Jared Ranerelle Right. They're almost like

00:20:33 ◼   ► widgets, I guess, in a way. It's like a small – it's going to be packed into the iPhone app.

00:20:38 ◼   ► So…

00:20:38 ◼   ► Darrell Bock Yeah. I feel like it's almost

00:20:41 ◼   ► new territory. The closest thing, though, would be something like – to call it something like a widget,

00:20:46 ◼   ► like a widget that you project. But then I feel like there's got to be a little – not got to

00:20:51 ◼   ► be, but almost certainly going to be a little bit more sort of blessed partner third parties

00:20:58 ◼   ► who are working with Apple and will have things that aren't in that public SDK,

00:21:06 ◼   ► but are a little bit more like if you are inside, if you've been embraced by Apple, if they've asked

00:21:12 ◼   ► you to send a guy or a team to spend three weeks in Cupertino, that you're going to have a little

00:21:18 ◼   ► bit more tighter integration with the watch, just to demonstrate it.

00:21:21 ◼   ► **Matt Stauffer** Right. And I haven't looked at the SDK,

00:21:23 ◼   ► nor if I did, what I really have a great understanding of it, but like something like

00:21:28 ◼   ► having access to the music that you can store on the watch. Like, is that available to third parties?

00:21:32 ◼   ► Or is it only available to Apple? Okay.

00:21:34 ◼   ► **Ezra Klein** It's not yet. Right now, it's only available

00:21:36 ◼   ► to Apple, the audio playback. Marco Arment has been looking into that for the obvious reason that he

00:21:41 ◼   ► has a podcast app that would be perfectly suited to actually storing some audio on the watch itself.

00:21:47 ◼   ► So it's not there yet

00:21:49 ◼   ► So you could see though that would be an obvious one for like Apple to work with a trusted third party to sort of get

00:21:54 ◼   ► You know give them access to it. Maybe it's Spotify or or well Spotify is sort of a weird one

00:21:59 ◼   ► I don't know how that would work, but something like that, you know

00:22:02 ◼   ► We're running app if it's something fitness app that can access those

00:22:05 ◼   ► Yeah, and and you know

00:22:07 ◼   ► there were

00:22:09 ◼   ► like clearly before the initial

00:22:11 ◼   ► event they had already been talking to some people like

00:22:16 ◼   ► Starwoods hotels where they said like hey, you're going to be able to check into any Starwoods hotel and

00:22:22 ◼   ► Use your watch as your key and then you get into your room just by putting your wrist up to the door

00:22:29 ◼   ► Which is awesome in my opinion as somebody who very frequently loses his hotel keys

00:22:35 ◼   ► Yeah, I always D magnetize mine. Like when I put it I always keep them in my pocket and I have either

00:22:40 ◼   ► like a

00:22:43 ◼   ► Or I give them to my girlfriend and she puts it in her purse and she has an iPad in there and the iPad has

00:22:48 ◼   ► The magnetic class and it always de magnetizes the stupid key. So yes, and they they give me a hard time

00:22:54 ◼   ► I've done that too, but I've done it and I don't keep it in the same pocket as my phone

00:22:57 ◼   ► I keep it in a different pocket and it still it doesn't work. I don't know

00:23:01 ◼   ► I think the technology in those things is it's pretty bad

00:23:04 ◼   ► But I don't know and when I check into like hotels where I've you know been a frequent customer

00:23:09 ◼   ► They're like how many keys do you want three keys?

00:23:11 ◼   ► (laughing)

00:23:14 ◼   ► - That's right.

00:23:15 ◼   ► - They've got me in the file that I need extra keys.

00:23:18 ◼   ► So the watch, the idea that you'll be able to do it,

00:23:20 ◼   ► but that's clearly something that if they're gonna announce

00:23:22 ◼   ► it at the event, they would have partners lined up

00:23:24 ◼   ► in advance.

00:23:25 ◼   ► - And do you think that also it gives them a sort of

00:23:29 ◼   ► a natural way to do a little bit deeper dive into Apple Pay,

00:23:33 ◼   ► where it's at right now, sort of the six month check in

00:23:37 ◼   ► or something, and then also to show it on the Apple Watch

00:23:39 ◼   ► actually working.

00:23:41 ◼   ► Obviously, that seems like it's already been

00:23:42 ◼   ► a pretty big success for them and will continue to be so.

00:23:46 ◼   ► And so that's another obvious thing that they would do

00:23:48 ◼   ► at such an event, I would imagine.

00:23:50 ◼   ► - Yeah, I think, and it's,

00:23:52 ◼   ► Apple Pay is sort of an interesting thing for Apple,

00:23:56 ◼   ► to me, in terms of how much emphasis they're putting on it.

00:23:59 ◼   ► And it's sort of like, to me, it's sort of like

00:24:01 ◼   ► what we were talking about just a couple minutes ago

00:24:03 ◼   ► with the App Store and iTunes Store,

00:24:05 ◼   ► where they're not making a ton of money on it.

00:24:08 ◼   ► they're only making a very fraction of a 1%

00:24:12 ◼   ► on each transaction.

00:24:13 ◼   ► It's a small amount per transaction.

00:24:16 ◼   ► But it's just about getting entrenched and having,

00:24:20 ◼   ► once you get used to it,

00:24:22 ◼   ► you don't wanna not have an iPhone anymore

00:24:24 ◼   ► because then you don't have Apple Pay

00:24:26 ◼   ► and it just is another way to sort of

00:24:29 ◼   ► sink their teeth into people's daily lives.

00:24:32 ◼   ► - Yeah, it's-- - You know,

00:24:33 ◼   ► the money isn't anything to sneeze at.

00:24:36 ◼   ► It's not bad. - No.

00:24:37 ◼   ► It's a great moat is what it starts out as.

00:24:40 ◼   ► And then over time, much like you said,

00:24:43 ◼   ► like with the App Store,

00:24:44 ◼   ► if they can get to a interesting sort of transaction volume,

00:24:47 ◼   ► which they're already well on their way to doing,

00:24:49 ◼   ► they're gonna be making a lot of money off of that.

00:24:51 ◼   ► And they can also, of course,

00:24:53 ◼   ► renegotiate the fees with the banking partners

00:24:57 ◼   ► to get a little bit more money off of it.

00:24:58 ◼   ► I think they have a lot of sort of wiggle room there

00:25:01 ◼   ► to be able to make that into a really,

00:25:04 ◼   ► really interesting business

00:25:06 ◼   ► if they can get it to a scale.

00:25:07 ◼   ► - Yeah, and I just firsthand,

00:25:11 ◼   ► a month ago I got a Moto, the latest model Moto X

00:25:17 ◼   ► just to sort of do the, every year or two,

00:25:21 ◼   ► what's it like to live with the latest and greatest Android?

00:25:24 ◼   ► And one of the, to me, weirdest things is,

00:25:28 ◼   ► and I've been trying to, when I'm using it,

00:25:31 ◼   ► the days I'm using it, I try, leave the iPhone at home,

00:25:34 ◼   ► just take the Moto X.

00:25:35 ◼   ► The single weirdest thing to me out of,

00:25:39 ◼   ► well, there's two things that are really weird.

00:25:41 ◼   ► One is not having iMessage is really awful

00:25:44 ◼   ► because there's so many people now who I,

00:25:46 ◼   ► 'cause I don't get text messages anymore.

00:25:48 ◼   ► They're all iMessage.

00:25:49 ◼   ► So my phone is the one going off,

00:25:52 ◼   ► my phones and iPad are going off at home

00:25:55 ◼   ► with the blue messages,

00:25:57 ◼   ► while my Moto X, which has a different SIM card,

00:26:00 ◼   ► isn't getting these messages.

00:26:02 ◼   ► And the second one is Apple Pay.

00:26:04 ◼   ► Every time I go to Whole Foods with that Moto X in my pocket,

00:26:07 ◼   ► I take it out of my pocket and then realize,

00:26:09 ◼   ► oh, I actually have to go back and use my credit card.

00:26:12 ◼   ► It's actually become a habit where I take the phone out

00:26:15 ◼   ► before I even remember that, oh, I'm walking around

00:26:17 ◼   ► with the Moto X, I can't use it.

00:26:19 ◼   ► - So that's interesting for me to hear

00:26:21 ◼   ► because being over here right now where I am in London,

00:26:24 ◼   ► it's not actually live yet.

00:26:25 ◼   ► I think it might be testing in a few places,

00:26:27 ◼   ► but I haven't gone around and I haven't used it here.

00:26:30 ◼   ► I haven't seen it really anywhere.

00:26:31 ◼   ► It might be starting to roll out at a few drugstores,

00:26:34 ◼   ► or they may have that sort of hack thing,

00:26:36 ◼   ► where it will work with another NFC reader,

00:26:39 ◼   ► but it's not officially supported yet.

00:26:41 ◼   ► And so the only times that I've gotten to use it

00:26:43 ◼   ► had been when I'm back in San Francisco for work.

00:26:46 ◼   ► And so I've only gotten to use it

00:26:48 ◼   ► probably three times or something.

00:26:49 ◼   ► And it's definitely, it's all it was cracked up to be,

00:26:53 ◼   ► in my mind, it's just sort of a magical experience,

00:26:57 ◼   ► which almost seems like it's a little bit crazy

00:27:00 ◼   ► when you use it for the first time,

00:27:01 ◼   ► 'cause it's like, are you sure I don't need

00:27:05 ◼   ► to do anything else?

00:27:06 ◼   ► And sort of the cashier still asks you,

00:27:08 ◼   ► "Yeah, I think you're good."

00:27:10 ◼   ► It's still that early stage period of the thing.

00:27:15 ◼   ► So you use it regularly, and it's good to hear

00:27:17 ◼   ► that it's sort of already in your daily flow.

00:27:21 ◼   ► Where do you go besides Whole Foods that sort of uses it?

00:27:24 ◼   ► There's like, I know there's Walgreens

00:27:25 ◼   ► and some of their bigger stores,

00:27:26 ◼   ► Do any smaller things use it that you regular?

00:27:30 ◼   ► The smallest are the cabs, the taxis in Philly that have...

00:27:35 ◼   ► Oh, interesting.

00:27:36 ◼   ► That have... And that's a perfect example of the sort of unofficial support for it,

00:27:41 ◼   ► where they have these... It doesn't have an Apple Pay logo. It just has a,

00:27:45 ◼   ► you know, "Stick your phone at the terminal" logo.

00:27:48 ◼   ► Right, right.

00:27:48 ◼   ► And it works there. And that was a total surprise to me. 'Cause I know I'd read those stories that

00:27:56 ◼   ► that said, you know, just about any place

00:27:58 ◼   ► that says you can pay by your phone, Apple Pay will work.

00:28:01 ◼   ► And it's, just in particular, it's so much more convenient.

00:28:07 ◼   ► 'Cause a lot of times when I'm in a cab,

00:28:08 ◼   ► I've got my phone out because I'm bored

00:28:10 ◼   ► while I'm riding in the cab and I'm, you know, on the phone.

00:28:13 ◼   ► And digging your wallet out while you're in the backseat

00:28:16 ◼   ► of a cab is such a pain, you know,

00:28:18 ◼   ► it's like you're sitting there like a contortionist

00:28:21 ◼   ► trying to get your stuff out and you don't want.

00:28:23 ◼   ► And if you can just stick your phone at the thing,

00:28:26 ◼   ► it's super great.

00:28:28 ◼   ► And then it just gives you like a thing,

00:28:29 ◼   ► like what percent tip do you wanna give?

00:28:31 ◼   ► Do you wanna give 18%?

00:28:32 ◼   ► Yes, boom, done.

00:28:34 ◼   ► And then you're out of the cab.

00:28:36 ◼   ► - And maybe it gives cabs a fighting chance

00:28:39 ◼   ► against things like Uber and Lyft and whatnot.

00:28:41 ◼   ► 'Cause I have the problem where I have multiple times,

00:28:44 ◼   ► sadly enough, I take Uber so much

00:28:46 ◼   ► that I will get out of a cab without realizing I have to pay.

00:28:49 ◼   ► (laughing)

00:28:50 ◼   ► And it's very awkward and it seems like

00:28:52 ◼   ► I'm sort of crazy or I don't know what, but yeah.

00:28:56 ◼   ► - Trying to scam them.

00:28:57 ◼   ► - Yeah.

00:28:58 ◼   ► (laughing)

00:28:59 ◼   ► Yeah.

00:29:00 ◼   ► - No, that's, you know what,

00:29:01 ◼   ► that's the same sort of convenience though.

00:29:03 ◼   ► Like Uber is to taxis what Apple Pay is to credit cards.

00:29:08 ◼   ► I mean, it's, you get used to that increased level

00:29:13 ◼   ► of convenience and you forget, you know,

00:29:15 ◼   ► it's hard to go back.

00:29:17 ◼   ► - Definitely.

00:29:19 ◼   ► - It's like trying to go back to, you know,

00:29:21 ◼   ► an outhouse after you've had indoor plumbing.

00:29:23 ◼   ► - That's a good analogy, I like that.

00:29:27 ◼   ► - Or so I would imagine.

00:29:29 ◼   ► - Right, right, back in the 1800s when I remember.

00:29:32 ◼   ► - Right, let me take a break and thank our first sponsor.

00:29:36 ◼   ► Our first sponsor is, once again,

00:29:38 ◼   ► our good friends at Fracture.

00:29:40 ◼   ► Their website is fractureme.com.

00:29:44 ◼   ► You guys know Fracture, I've talked about him before.

00:29:47 ◼   ► These are the guys who you send them your photos

00:29:52 ◼   ► and they print them directly on glass.

00:29:56 ◼   ► I don't know how they do it.

00:29:57 ◼   ► They've got like some kind of proprietary technology.

00:30:00 ◼   ► They don't print them on paper

00:30:01 ◼   ► and then put them in a frame underneath glass.

00:30:04 ◼   ► They print them directly on the glass

00:30:06 ◼   ► and then they mail them back to you

00:30:08 ◼   ► in these really clever little cardboard kits

00:30:10 ◼   ► that are self-contained things

00:30:12 ◼   ► that you can either use as a prop stand,

00:30:15 ◼   ► like if you wanna put the photos on your desk

00:30:18 ◼   ► or if you wanna hang them on a wall,

00:30:20 ◼   ► they've got a thing on the back where you can put the hook,

00:30:23 ◼   ► but it's all self-contained.

00:30:24 ◼   ► So when they send them back to you,

00:30:26 ◼   ► you don't have to go and buy a frame

00:30:28 ◼   ► and put the fracture prints in a frame,

00:30:30 ◼   ► go to Ikea and get frames and stuff like that.

00:30:32 ◼   ► You don't have to do any of that.

00:30:33 ◼   ► What they send you is ready to hang on your wall,

00:30:36 ◼   ► ready to put on your desk.

00:30:38 ◼   ► And they look awesome.

00:30:40 ◼   ► I say this all the time, that it's,

00:30:44 ◼   ► To me, it's like when they, with the iPhone 4,

00:30:47 ◼   ► when they first started laminating the LCD screen,

00:30:52 ◼   ► the LED screen to the touchscreen,

00:30:54 ◼   ► and it looked like the pixels were right on the glass

00:30:57 ◼   ► instead of under the glass.

00:30:58 ◼   ► That's exactly what prints from Fracture look like,

00:31:00 ◼   ► except that it's completely analog.

00:31:03 ◼   ► It's not a gadget.

00:31:06 ◼   ► But that's the equivalent for printed pictures.

00:31:09 ◼   ► Really, really good.

00:31:11 ◼   ► They're a great gift idea.

00:31:13 ◼   ► They're a great way to do things like Marco Arment's idea

00:31:17 ◼   ► where he prints, he makes fracture prints,

00:31:19 ◼   ► square ones of all of his apps.

00:31:21 ◼   ► If you have apps, if you make apps,

00:31:23 ◼   ► make some fracture prints of your apps

00:31:25 ◼   ► and you can use those as tchotchkes that you give out,

00:31:29 ◼   ► promotional giveaways or whatever.

00:31:31 ◼   ► Just an amazing, amazing stuff.

00:31:34 ◼   ► If you're gonna get your pictures printed,

00:31:35 ◼   ► I can't imagine why you'd do it any other way

00:31:37 ◼   ► than actually just sending them to Fracture

00:31:39 ◼   ► and doing it that way.

00:31:41 ◼   ► I have them all over my house.

00:31:45 ◼   ► I can't even count how many fractures we've got in the house now.

00:31:48 ◼   ► It's pretty much all the pictures from the last few years that we have hanging up are

00:31:52 ◼   ► fracture prints.

00:31:54 ◼   ► Really, really good.

00:31:57 ◼   ► You can save five bucks off your first order if you use this code, daring fireball, all

00:32:03 ◼   ► one word, daring fireball.

00:32:04 ◼   ► Use that code and you will save five bucks.

00:32:08 ◼   ► prices are already really, really good. So go to fractureme.com, get some prints,

00:32:16 ◼   ► and use this code daringfireball when you check out and you'll save five bucks. So my thanks to

00:32:21 ◼   ► Fracture. What I like about their site is that they compare, they show you the sizes and the

00:32:27 ◼   ► comparison is always a Campbell's soup container. It's like a sort of a random but interesting way

00:32:34 ◼   ► to compare. Yeah, and because it's like a universal, everybody knows how big a can of soup is.

00:32:40 ◼   ► Yeah, I like that. Yeah. If you use a hand, I mean, some people's hands are way bigger than others.

00:32:45 ◼   ► Yeah, it's true. So, Apple's financial results. Two of the points that really stick out to me.

00:32:55 ◼   ► One is China, and it's clearly a huge source of growth. And one of the things that I've been

00:33:02 ◼   ► thinking about with that. And eight years into the iPhone era, in the early years, it's stuck,

00:33:11 ◼   ► it stood out a lot more, but it still is an issue is the carriers, the carrier support,

00:33:17 ◼   ► and the growth of the iPhone in the early years, I think was clearly largely constrained by the

00:33:24 ◼   ► number of carriers, you know, and especially around the world. I mean, it wasn't until

00:33:31 ◼   ► was it 2010 or 2011 when Verizon first got the iPhone?

00:33:34 ◼   ► Ted

00:33:57 ◼   ► But around the world, it was a huge issue.

00:34:01 ◼   ► Like, growth in Japan was clearly constrained

00:34:04 ◼   ► because they were only on the third biggest carrier

00:34:08 ◼   ► in Japan for a long time.

00:34:10 ◼   ► And China was a similar issue, where they weren't

00:34:15 ◼   ► on the biggest national carrier in China

00:34:18 ◼   ► until fairly recently.

00:34:20 ◼   ► - Yeah, I think it's almost been just about a year, right?

00:34:23 ◼   ► I think it's almost, it's coming up in a year

00:34:24 ◼   ► that China Mobile has been with them, yeah.

00:34:27 ◼   ► And as much as everybody, you know, and I, you know, I think the bigger screen sizes,

00:34:33 ◼   ► especially in Asia, I mean, Tim Cook even called it out that it definitely varies by geography,

00:34:38 ◼   ► how much, you know, the mix between six and six plugs, it varies around the globe. I don't think

00:34:44 ◼   ► it's any secret that in Asia, and China and Korea, and, you know, that in those countries,

00:34:51 ◼   ► that the 6 Plus is more popular than it is in other countries.

00:34:57 ◼   ► So the big screen size is definitely part of it.

00:34:59 ◼   ► But I think just the fact that it's available is almost overlooked.

00:35:04 ◼   ► Yeah.

00:35:05 ◼   ► What I find fascinating about that, at the highest level, is Apple…

00:35:14 ◼   ► There was definitely some questions when they were moving into the Chinese market.

00:35:16 ◼   ► Would they be able to compete?

00:35:18 ◼   ► Would they be able to succeed?

00:35:19 ◼   ► it's a high-end product, the difference in buying power versus the United States and

00:35:26 ◼   ► all that kind of stuff and subsidies and all that.

00:35:31 ◼   ► But now that it's clear that Apple's business is doing very well in China and growing very

00:35:36 ◼   ► quickly, all of the other tech companies that they're stacked up against in the United States

00:35:44 ◼   ► they're compared to of course. Google and Facebook and you know even Twitter and

00:35:51 ◼   ► some of these other things that are just hot properties right now. Most of them

00:35:55 ◼   ► have no business in China right? And Apple has a giant massive business that

00:36:02 ◼   ► a lot of their competition or what is viewed or often you know mentioned in

00:36:07 ◼   ► the same breath as them as their competition just doesn't really have

00:36:12 ◼   ► that opportunity at all. Yeah, I completely agree. And this is another case where to me,

00:36:18 ◼   ► Apple has been, if you're paying attention, very forthcoming about it for years now, I would say,

00:36:25 ◼   ► at least during the entire Tim Cook era, like since Steve Jobs stepped down as CEO and Tim Cook

00:36:34 ◼   ► took the reins, I feel like quarter after quarter after quarter, Tim Cook has always made mention

00:36:40 ◼   ► of China, even before China became, it was almost like, you know, he kept and continues to keep

00:36:47 ◼   ► mentioning their growth in China. And it's, you know, again, it goes against the idea that Apple

00:36:54 ◼   ► is super secretive. They've been very forthcoming about it. And now it's, I feel like they're at

00:36:59 ◼   ► the point where it's, everybody's talking about it because it's gotten to be an enormous part of

00:37:04 ◼   ► their business. Yeah. And I wonder if part of that is just honestly because, you know,

00:37:09 ◼   ► when he was still in charge of operations, he would go over there.

00:37:13 ◼   ► That's where all the operations were, the majority of the operations were happening.

00:37:19 ◼   ► While China was always interesting to people because of course there's a billion and

00:37:23 ◼   ► a half people there, it's the most populous country and everyone knew that it was sort

00:37:28 ◼   ► of coming online and becoming more prosperous and becoming more affluent.

00:37:34 ◼   ► Maybe his time on the ground there, he just knew no matter what, we have to figure this

00:37:38 ◼   ► this out and we need to do what it takes to sort of crack this market because eventually

00:37:43 ◼   ► we will saturate the United States market and the European market, you know, not as

00:37:48 ◼   ► big already and so where are we going to find that growth and they are positioned better

00:37:54 ◼   ► than anyone right now to be able to exploit that.

00:37:58 ◼   ► Yeah, the – this is right from Apple's press release on their results.

00:38:05 ◼   ► sales accounted for 65% of the quarters revenue. So exact almost exactly two thirds of the revenue

00:38:11 ◼   ► is outside the US now. And that's a big time, right? It used to be under it used to be under 50%

00:38:17 ◼   ► and then it was hovering around 50% and now it's two thirds or whatnot. Correct? Yeah,

00:38:23 ◼   ► definitely is way up and a big change. Years ago, many years, let's say back before, especially

00:38:30 ◼   ► before the iPhone existed, like in the first half of the last decade, the mobile market around the

00:38:37 ◼   ► world was very unevenly distributed, where BlackBerry had a huge share of the US and was

00:38:45 ◼   ► almost nonexistent elsewhere. And eventually, before BlackBerry sort of imploded, they did

00:38:51 ◼   ► get popular around the world. But I'm saying, you know, 10 years ago, BlackBerry was almost like a

00:38:57 ◼   ► US-centric phenomenon. And like Symbian was a European and Asian phenomenon and had no,

00:39:05 ◼   ► almost no footprint in the US. It was huge in Europe and in Asia and almost non-existent in

00:39:11 ◼   ► the US. There weren't any major carriers that had Symbian phones and none of the US, you know,

00:39:17 ◼   ► the companies that sold phones and the US carriers made Symbian phones. You know, it was weird.

00:39:24 ◼   ► And I always thought that Apple was a little, not quite as totally US-centric as BlackBerry

00:39:31 ◼   ► was then, but it was similar though, where the US was much, much stronger for Apple selling

00:39:37 ◼   ► computers than the rest of the world. Yeah, well, it's sort of, it's not directly comparable,

00:39:45 ◼   ► I guess, because obviously BlackBerry was big with business users, big in Washington,

00:39:49 ◼   ► big on Wall Street, but it's the market was still the more affluent market, right? And

00:39:54 ◼   ► so they both sort of tracked to that market for a long time.

00:39:58 ◼   ► Yeah.

00:39:59 ◼   ► And I wonder too as time goes on, I mean, you know, Apple is always going to be a US

00:40:07 ◼   ► company.

00:40:08 ◼   ► I mean, it's, you know, I would say in a grand scheme, I think famously that they're

00:40:13 ◼   ► rather, you know, in terms of like, you know, they have some remote employees, but in general,

00:40:19 ◼   ► if you work for Apple, you're working in Cupertino, if you're working on product

00:40:22 ◼   ► development, you know, hardware or software, they don't really have, you know, the yes,

00:40:26 ◼   ► They've just started a Seattle office.

00:40:28 ◼   ► They've had like a, I think the iWorks team

00:40:31 ◼   ► has been in Pittsburgh for a long time.

00:40:33 ◼   ► So there's some people who, and there's individuals

00:40:35 ◼   ► who can get an exception and work remotely,

00:40:37 ◼   ► but for the most part, people work there.

00:40:38 ◼   ► It's always gonna be a US company.

00:40:40 ◼   ► The culture is very California-centric.

00:40:43 ◼   ► I think that stamping, designed by Apple in California

00:40:49 ◼   ► and all their devices, is actually very honest.

00:40:52 ◼   ► That's who the company is.

00:40:54 ◼   ► But I do wonder as time goes on,

00:40:56 ◼   ► how much, and you know, we're spoiled.

00:41:00 ◼   ► Well, you're in London now, so I don't know.

00:41:02 ◼   ► But I mean, I've always felt like I'm spoiled

00:41:05 ◼   ► because everything comes out in the US on day one.

00:41:08 ◼   ► And I think it always will.

00:41:09 ◼   ► But I wonder how much, you know,

00:41:11 ◼   ► at what point will like China be on like

00:41:14 ◼   ► the day one list for iPhone?

00:41:15 ◼   ► Because you know, it was clearly close enough

00:41:18 ◼   ► that it made a big difference in the quarter, you know?

00:41:20 ◼   ► - Yep, I agree.

00:41:22 ◼   ► I mean, yeah, I think they talked about that even in the release or something, because

00:41:26 ◼   ► it was two weeks later or something like that that the iPhone came out in China.

00:41:29 ◼   ► So it wasn't day one, but it was sort of the second wave, I think.

00:41:34 ◼   ► And I actually think about that a lot when I was moving over here.

00:41:36 ◼   ► I'm like, "Oh, God, I'm going to have to wait a long time to get the new products when

00:41:42 ◼   ► they come out."

00:41:43 ◼   ► But London's now sort of day one.

00:41:45 ◼   ► They had the new iPads came out, the same thing.

00:41:48 ◼   ► You know what this reminds me of, though?

00:41:49 ◼   ► I think this tracks with sort of what Hollywood's going through as well, right?

00:41:55 ◼   ► So for a long time, movies were released first in the US and then they would go abroad over

00:42:01 ◼   ► a long period of time, sometimes months.

00:42:04 ◼   ► Now increasingly, they're tracking much closer to the US release date.

00:42:08 ◼   ► In some cases, they get released abroad before they get released in the US and sort of to

00:42:13 ◼   ► the point I think you're getting at which is in Hollywood increasingly of importance

00:42:19 ◼   ► is the Asian markets for making the actual money like the box office in the US is now

00:42:26 ◼   ► often a minority piece of the pie compared to what they make overseas.

00:42:31 ◼   ► And so you're starting to see movies like Transformers and things that are more catering

00:42:36 ◼   ► towards Asian audiences and I do wonder like when that happens with Apple, when the tip

00:42:43 ◼   ► happens fully that either the Asian markets or a combination of Asia and some other areas

00:42:52 ◼   ► around there end up being bigger than the US.

00:42:55 ◼   ► Do they change the company in any way to make it more focused on that region?

00:43:01 ◼   ► Do they do specific devices?

00:43:03 ◼   ► I think we talked about this way back when that in order to sell an iPhone in China,

00:43:08 ◼   ► they would have to do a special version of it or whatnot.

00:43:12 ◼   ► then the notion was always that they would never do that.

00:43:14 ◼   ► They would always just have sort of,

00:43:16 ◼   ► while they could, while they change up the technology inside

00:43:18 ◼   ► for the different carriers or whatever,

00:43:20 ◼   ► they would always, they would never stray

00:43:22 ◼   ► from having sort of a streamlined product line

00:43:24 ◼   ► that's offered around the world.

00:43:26 ◼   ► But does that change at all if China becomes

00:43:30 ◼   ► like 75% of the business, like in the future, say?

00:43:33 ◼   ► I don't know.

00:43:34 ◼   ► - I don't know either, but it's, you know,

00:43:36 ◼   ► the fact that it's within two weeks is remarkable.

00:43:39 ◼   ► And, you know, again, I think it's a combination

00:43:41 ◼   ► of multiple factors.

00:43:43 ◼   ► I think it's the fact that they're now on

00:43:46 ◼   ► the major carrier in China,

00:43:48 ◼   ► which makes a huge difference

00:43:50 ◼   ► in terms of how many people can get it.

00:43:51 ◼   ► I think the fact that China's economy is growing

00:43:55 ◼   ► and that there's an ever-increasing number

00:43:58 ◼   ► of Chinese citizens who have the kind of income

00:44:02 ◼   ► that they could buy an iPhone.

00:44:04 ◼   ► I mean, clearly a majority of people in China can't.

00:44:06 ◼   ► - Right. - No argument there.

00:44:09 ◼   ► there's a, you know, take any percentage of how many billion people there are in China and if,

00:44:16 ◼   ► you know, 10% or something like that is a huge number of people.

00:44:19 ◼   ► Brian Kardell Yeah, it's half the U.S. already.

00:44:21 ◼   ► That's great.

00:44:22 ◼   ► Darrell Bock Right. It's just enormous.

00:44:24 ◼   ► I think that they reported that they've, you know, they call it the brick countries, Brazil,

00:44:29 ◼   ► Russia, India, China, which is weird because they're all very different, but it's more or less

00:44:36 ◼   ► four countries with a ton of people and, you know, wide income disparity, I guess.

00:44:43 ◼   ► Brian Kardell Yeah.

00:44:44 ◼   ► But that they're doing well in all four of those countries.

00:44:46 ◼   ► Brian Kardell Yeah, I would, I haven't looked into it,

00:44:48 ◼   ► but I would imagine that so India is probably the farthest behind. That seems to be the case with,

00:44:53 ◼   ► you know, basically everything because they're, well, they also have a billion people there,

00:44:57 ◼   ► and I think they would, I think they're on pace to eventually eclipse China in terms of population.

00:45:03 ◼   ► but while they do have a billion people right now, well over a billion people right now,

00:45:09 ◼   ► the society is quite different there. And, you know, it's still, the iPhone is still viewed as

00:45:16 ◼   ► way out of reach for most people. Whereas in China, you know, there's a, there's,

00:45:21 ◼   ► as you mentioned, there's a growing segment of the population that can and is buying the iPhone

00:45:25 ◼   ► right now. Yeah. And I think, I think in broad strokes, that's exactly right, that India,

00:45:31 ◼   ► it might be growing faster population-wise, but that the economy is nowhere near as strong as

00:45:37 ◼   ► China's in terms of a growing, you know, Western-style middle class.

00:45:41 ◼   ► Pete: And that's what Xiaomi, right, is going after, right?

00:45:44 ◼   ► Ted, is like their big focus because they know that they have an opening there that Apple probably

00:45:50 ◼   ► can't go after at least any time in the next couple of years or something.

00:45:54 ◼   ► Trenton Larkin Right. I totally agree. And I think that they

00:45:57 ◼   ► have a great opportunity, but I feel like all of the and you still see it, you still see it where

00:46:03 ◼   ► it's, you know, when Xiaomi comes out with something and it's what does it mean for Apple? How can

00:46:07 ◼   ► Apple compete? It's, to me, they're a huge problem for Samsung and for all the other hand, Android

00:46:14 ◼   ► handset makers. And not that they're irrelevant to Apple, but it's, it's all in that segment

00:46:22 ◼   ► underneath what Apple is targeting.

00:46:24 ◼   ► - That's right.

00:46:25 ◼   ► I mean, just look at what has happened to Samsung.

00:46:28 ◼   ► They've been, while they're still making a lot of money,

00:46:31 ◼   ► their growth has been just totally eaten into

00:46:35 ◼   ► and likely by Xiaomi and Apple, of course, at the top end,

00:46:40 ◼   ► but they're being squeezed, not unlike Microsoft,

00:46:43 ◼   ► is squeezed in the US from sorta, you know,

00:46:46 ◼   ► the Chrome OS on the low end

00:46:47 ◼   ► and MacBook's still sales rising.

00:46:50 ◼   ► It's the same thing, just happened,

00:46:52 ◼   ► in a very condensed time to Samsung. It's sort of incredible how fast it happened to Samsung, but

00:46:56 ◼   ► they're in this precarious situation right now because of that.

00:47:00 ◼   ► Pete: Yeah, actually, I think Samsung revenue and profits are actually down, not just stagnant.

00:47:05 ◼   ► Brian

00:47:18 ◼   ► So, another thing about the Chinese market that you hear come up time and time again

00:47:22 ◼   ► is actually that the watch industry is pretty massive there.

00:47:26 ◼   ► As the population grows in affluence, they're sort of looking to these different traditional

00:47:31 ◼   ► areas of affluence like wine and watches, of course, is one.

00:47:36 ◼   ► And so, what does that mean for Apple Watch there?

00:47:39 ◼   ► And I don't know, but it could mean major things if the product is successful.

00:47:47 ◼   ► becomes if maybe from day one it's a bigger seller in China than it is in the US.

00:47:51 ◼   ► Yeah, I think so. I don't know if I've mentioned this on the show before. I saw a documentary a

00:47:57 ◼   ► couple months ago. It was great. It's on iTunes called Red Obsession. Have you seen this?

00:48:03 ◼   ► No.

00:48:03 ◼   ► It's about the wine industry. Great documentary. Just note the name Red Obsession, but the gist

00:48:10 ◼   ► of it is about how the Asian market has completely disrupted the sale and price of wine. Like,

00:48:21 ◼   ► they'll go in, there's Chinese buyers of wholesale wine who will go into like,

00:48:27 ◼   ► you know, high end French, what do you call a wine maker? Not a distillery. What's the word?

00:48:37 ◼   ► - Winery?

00:48:38 ◼   ► - Yeah, winery.

00:48:39 ◼   ► And just buy, they would just come in and just say,

00:48:43 ◼   ► "We'll buy all of it, we'll just take it all."

00:48:45 ◼   ► And they're like, "What?"

00:48:46 ◼   ► And they're like, "We'll just take all of, this is great,

00:48:49 ◼   ► your wine this year, this Bordeaux is fantastic,

00:48:54 ◼   ► just give it, just send all of it to China."

00:48:57 ◼   ► That's it, all of it.

00:48:58 ◼   ► And then there's people who are used to buying the wine

00:49:01 ◼   ► from this place in America and elsewhere in Europe,

00:49:05 ◼   ► And they're like, "What do you mean you don't have any?"

00:49:07 ◼   ► And they're like, "We sold it all to China."

00:49:09 ◼   ► That's it, it's gone.

00:49:10 ◼   ► - I have a first-hand account of that.

00:49:12 ◼   ► I was being situated in Europe now.

00:49:15 ◼   ► It's pretty easy to obviously get around

00:49:17 ◼   ► and go places like Paris.

00:49:19 ◼   ► I think we were in Switzerland over the summer

00:49:21 ◼   ► and we're in a small little vineyard place

00:49:24 ◼   ► in the middle of nowhere.

00:49:26 ◼   ► And we are there with the only other people in the room

00:49:29 ◼   ► is a Chinese family sort of tasting the wine.

00:49:32 ◼   ► and you look around and we were thinking about buying a bottle or whatever, they had so few

00:49:39 ◼   ► bottles that were actually earmarked that could be sold to people who walk in. So much

00:49:48 ◼   ► was earmarked to go to China and they even print Chinese labels and this is in the middle

00:49:51 ◼   ► of Switzerland and it's like this little winery we were in, they are experiencing just what

00:50:00 ◼   ► you're talking about where they just know that their market now is basically China is

00:50:05 ◼   ► a huge part of it. I don't know what the percentage was, but say it's 75% and then

00:50:09 ◼   ► the rest of the world is like 25%. So they store some for the rest of the world, but

00:50:13 ◼   ► then the most of it is just going to be sent to China.

00:50:16 ◼   ► Right. And extrapolate from that what happens if China, if their economy keeps growing and

00:50:23 ◼   ► a bigger and bigger percentage of their citizens grow into what we would consider like middle

00:50:29 ◼   ► or upper class incomes. And the potential for growth there is just phenomenal.

00:50:34 ◼   ► And so what does, so do you, I mean like the Apple Watch really could be the first product

00:50:40 ◼   ► that's a massive hit in China, bigger than it is in the US. And like that's weird to think about,

00:50:46 ◼   ► right? That there would be, it's always been that the US has sort of been the leader ahead of the

00:50:53 ◼   ► game, I guess, in terms of Apple and technology, and then the rest of the world sort of catches on

00:50:58 ◼   ► by stages and that doesn't also just mean in terms of the US being more affluent and

00:51:02 ◼   ► having more buying power or whatever.

00:51:06 ◼   ► Sometimes it's just everything from Apple releases the products here first, traditionally

00:51:13 ◼   ► they have, to it being sort of the benefits of scale and so everyone you know has an iPhone

00:51:20 ◼   ► and so you can use things like AirDrop and things like that and so it becomes, and iMessage

00:51:26 ◼   ► so it becomes a more compelling option. But it hasn't been that another country has really

00:51:32 ◼   ► taken off first. And I don't think that it's a crazy notion that Apple Watch could be one of

00:51:38 ◼   ► those things. Yeah, I don't think so either. And I think that the gold models, the edition level

00:51:46 ◼   ► plays right into that. And that's right. You know, it's totally like a feel thing, not a

00:51:56 ◼   ► think thing. It doesn't make logical sense, right? Logically, it makes no sense for anybody to buy

00:52:01 ◼   ► the gold version of the watch if the aluminum one does the exact same function at $350. But that's

00:52:08 ◼   ► jewelry. Jewelry is entirely a, you know, how it makes you feel type thing, not like a logical

00:52:14 ◼   ► thing. Nobody needs any kind of jewelry. And, you know, it's a long, you know, it's a long standing,

00:52:20 ◼   ► you know, it's, you know, it goes back to the beginnings of human civilization. It's, you know,

00:52:26 ◼   ► there's no, you can't argue with it. But I feel like in America, it's, you know, let's just say,

00:52:33 ◼   ► when they, when they do come out with the watch, and they announce the final pricing,

00:52:36 ◼   ► and let's say that the addition ones are $4,000. There's, I'm telling you, I still think even after

00:52:43 ◼   ► all these months of people saying, "Hey, I think these gold ones might cost thousands of dollars.

00:52:46 ◼   ► I think these gold ones might cost thousands of dollars." When they announce it, I'm telling you,

00:52:50 ◼   ► America, people are going to shit their pants. They're going to be like, "I cannot friggin'

00:52:55 ◼   ► believe this. They're out of—Johnny Ive has lost his frickin' mind. Why in the world is anybody

00:53:01 ◼   ► going to do this?" And in the meantime, people in China and Asia, other places in Asia, are going to

00:53:07 ◼   ► start lining up to buy them. I totally agree with you. I mean, it's because there needs to be a

00:53:15 ◼   ► a mindset change which only can happen sort of over time I think. Everyone, including

00:53:20 ◼   ► me even when I think about it, I'm viewing this as a technology product. What technology

00:53:24 ◼   ► product would I buy these days that costs say $4,000 or $5,000? I mean it used to be

00:53:29 ◼   ► televisions cost that much, now they don't anymore, they've come down in price a lot.

00:53:34 ◼   ► It used to be computers cost that much, now they don't anymore, they're about half that

00:53:37 ◼   ► price for a high-end one. And so what else is there out there in the technology world

00:53:42 ◼   ► that would cost that amount of money. I mean, I'm trying to think of something now and

00:53:47 ◼   ► I can't really come up with anything, right? So, all of a sudden this small little gadget

00:53:52 ◼   ► becomes the most expensive piece of technology that you can buy on the market and why on

00:53:57 ◼   ► earth would anyone do that when you can also get basically the same thing for $350 for

00:54:02 ◼   ► the sport edition or whatnot. Yeah, it's exactly what you said. The mentality has to

00:54:08 ◼   ► shift around it that this is actually jewelry and that's, I mean, you know, that's why Apple's doing

00:54:13 ◼   ► what they're doing and that's why they're hiring the people that they're hiring, obviously.

00:54:17 ◼   ► And there's some serious cultural differences too where, and I'm not an expert on it, I mean,

00:54:23 ◼   ► Ben Thompson is, he lives over there, but I mean, I know enough about Asia though to know that

00:54:27 ◼   ► they're culturally, their view of money is very different than us in the West. In the West,

00:54:35 ◼   ► not that we're ashamed of it, but it's money is considered like a private matter. You don't flaunt,

00:54:40 ◼   ► if you're wealthy, it's considered uncouth to flaunt it. And in Asia, that's not the case at all.

00:54:46 ◼   ► So like I remember specifically like when the watch was first announced, I was listening to

00:54:50 ◼   ► Accidental Tech Podcast and Marco Arment had just said something, something I think in reference to

00:54:56 ◼   ► the gold one that like if he was at WWDC next year after the watch was out, he would be embarrassed

00:55:01 ◼   ► to be out like, you know, having cocktails at five or six in the afternoon after WWDC and have a gold

00:55:08 ◼   ► watch if everybody could know it was four thousand dollars. And I know exactly what he's talking

00:55:13 ◼   ► about. I know, you know, I sort of feel the same way. Whereas in Asia that wouldn't, nobody would

00:55:18 ◼   ► ever, that nobody would ever say that. Nobody would ever say I'm embarrassed to have what

00:55:22 ◼   ► everybody knows is a four thousand dollar watch on my wrist. Right. Yeah, no, that's a, that's a

00:55:26 ◼   ► great point. I mean, and I think that's true. You see that even before the watch, like when,

00:55:31 ◼   ► When you buy one of the new iPhones for the first time,

00:55:35 ◼   ► day one, you get it.

00:55:36 ◼   ► And you know that plenty of people all know that this is,

00:55:41 ◼   ► especially, say, with the 6 Plus,

00:55:43 ◼   ► because it's such a different size.

00:55:44 ◼   ► And so everyone's looking at that like, wow,

00:55:46 ◼   ► that guy just dropped whatever, $700 to get that phone.

00:55:50 ◼   ► And I'm still stuck here with the 3GS model.

00:55:54 ◼   ► And one day, I hope to get that.

00:55:55 ◼   ► But there's already that sort of thing

00:55:59 ◼   ► where you're looking at this.

00:56:00 ◼   ► It's like, yeah, everyone's gonna know that I just spent $700

00:56:03 ◼   ► and it's, even though it's an awesome device

00:56:05 ◼   ► and I wanna use it out there,

00:56:06 ◼   ► it's like, should I really take this out of my pocket here

00:56:08 ◼   ► and sort of flaunt it in front of everyone?

00:56:11 ◼   ► - Yeah.

00:56:12 ◼   ► Let's take a break.

00:56:14 ◼   ► I'm gonna thank our second sponsor.

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00:59:05 ◼   ► and that way they'll know you came from the show. So backblaze go sign up for

00:59:14 ◼   ► Here's another thing about the iPhone. I want to talk to you about this,

00:59:21 ◼   ► because I know you've written about it. The iPhone 5C, I think, is the most misunderstood iPhone

00:59:31 ◼   ► that Apple's ever made. Do you think the iPhone 5C… What do you think the point of the iPhone 5C

00:59:39 ◼   ► So my thoughts have changed.

00:59:43 ◼   ► I don't know, obviously.

00:59:45 ◼   ► I mean, I haven't talked to anyone

00:59:46 ◼   ► sort of with first-hand knowledge of this,

00:59:52 ◼   ► of like what the point was.

00:59:54 ◼   ► And I don't know,

00:59:55 ◼   ► I don't have a good enough sense of that to know for sure.

00:59:58 ◼   ► But my thought process has changed over time.

01:00:00 ◼   ► At first, everyone was talking about it, of course,

01:00:04 ◼   ► is the quote-unquote cheap iPhone,

01:00:06 ◼   ► which ended up being incorrect.

01:00:08 ◼   ► And then it became sort of the first product that was launched under the unified Johnny

01:00:17 ◼   ► Ive design and software and hardware design at Apple.

01:00:22 ◼   ► So it was iOS 7 and we got the new flat design, the colorful sort of fluorescent look and

01:00:29 ◼   ► those phones seem to go nicely with that.

01:00:32 ◼   ► I still think, even I still have a blue model of the iPhone 5C that I still think is, I

01:00:42 ◼   ► know I'm sort of in the minority here, but I thought it was a beautiful device when paired

01:00:45 ◼   ► with iOS 7 at the time.

01:00:47 ◼   ► I don't even know if I've upgraded it to iOS 8.

01:00:49 ◼   ► It's sitting in a drawer somewhere obviously with iPhone 6 out now.

01:00:53 ◼   ► But I thought it was a beautiful device and sort of the way it played with the wallpapers

01:00:58 ◼   ► that they had for iOS 7, and it just seemed like it was a device that Johnny Ive wanted

01:01:03 ◼   ► to create to showcase the new software that he was creating for the first time.

01:01:08 ◼   ► Whereas the iPhone 5s was also a great design, great industrial design, but different.

01:01:17 ◼   ► It was sort of the extension of what they had already done before doing this new software.

01:01:22 ◼   ► And so that was my thought process for a while.

01:01:26 ◼   ► You know Apple just didn't sort of continue the line right and so now we have the six and the six plus and we have

01:01:32 ◼   ► No, we have three colors three sort of ten each of those but no no more colorful range anymore and

01:01:39 ◼   ► Now we're sort of going towards as we head towards Apple watch where that's obviously going to be the most

01:01:45 ◼   ► customizable Apple device that Apple's ever done

01:01:48 ◼   ► You know, maybe that's enough to sort of placate the people who want

01:01:52 ◼   ► a

01:01:54 ◼   ► different type of design and and I don't know what are your what are your thoughts on it?

01:01:58 ◼   ► I I feel like I feel like I gave myself credit for not really buying into the whole like

01:02:05 ◼   ► It leaked

01:02:07 ◼   ► Months in advance that they were doing a plastic phone and that's just inevitable

01:02:11 ◼   ► when you're making things in this quantity that it the news leaks from the Asian supply chain and

01:02:17 ◼   ► Every you know, not everybody but the the conventional wisdom was Oh apples going after cheap the cheap market

01:02:23 ◼   ► They're gonna sell this thing cheap, cheap, cheap, cheap.

01:02:27 ◼   ► And then it wasn't cheap.

01:02:28 ◼   ► It was unlocked.

01:02:29 ◼   ► It was started at like 550 bucks,

01:02:31 ◼   ► which is not by anybody's,

01:02:35 ◼   ► it's certainly cheaper than the 5S was, but it wasn't cheap.

01:02:39 ◼   ► And I never bought into that.

01:02:40 ◼   ► It never made sense to me that Apple would suddenly lurch

01:02:43 ◼   ► after the low end of the market and just go for market share.

01:02:47 ◼   ► So I gave my, patted myself on the back

01:02:49 ◼   ► for getting the 5C just because I didn't,

01:02:53 ◼   ► never bought into it being cheap.

01:02:55 ◼   ► But I think I missed the boat though.

01:02:56 ◼   ► I think just by thinking, well, it's not going to be cheap,

01:03:01 ◼   ► isn't enough.

01:03:02 ◼   ► And I almost feel like in hindsight, when it came out,

01:03:05 ◼   ► it wasn't even, not that they didn't wanna sell it

01:03:08 ◼   ► in the first year, but it almost wasn't even meant

01:03:12 ◼   ► for that year.

01:03:13 ◼   ► I think it was meant for the long haul

01:03:17 ◼   ► and like where it is now, like at the, you know,

01:03:20 ◼   ► the free with contract level of iPhone,

01:03:25 ◼   ► that it had the new aspect ratio for the screen.

01:03:30 ◼   ► It wasn't three and a half inches,

01:03:32 ◼   ► it was four inches and 16 by nine.

01:03:34 ◼   ► And the, I do think, I agree with you,

01:03:39 ◼   ► I think they're proud of the industrial design of it.

01:03:41 ◼   ► I think Apple really likes that look.

01:03:44 ◼   ► And I think, again, I think you're right,

01:03:46 ◼   ► I think it's very astute that it does seem

01:03:49 ◼   ► to be much more in harmony with the aesthetics

01:03:52 ◼   ► of iOS 7 and 8 than the aluminum phones,

01:03:56 ◼   ► the 5S and the 6s.

01:04:00 ◼   ► And I know a lot of people, not tons,

01:04:04 ◼   ► but I know enough who have the 5C

01:04:08 ◼   ► because they just like the way it looks.

01:04:11 ◼   ► - Right, even though it was slower,

01:04:12 ◼   ► even though it wasn't as fast.

01:04:14 ◼   ► - Yeah, that the iPhone has sort of gotten

01:04:17 ◼   ► the point where you know whatever the difference in performance is doesn't matter. They're not

01:04:22 ◼   ► waiting for anything anyway. It doesn't take any longer. You're mostly waiting for stuff to download

01:04:26 ◼   ► right. Instagram doesn't run slower on the 5C. It's you're just waiting for the pictures to come

01:04:31 ◼   ► down the pipe. Yeah, they just like the way it looks and I almost feel it was all about like

01:04:37 ◼   ► establishing an aesthetic that fits at the lower end of the product lineup so that they don't have

01:04:45 ◼   ► the free with contract phone being a premium device.

01:04:50 ◼   ► - Yeah, that's a really interesting thought.

01:04:52 ◼   ► I totally understand what you're saying there.

01:04:55 ◼   ► Because it's weird when you buy something brand new,

01:04:59 ◼   ► like say the 6 now, and then you know in two years

01:05:03 ◼   ► this is going to be viewed as sort of the quote unquote,

01:05:06 ◼   ► whether it's fair or not, the cheap version, right?

01:05:08 ◼   ► It's going to, not only will it,

01:05:11 ◼   ► we all know things degrade in value over time

01:05:13 ◼   ► as they're sort of used and everything,

01:05:15 ◼   ► But it's weird, the notion that as soon as you buy it,

01:05:19 ◼   ► you know that in two years this will be on, you know,

01:05:22 ◼   ► sort of Verizon ad spreads saying like, free,

01:05:27 ◼   ► and this is the cheap version now.

01:05:30 ◼   ► And so if Apple can get around that by creating a product

01:05:34 ◼   ► that's sort of separate from the high end to begin with,

01:05:38 ◼   ► from the high end meaning their actual most expensive things,

01:05:41 ◼   ► even though as we just talked about,

01:05:42 ◼   ► it's not that much cheaper,

01:05:44 ◼   ► that creates a different sort of psychological dynamic to it.

01:05:47 ◼   ► I also think, and I, so I had written a post a long time ago, maybe a year ago I guess,

01:05:53 ◼   ► talking about like how odd it is that every advertisement I see around, I think it was

01:05:59 ◼   ► around still San Francisco and sort of, I think it was in Seattle actually when I saw

01:06:03 ◼   ► one that sort of made me think about this, that every ad I was seeing was for the iPhone

01:06:09 ◼   ► 5C and not the 5S.

01:06:10 ◼   ► There were a few ads for the 5S, but almost all of them, certainly around the Bay Area,

01:06:14 ◼   ► were for the 5C.

01:06:16 ◼   ► And at first I interpreted that as it must not be selling well

01:06:18 ◼   ► and Apple feels like they need to pump up the advertising

01:06:21 ◼   ► to sort of boost it up.

01:06:22 ◼   ► And that may have been the case.

01:06:23 ◼   ► I don't really know.

01:06:24 ◼   ► But I did get a lot of pushback for it.

01:06:25 ◼   ► And I think some of it was astute pushback, thinking,

01:06:29 ◼   ► like, actually, this is sort of the perfect device.

01:06:31 ◼   ► Along the lines of what we were just talking about,

01:06:32 ◼   ► this is sort of the perfect device for Apple

01:06:34 ◼   ► to showcase in their advertisements,

01:06:36 ◼   ► because it's colorful.

01:06:37 ◼   ► It sort of goes perfectly with iOS 7.

01:06:39 ◼   ► It's sort of part of this--

01:06:42 ◼   ► the playful ads that Apple likes to do.

01:06:45 ◼   ► And so it ended up being, in a way,

01:06:47 ◼   ► like the poster child for a long time

01:06:49 ◼   ► for all those ads around different cities,

01:06:52 ◼   ► and certainly in the US.

01:06:53 ◼   ► I don't know about the rest of the world.

01:06:55 ◼   ► And what if it was like, you know,

01:06:57 ◼   ► just sort of a product that they thought

01:07:00 ◼   ► was really beautiful and they knew

01:07:01 ◼   ► that it could sort of get people in the stores

01:07:03 ◼   ► by having these colorful ads,

01:07:05 ◼   ► and then, you know, then either they buy this device

01:07:08 ◼   ► and that's great for them,

01:07:08 ◼   ► or they, you know, they decide to buy

01:07:11 ◼   ► the more expensive device.

01:07:12 ◼   ► - Yeah, I remember that post

01:07:13 ◼   ► and it's actually why I brought it up with you.

01:07:15 ◼   ► I don't know how.

01:07:16 ◼   ► I'll look it up and I'll put it in the show notes,

01:07:17 ◼   ► but I do remember that post.

01:07:18 ◼   ► And I remember disagreeing with it

01:07:20 ◼   ► because it was right around the time

01:07:22 ◼   ► when it first started dawning on me

01:07:23 ◼   ► that I had underestimated the 5C.

01:07:27 ◼   ► And like I said, I think that this year

01:07:30 ◼   ► is the year where the 5C

01:07:32 ◼   ► is exactly where Apple wants it to be.

01:07:34 ◼   ► I feel like it's,

01:07:36 ◼   ► I feel like the hardest part of Apple's business

01:07:38 ◼   ► is now that they've hit these insane quantities

01:07:42 ◼   ► for iPhones, it's really, really hard.

01:07:46 ◼   ► And their pipeline is so long.

01:07:48 ◼   ► Like, how do you ship 74 million iPhones?

01:07:52 ◼   ► And who knows what percentage of them were the iPhone 6?

01:07:54 ◼   ► But I think it's a majority of them last quarter.

01:07:57 ◼   ► How do you make that many in the first quarter

01:07:59 ◼   ► that it's available?

01:08:01 ◼   ► Well, part of how they do it is that it's planned out

01:08:05 ◼   ► years in advance.

01:08:07 ◼   ► I mean, like, I think it's about a two-year pipeline

01:08:10 ◼   ► for their iPhones, like more or less

01:08:14 ◼   ► that the iPhone 6 and 6 Plus were about two years

01:08:17 ◼   ► in the making, and it's dangerous for them.

01:08:20 ◼   ► And I feel like that's partly why they're,

01:08:22 ◼   ► I think in hindsight, they were probably a year late

01:08:24 ◼   ► to the big phone market.

01:08:27 ◼   ► I think that if they could go back

01:08:29 ◼   ► and do everything over again,

01:08:30 ◼   ► I think that they would probably put the iPhone 6 and 6 Plus

01:08:34 ◼   ► one year ahead on the schedule,

01:08:36 ◼   ► 'cause it was, but it takes too long for them

01:08:38 ◼   ► to get everything set up so they can make these quantities.

01:08:41 ◼   ► They can't act fast and just say,

01:08:44 ◼   ► "Okay, we'll make a five and a half inch phone,

01:08:47 ◼   ► "but we're only gonna be able to make a million of 'em

01:08:49 ◼   ► "because it's new and we're not ready for it."

01:08:51 ◼   ► Well, they can't do that.

01:08:52 ◼   ► They can't have a phone that they can only make a million of

01:08:54 ◼   ► in the first quarter.

01:08:55 ◼   ► - Yep, I agree.

01:08:57 ◼   ► - But I feel like the 5C was something

01:08:59 ◼   ► where they were thinking ahead over a year,

01:09:03 ◼   ► and they wanted to have a phone that sat at this sort of,

01:09:08 ◼   ► well, in fact, they've gone to four levels, right? They've got the six plus, which is $100 more for

01:09:13 ◼   ► the same specs compared to the six. So they've got the six plus where you pay $100 premium for

01:09:18 ◼   ► the bigger screen with the extra pixels. Then there's the six, which sits where the iPhone

01:09:27 ◼   ► always had, the new iPhones always have same price levels. Then one cut down, $100 down is the five S,

01:09:35 ◼   ► which is still a premium device, right? The 5S is – and we could do a whole show about it,

01:09:41 ◼   ► but in my opinion, it's still my favorite iPhone that they've ever made.

01:09:44 ◼   ► And now the 5C at that free with contract level is so much more natural than if they were selling – if

01:09:52 ◼   ► they had stuck to the original plan and hadn't made this one device that is so unusual with

01:09:59 ◼   ► the plastic body and it never was at the high end. Effectively, though, the 5C is where,

01:10:05 ◼   ► if they had stuck to the plan and done the same thing they've done every other year,

01:10:09 ◼   ► that would still be the original iPhone 5 without the S.

01:10:12 ◼   ► Benji M

01:10:12 ◼   ► Right.

01:10:13 ◼   ► And instead, which is like visually indistinguishable from the 5S, except it doesn't have touch

01:10:20 ◼   ► ID, but at a glance it looks the same.

01:10:24 ◼   ► Whereas now, at a glance, it's instantly recognizable as a different phone.

01:10:29 ◼   ► Yes, that's a good point.

01:10:30 ◼   ► I've thought, I think I've written about that as sort of that notion as well, that

01:10:35 ◼   ► there was the problem with the S lines where they look the same.

01:10:40 ◼   ► And so it's like, well, yes, they're faster inside.

01:10:44 ◼   ► Like, what is it that's sort of differentiating on the outside?

01:10:48 ◼   ► There was nothing for a while, and now the 5C gives you

01:10:51 ◼   ► a very differentiated factor.

01:10:53 ◼   ► But what do you think, then, sort

01:10:55 ◼   ► of the obvious lead-in to that is,

01:10:58 ◼   ► what do you think they end up doing the next iteration?

01:11:02 ◼   ► So we're coming up on the fall of 2015.

01:11:07 ◼   ► the assumption I would assume is that they do an iPhone 6S

01:11:12 ◼   ► and then do they have an iPhone 6C

01:11:17 ◼   ► and what do they do with them?

01:11:19 ◼   ► Do they have a Plus S and how do they keep the line going?

01:11:24 ◼   ► - Yeah, and how big would it be, right?

01:11:25 ◼   ► How big would it be?

01:11:26 ◼   ► Would it be 4.7 inches or would it be 5.5?

01:11:30 ◼   ► Would it be both?

01:11:31 ◼   ► I don't think it would be both.

01:11:32 ◼   ► I think that they, it's an excellent question.

01:11:35 ◼   ► I'm really kind of at a loss to guess

01:11:38 ◼   ► what they're gonna do this year.

01:11:39 ◼   ► Like I kind of guess they're gonna do at the high end,

01:11:43 ◼   ► 6S and a 6S+, which would be this,

01:11:45 ◼   ► look a lot like the, you know,

01:11:47 ◼   ► just the typical S, you know, TikTok revisions.

01:11:52 ◼   ► - Right.

01:11:53 ◼   ► - But then what did they do at that pricing level below

01:11:55 ◼   ► where the 5S is now?

01:11:57 ◼   ► And I really wonder.

01:11:59 ◼   ► - Do they keep the 6 and 6+ and, you know--

01:12:03 ◼   ► - I don't think so.

01:12:03 ◼   ► - We're getting pretty convoluted then at that point.

01:12:05 ◼   ► to what the what the offerings are. Yeah, I don't think so. I kind of feel and I kind of feel like

01:12:11 ◼   ► the way that they're and it's somewhat arbitrary because I don't think that the actual cost is

01:12:17 ◼   ► that much different for the different sizes but I kind of feel like they'll if I had to guess

01:12:25 ◼   ► maybe like they'll call it a 6c and it would be a four inch screen but with the specs of the iPhone 6.

01:12:33 ◼   ► So that's interesting because one thing that has always been humorous to me for the past couple years now

01:12:38 ◼   ► Remember when the iPhone first came out and everyone was clamoring like we need an iPhone Nano

01:12:43 ◼   ► And you know and this is when the iPhone was a 3.5 inch screen the original iPhone and people were saying

01:12:50 ◼   ► It's too big like we you know

01:12:52 ◼   ► We're coming from a world of flip phones like the in the razor and things the Motorola razor

01:12:56 ◼   ► We need a smaller device like I don't want anything bigger and now it's like no one talks about that anymore

01:13:02 ◼   ► more and when you do hold even a 5 and 5s next to the 6 plus, it's sort of comical

01:13:09 ◼   ► how small it seems and I don't even know when the last time I held a 4 was, let alone

01:13:14 ◼   ► you know some of the even the older ones, but do you think that they go to a world where

01:13:21 ◼   ► we have now the 6 inch screen, is it a 5, 5 and a half inch screen and then is it a

01:13:29 ◼   ► in screen or do they do some other variation on that?

01:13:33 ◼   ► But is the three SKUs, it seems to me like three SKUs is pretty good because you can

01:13:37 ◼   ► offer different things at each for what people want.

01:13:40 ◼   ► Some people might want a smaller phone.

01:13:43 ◼   ► The problem of course is with developers, it's a pain in the ass to have to support

01:13:48 ◼   ► all of these different screen sizes still.

01:13:50 ◼   ► And so Apple traditionally, as you know, has been pretty good about retiring older sort

01:13:56 ◼   ► of technology and making it so that you don't have to support that. Rather, you know, they

01:14:00 ◼   ► push forward. But what do you think that they would do there?

01:14:04 ◼   ► I don't know. It's interesting to me. Whether they say 4.7—like, one way they could go

01:14:11 ◼   ► would be to say 4.7 is the new small iPhone size. And now the $99 mid-tier—$99 with

01:14:19 ◼   ► contract mid-tier phone is also 4.7 inches. They could do that. And then that, to me,

01:14:25 ◼   ► be a strong signal that the four inch size, you know, I'm sure that they would still have something

01:14:31 ◼   ► at the, you know, free with contract level that still has a four inch screen at the end of, you

01:14:36 ◼   ► know, next year. But that it's on the way out. But on the other hand, I could see them going though,

01:14:43 ◼   ► where they still say you can still get a four inch phone, you know, we've got the, you know, small,

01:14:48 ◼   ► medium and large screen sizes, and four inch is our mid-tier size. And it would have the same,

01:14:57 ◼   ► the A8 from the iPhone 6, the camera from the iPhone 6, but in a four inch form factor. But

01:15:08 ◼   ► would that form factor be plastic, like the 5C, or would it be metal, like the 5S? I don't know.

01:15:13 ◼   ► Yeah, and I guess the other thing to bring up is that I think now, are we at the point

01:15:19 ◼   ► now where everything has the Lightning connector?

01:15:21 ◼   ► We are, right?

01:15:22 ◼   ► Yeah, we are with iPhones.

01:15:24 ◼   ► But we're not at the place where everything has Touch ID, and I assume that Apple wants

01:15:29 ◼   ► to get there for Apple Pay especially, and then just overall to simplify and make it

01:15:34 ◼   ► easier for developers who are trying to support Touch ID and there's the fallback, of course,

01:15:39 ◼   ► of just using passwords, but I would assume that they want to get everyone on Touch ID,

01:15:43 ◼   ► even the low-end ones? Do you think you agree with that? Well, I don't know, because that's the—so

01:15:48 ◼   ► the weird thing, it's like I said, like, I think like this year, right now until the end of the

01:15:53 ◼   ► year, the 5C is exactly what Apple wanted. They've got this, you know, a nice phone,

01:15:59 ◼   ► everybody likes it, it's easily advertised, it's colorful. But because they didn't rev it last year,

01:16:06 ◼   ► my assumption is, at the end of this year, the 5C as we know it goes away. That just, you know,

01:16:12 ◼   ► falls off the bottom of the product list and it's gone and it's replaced by what? If they just keep

01:16:20 ◼   ► moving things down the line, it would be replaced by the 5S, which does have touch ID but doesn't do

01:16:26 ◼   ► retail Apple Pay. Like, it only does Apple Pay like in apps, which it doesn't seem to have taken off

01:16:33 ◼   ► yet. Right. Because it doesn't have NFC. Right. And it also, if they do that, it goes against my

01:16:40 ◼   ► thinking that they want the bottom of the line phone to not have that premium metal industrial

01:16:47 ◼   ► design like so I don't know like do they come out with a new plastic model that debuts at that free

01:16:54 ◼   ► tier I I well it seems like an awful lot of new SKUs right yes yes um because I also feel like part

01:17:03 ◼   ► of it just part of the reason that they can make all these new iPhones is that they're only making

01:17:09 ◼   ► one or two new phones a year and the other ones are these things you know

01:17:12 ◼   ► like the 5s that they already know how to make and it just you know just keep

01:17:17 ◼   ► making them like you did last year you know the other thing that throws a wrench

01:17:20 ◼   ► into it is what they did this year and and this is another discussion you know

01:17:25 ◼   ► to the iPad mini where they didn't update the internals at all but they

01:17:30 ◼   ► gave it touch ID and like why why even bother to do that you know when they're

01:17:35 ◼   ► when that was the only sort of upgrade that they did and now there's the whole

01:17:38 ◼   ► debate, you know, is the iPhone 6 Plus eating into iPad mini sales specifically, and what

01:17:44 ◼   ► do they do with the future of that line, and is there a future of that line?

01:17:48 ◼   ► Yeah, it's a good question.

01:17:50 ◼   ► So maybe, I don't know, like could they come out with like the equivalent of a 5C,

01:17:55 ◼   ► but just add Touch ID?

01:17:57 ◼   ► Yep, potentially.

01:17:59 ◼   ► That would be something that I might guess would be something that they do, because I

01:18:03 ◼   ► do agree that they want to keep, obviously they want to have differentiating factors

01:18:07 ◼   ► for the premium.

01:18:08 ◼   ► But I do think that their strategy is pretty strong

01:18:12 ◼   ► right now around Apple Pay.

01:18:14 ◼   ► And I would imagine that they want--

01:18:16 ◼   ► like we talked about earlier-- they

01:18:17 ◼   ► want that to be a moat, a new moat, that sort of creates

01:18:21 ◼   ► a reason why you're in the Apple ecosystem,

01:18:23 ◼   ► regardless of which device you have.

01:18:25 ◼   ► And so my guess would be yes.

01:18:27 ◼   ► They have something like an iPhone 6C that

01:18:31 ◼   ► has Touch ID and NFC.

01:18:33 ◼   ► They add both of those to it.

01:18:35 ◼   ► - Yeah, but maybe like old, a seriously older A series chip,

01:18:39 ◼   ► like an A6 or something like that.

01:18:41 ◼   ► - Right, and that's how they differentiate.

01:18:43 ◼   ► It's not nearly as fast as sort of the high end,

01:18:45 ◼   ► and it's maybe plastic, so plastic not as fast,

01:18:48 ◼   ► the camera's not quite as nice,

01:18:50 ◼   ► but it does still have Apple Pay and Touch ID.

01:18:54 ◼   ► - Yeah, at the very least, I can't imagine that they'll ever,

01:18:58 ◼   ► at any price point, I can't imagine that they'll ever

01:19:00 ◼   ► come out with any new iPhones that don't do NFC

01:19:03 ◼   ► and Apple Pay.

01:19:05 ◼   ► - Yeah, I agree.

01:19:06 ◼   ► - But it's a question, a big question is,

01:19:08 ◼   ► if they keep the 5S around though

01:19:11 ◼   ► and move it down the product tier,

01:19:15 ◼   ► that's another year then though that they have a phone

01:19:18 ◼   ► that doesn't have Apple Pay and NFC.

01:19:21 ◼   ► - Yeah, and yeah, I mean that's an interesting dilemma

01:19:25 ◼   ► for them to have, though they've always dealt

01:19:29 ◼   ► with that fine in the past, sort of keeping those products

01:19:31 ◼   ► around longer than anyone else thinks that they should

01:19:33 ◼   ► and obviously they have the data to back that up

01:19:36 ◼   ► that they should do that.

01:19:37 ◼   ► - Yeah, totally.

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01:24:12 ◼   ► All right, anything else on your mind?

01:24:14 ◼   ► - No, I mean, I'm still, so I was back in San Francisco

01:24:20 ◼   ► when, a couple weeks ago, for a while.

01:24:24 ◼   ► And I've been sort of going back and forth

01:24:28 ◼   ► about Apple Watch, so unlike you,

01:24:29 ◼   ► I wasn't at the event, the unveiling,

01:24:32 ◼   ► and so I didn't get a chance to sort of see it

01:24:34 ◼   ► and sort of get a better sense of what it was.

01:24:36 ◼   ► I watched the keynote, sort of it's great

01:24:39 ◼   ► that they stream it live, and so I could watch it here,

01:24:41 ◼   ► despite their technical hiccups,

01:24:42 ◼   ► which I'm sure you heard about.

01:24:43 ◼   ► You know, they-- - Yeah, that was bad.

01:24:46 ◼   ► - Yeah, it was really bad.

01:24:48 ◼   ► But they fixed it a little bit for the later one.

01:24:51 ◼   ► So I wasn't sure really what to make of Apple Watch,

01:24:55 ◼   ► and I'm still sort of trying to get there,

01:24:57 ◼   ► but I had a number of interesting discussions

01:25:00 ◼   ► with people more in the know while I was back,

01:25:03 ◼   ► and sort of thinking through things

01:25:07 ◼   ► of where this is gonna go.

01:25:08 ◼   ► And I'm starting to get a lot more bullish on Apple Watch

01:25:11 ◼   ► than I was to begin with.

01:25:13 ◼   ► Not to say that I was bearish on it,

01:25:14 ◼   ► but I was sort of wondering a lot of what we talked about.

01:25:18 ◼   ► Sort of how many people are going to pay a premium

01:25:21 ◼   ► for a gold one, how many people are going to buy

01:25:23 ◼   ► the edition one, how many people are going to buy

01:25:27 ◼   ► the cheaper sport one, and what does it mean.

01:25:29 ◼   ► And then when they released the SDK,

01:25:31 ◼   ► and just like we were talking about earlier,

01:25:33 ◼   ► it sort of seemed like there were more widget-like apps

01:25:36 ◼   ► rather than true apps and it seemed like Apple was already telepathing into the future where

01:25:42 ◼   ► they're going to make them more robust apps.

01:25:44 ◼   ► So they're almost saying like, "Yeah, we're going to put this out there, but V2

01:25:47 ◼   ► of this is when things get really interesting."

01:25:50 ◼   ► And so it's sort of the old problem that Apple has had amongst many people who believe

01:25:56 ◼   ► like, "Don't buy the first version of something.

01:25:58 ◼   ► They always make it better the second version."

01:26:02 ◼   ► I am definitely getting more bullish on it now

01:26:05 ◼   ► after having sort of had a few chats

01:26:08 ◼   ► and learned a lot more about what it's actually doing.

01:26:12 ◼   ► Where's your mind at with it?

01:26:13 ◼   ► - I've never been either bullish or bearish.

01:26:17 ◼   ► Even having been at the event and even having,

01:26:20 ◼   ► I didn't get to use it

01:26:21 ◼   ► because they were all running the demo software,

01:26:23 ◼   ► but I did get to at least try one on.

01:26:25 ◼   ► I've always been ambivalent, like tell me more.

01:26:30 ◼   ► Like I need to know more about this

01:26:32 ◼   ► before I can even decide either way.

01:26:34 ◼   ► To me, the big, and I still feel that way.

01:26:37 ◼   ► That's why ultimately I still feel like

01:26:40 ◼   ► they're probably gonna have another event

01:26:42 ◼   ► before it comes out.

01:26:43 ◼   ► And if the other rumors are right

01:26:45 ◼   ► and they're gonna do like a bigger iPad,

01:26:48 ◼   ► that would make sense to do it all in one event.

01:26:50 ◼   ► And so there's a new thing, which is a bigger,

01:26:53 ◼   ► pro-sized 11-inch or 12-inch iPad.

01:26:56 ◼   ► So here's a new thing.

01:26:58 ◼   ► And here is more on this thing we announced in September, the Apple Watch, which is now imminent.

01:27:04 ◼   ► And he'd let us show you more. That to me feels like they don't even need to do anymore. That's

01:27:10 ◼   ► a perfect Apple event, a new iPad at a new size. You know, and if the thing about the stylus is

01:27:17 ◼   ► right, there's all sorts of demos they can do there, you know, bring up somebody, some third

01:27:21 ◼   ► party with, you know, show some kind of Wacom style professional artwork being drawn on the

01:27:26 ◼   ► thing and then, you know, show me more about the Apple Watch. The thing that gets me and

01:27:32 ◼   ► is the confidence that Apple seems to have about the Watch. It's not what they've told us and what

01:27:38 ◼   ► you can read at apple.com/watch. It's the confidence that Tim Cook has and everybody else

01:27:45 ◼   ► who's spoken about it publicly. They're so confident about it that to me it's it seems like

01:27:52 ◼   ► like it would be reckless to bet against it because they're just not they're not

01:27:56 ◼   ► the type of people who breathlessly promote everything and anything that

01:28:01 ◼   ► they do I agree with you definitely I think that that is something that makes

01:28:07 ◼   ► it so you can't obviously you can't write it off well you could never write

01:28:10 ◼   ► it off being from Apple these days but their confidence is is pretty

01:28:15 ◼   ► fascinating the the way that they're positioning it they're obviously still

01:28:19 ◼   ► doing this world tour of going around and talking to all the various people in the fashion

01:28:23 ◼   ► industry, hiring the various people in the fashion industry to bring them in to make

01:28:28 ◼   ► sure that they're ready to go for this.

01:28:32 ◼   ► It all adds to the feeling I'm getting.

01:28:34 ◼   ► But I also just am starting to get a better sense of what I think that they think they

01:28:43 ◼   ► can do with it.

01:28:44 ◼   ► do think that the early days will be maybe a little bit underwhelming at first because

01:28:51 ◼   ► they're only going to work with a handful of people as they always do behind the scenes

01:28:57 ◼   ► to get third party apps sort of ready to go for when this thing launches and there are

01:29:02 ◼   ► going to be obvious things and it will be largely predicated around push notifications

01:29:05 ◼   ► I would assume. But I am starting to believe more that there's different types of things

01:29:11 ◼   ► that third-party developers will be able to accomplish.

01:29:14 ◼   ► And maybe it takes to the second SDK, the more robust thing, for it to really get there.

01:29:19 ◼   ► But I'm reminded back to when the iPhone first came out and we had developers making the

01:29:26 ◼   ► web apps because they didn't have access to actually making native apps at the time, only

01:29:29 ◼   ► Apple did.

01:29:30 ◼   ► So it's not exactly what's going on here, but we are getting a little bit of what feels

01:29:34 ◼   ► like a muted SDK for third-party developers right now.

01:29:39 ◼   ► I think it's somewhat analogous.

01:29:41 ◼   ► I think it's a little bit better than the web apps of 2007,

01:29:45 ◼   ► but it's close.

01:29:47 ◼   ► It's not a bad analogy.

01:29:50 ◼   ► - I agree.

01:29:50 ◼   ► And so now I'm trying to think through,

01:29:53 ◼   ► when Apple did release the second sort of SDK for the iPhone

01:29:58 ◼   ► that allowed for native app development,

01:30:01 ◼   ► it was insanely exciting to everyone,

01:30:03 ◼   ► but no one really knew what would happen.

01:30:05 ◼   ► We knew games would come

01:30:06 ◼   ► and there would be sort of silly little apps to begin with,

01:30:09 ◼   ► which there were, there were many.

01:30:11 ◼   ► And then it wasn't clear if there would ever be

01:30:13 ◼   ► like big businesses, right, or real businesses

01:30:15 ◼   ► built on top of that.

01:30:16 ◼   ► And look at it now, I mean, how many billion dollar

01:30:19 ◼   ► businesses have been built on top of the iPhone alone?

01:30:22 ◼   ► You know, and Android and stuff,

01:30:24 ◼   ► but the iPhone is what kicked it off.

01:30:25 ◼   ► It's like Instagram and all these other things

01:30:27 ◼   ► that were iOS only at the time.

01:30:31 ◼   ► And is there a way, this is what I'm trying to think through,

01:30:33 ◼   ► is there a way for the watch to do something similar?

01:30:37 ◼   ► And your instinct is that sounds ridiculous, right?

01:30:40 ◼   ► Like that there's this watch, this small little device that just seems like more of

01:30:46 ◼   ► a novelty, or is it going to actually be something that big businesses can be built on?

01:30:51 ◼   ► And I think that there's two camps.

01:30:53 ◼   ► There's people who believe that eventually we will get to that place and there can be

01:30:57 ◼   ► sort of new interactive paradigms with sort of the taptic feedback stuff and there will

01:31:02 ◼   ► be new types of messaging apps that we haven't thought of yet.

01:31:05 ◼   ► But then there's the other group that I think is more along the lines of, look, the

01:31:09 ◼   ► Apple Watch, here's what it is.

01:31:11 ◼   ► It's just another moat for the iPhone.

01:31:14 ◼   ► It's a way, you can't use it right now without the iPhone.

01:31:17 ◼   ► It's a paired device with that, and so it makes the iPhone more attractive to iPhone

01:31:22 ◼   ► owners and it gives people maybe another reason to buy an iPhone rather than choosing an Android

01:31:28 ◼   ► device or some other similar device.

01:31:31 ◼   ► Yeah, I don't know.

01:31:34 ◼   ► I feel like both of those scenarios are possible.

01:31:37 ◼   ► I do feel like ultimately it's, you know,

01:31:40 ◼   ► just the march of technology is that eventually

01:31:42 ◼   ► it will be independent.

01:31:43 ◼   ► Like it won't need, you know,

01:31:45 ◼   ► it'll have its own internet access without an iPhone.

01:31:48 ◼   ► Just to me exactly the way that the iPhone

01:31:52 ◼   ► used to need a Mac or PC running iTunes to sync.

01:31:57 ◼   ► I mean, it's still, it seems crazy.

01:31:58 ◼   ► Like there was only way to get contacts on your iPhone

01:32:00 ◼   ► was to sync it with your computer using a cable.

01:32:04 ◼   ► And I kind of feel like the watch needing a phone

01:32:07 ◼   ► Within Bluetooth range to get internet is the same thing like, you know, three four or five years from now

01:32:14 ◼   ► We're gonna laugh at the fact that you couldn't get text messages on your phone unless you were within

01:32:19 ◼   ► You know 20 feet of your or on your watch unless you were within 20 feet of your phone

01:32:23 ◼   ► But in the meantime, I do feel like that's the way that you bootstrap it is that it's again

01:32:30 ◼   ► Like you said like a moat around the iPhone

01:32:32 ◼   ► I think that's how it debuts and then all of a sudden you realize it's you know, two three four years from now

01:32:37 ◼   ► It's its own thing. That's right. I agree with that

01:32:40 ◼   ► And I think I think they're going about it the right way with everything that they've sort of shown so far

01:32:46 ◼   ► You know having used a lot of these other sort of wearable devices. They're all they all range from either very bad to sort of just

01:32:53 ◼   ► Mediocre there's no great one right now

01:32:54 ◼   ► And I think a lot of it is that a lot of a lot of these companies have just basically taken

01:33:00 ◼   ► the phone paradigm that the smartphone the touchscreen paradigm and strapped it on the wrist and

01:33:05 ◼   ► Apple with this crown sort of interaction they're trying to actually think about what they should do

01:33:11 ◼   ► I mean you're putting your hate when you're touching the screen all the time

01:33:15 ◼   ► You're completely covering the screen like why would you do that?

01:33:18 ◼   ► You know so like the crown where you can zoom in and out that that's like sort of

01:33:22 ◼   ► Is an obvious thing in hindsight that I think is is going to be sort of a?

01:33:27 ◼   ► a killer feature that everyone ends up copying, of course,

01:33:30 ◼   ► but it's things like that that make me more excited

01:33:33 ◼   ► about the prospects for it, though I agree

01:33:37 ◼   ► with sort of everything we're saying,

01:33:38 ◼   ► which is that the first iteration,

01:33:40 ◼   ► it will take a while to prove these things out.

01:33:43 ◼   ► - Yeah, I think that the crown in particular

01:33:46 ◼   ► is one of the reasons, like why did they announce it

01:33:49 ◼   ► when they announced it?

01:33:50 ◼   ► Well, part of it is, like I wrote this week,

01:33:53 ◼   ► part of it, I think, is that they wanted to announce it before it went into production,

01:34:00 ◼   ► because once it went into production, it was inevitably going to leak. And in fact, it did

01:34:04 ◼   ► leak. There was, like, one day before they announced it, there actually were, like,

01:34:09 ◼   ► blueprints that leaked that were, in hindsight, were pretty much spot on, or exactly spot on.

01:34:15 ◼   ► They didn't get a lot of publicity because they weren't real pictures, but if it had happened even

01:34:20 ◼   ► a week earlier somebody you know could have done like a 3D rendering and and and spoiled it i think

01:34:27 ◼   ► they really wanted to be the ones to unveil it and they're glad they did um six months is about the

01:34:34 ◼   ► outer limit i think for when apple could do it i think and you know i think it's also possible that

01:34:41 ◼   ► in in like an ideal world if everything had gone according to plan maybe it wouldn't be shipping in

01:34:45 ◼   ► April, maybe it would have been shipping like in February. And it's just, you know, enough bugs

01:34:53 ◼   ► still remain, enough kinks still remain in the software that they need the extra two months

01:34:58 ◼   ► before they feel comfortable shipping. But well, I also I definitely heard that they did want to

01:35:03 ◼   ► do this in the fall. And it just Oh, originally, yes, definitely. Yeah. Like, and in hindsight,

01:35:09 ◼   ► with some of Tim Cook's remarks, like it all things D or whatever. That's right. You know,

01:35:14 ◼   ► I think the year before that they, you know, they have a, they have products to release all

01:35:17 ◼   ► throughout 2014. Yeah, I think, like two years ago, they were thinking like a holiday release

01:35:23 ◼   ► for 2014. So I think it's, I think that's definitely the case. I've heard the same thing,

01:35:26 ◼   ► too, like internally that it's, you know, yeah. Not that they're shocked. I don't think it's

01:35:32 ◼   ► like a disaster. I just think it's, yeah, it just took it just was not the best case scenario.

01:35:38 ◼   ► Yeah, there's soft it's and it's, I think it's largely software rather than

01:35:42 ◼   ► Yes, the hardware that's going on. It's a software. It's hard to nail this this new sort of paradigm that they're trying to do

01:35:48 ◼   ► Yeah, I think that the hardware that they and who knows I mean because you know

01:35:53 ◼   ► It's not like they were letting us crack open the demo units back in september

01:35:57 ◼   ► But i'm pretty sure that the hardware they showed us at the event in september

01:36:01 ◼   ► Is exactly the hardware they intend to show. I think i'm pretty sure that it is. Yeah

01:36:05 ◼   ► Yeah, and that they're like internally like johnny ives team is already working on the next

01:36:12 ◼   ► revision of the hardware like that's they've you know, the hardware is done and defined and you know, it's that screen and

01:36:19 ◼   ► That chip and that metal and you know everything down to the bands that that stuff is all done. It's yeah

01:36:25 ◼   ► I think it's all software that's still

01:36:27 ◼   ► being worked on and of course the

01:36:30 ◼   ► component of that is the battery life and what do you think about sort of I'm sure you saw the the Mark Gurman report about the

01:36:37 ◼   ► The breakdown of the battery life issue and so it's you know, I think it was 2.5 hours of full active usage

01:36:43 ◼   ► Which is a little bit?

01:36:46 ◼   ► You know misleading because are you gonna be sitting there on your watch for two two and a half straight hours using it straight through?

01:36:52 ◼   ► No, but what do you think is that like in the ballpark you thought it would get to?

01:36:57 ◼   ► Yeah, I think that the basic gist is that they need to make it so that if you're an act if you use your Apple

01:37:04 ◼   ► watch thoroughly that you can still get through a day, no problem.

01:37:08 ◼   ► I've seen some stuff.

01:37:11 ◼   ► You know the demo units they showed us on all the screenshots they show us don't show a battery meter all the time.

01:37:18 ◼   ► And the simulator in Xcode does.

01:37:24 ◼   ► So there's some question as to whether you know where they've you know what are the actual production ones are going to do?

01:37:30 ◼   ► Yeah.

01:37:31 ◼   ► how are you going to check the battery? Like it seems as though what they've shown us so far is

01:37:35 ◼   ► that you're not supposed to even, I'm sure there's some way to do it, like go into settings and

01:37:39 ◼   ► there's, you know, if you really want to check your battery there'll be a way. I feel like what

01:37:44 ◼   ► they want to do is just get it so that it, you know, if you charge it every night you'll be fine

01:37:50 ◼   ► and you don't have to worry about it. And if you forget to charge it one night you're probably

01:37:54 ◼   ► gonna, it's probably gonna die the next day. And you know, one thing, so as we know with the phones

01:38:00 ◼   ► now and iPad and everything else.

01:38:02 ◼   ► The biggest power draw is the screen of all these things.

01:38:06 ◼   ► I think that it seems like they're doing smart things that the other smart watch makers haven't

01:38:12 ◼   ► done by the way, which is when you get notifications coming in, rather than illuminate the screen

01:38:19 ◼   ► right away, they're using their haptic thing, the haptic engine to be able to alert you

01:38:24 ◼   ► to that.

01:38:25 ◼   ► The screen is going to be on probably less than you think it is because we all see these

01:38:29 ◼   ► smartwatches out there right now that light up when whenever you get something

01:38:32 ◼   ► and that's not gonna be the case with this yeah I mentioned last week with

01:38:36 ◼   ► when Ben Thompson was on the show that from what I've heard from a couple

01:38:39 ◼   ► people again not firsthand not anybody who has a watch but all secondhand from

01:38:43 ◼   ► people who've talked to people who are testing a watch is that an enormous

01:38:47 ◼   ► amount of effort has gone into making it so that when you do want to look at the

01:38:51 ◼   ► screen it comes right on like the detection of your wrist and you know the

01:38:55 ◼   ► the motion detection of what angle the watch is at. Hey, I'll bet this, you know, the person

01:39:01 ◼   ► wants to look at me right now. And then when you move it away, it goes off. That they've,

01:39:05 ◼   ► you know, an enormous amount of work over the last three years has gone into just turning the screen

01:39:11 ◼   ► on and off when it wants to be on and off. And I feel like the Gurman stuff is interesting. It's,

01:39:17 ◼   ► you know, I have no reason to doubt that those are the actual numbers. I just feel, though,

01:39:21 ◼   ► that it's like it almost doesn't it isn't really helpful to thinking about how you're going to use

01:39:26 ◼   ► the watch it's it's just sort of their enumerating that's right i'm 100 in agreement with that it's

01:39:35 ◼   ► sort of it's thinking it's it's yes it's it's sort of the spec sheet it's what it will be like if you

01:39:41 ◼   ► were just in a in a vacuum if you just said like give me the numbers of what it's going to do when

01:39:45 ◼   ► it's like this and this but i think the key is that the way that it's been engineered the apple

01:39:50 ◼   ► watch will change the way that people at least right now think that they're going to use it

01:39:56 ◼   ► it's not going to be all the time coming on and it's not going to be you have a hard time you know

01:40:01 ◼   ► turning the screen off or you have to hit a button to turn the screen on and off and all that kind of

01:40:05 ◼   ► stuff and so yeah i think it will end up lasting a lot longer than people are sort of thinking about

01:40:09 ◼   ► just reading that that that stat line yeah the polar opposite to me would be the um the now

01:40:17 ◼   ► defunct iPod nano or whatever it was called the one that was square and then yeah there was the

01:40:24 ◼   ► I think it was yeah the watch fans yeah the tick tock kick card yep starter which is like it right

01:40:29 ◼   ► I bought I did too which I think at the time was like the broke the record for like a kickstarter

01:40:34 ◼   ► project it did and it really was well done it was as well done as a turn your iPod nano into a watch

01:40:43 ◼   ► could be done, I think. But I got it, I popped my iPod into it, and five minutes later took it off

01:40:52 ◼   ► and never used it again because the idea of a watch that you had to hit a button to read

01:40:57 ◼   ► drove me nuts. Because there was no motion detection because the iPod wasn't meant for that.

01:41:02 ◼   ► So to see the time or do anything with it, you had to use your other hand and hit the button.

01:41:07 ◼   ► and as a watch it was you know and I you know I could see why some people's liked

01:41:14 ◼   ► it but for me as somebody who wears a watch and just wants to glance at the

01:41:18 ◼   ► time it was maddening and I feel like the Apple watch is the opposite of that

01:41:22 ◼   ► and that sort of also leads to one last thing I know we were going for a while

01:41:26 ◼   ► but I don't know when we'll talk again so I want to there's so with that you

01:41:30 ◼   ► know you also had if you wanted to listen to music which is what you do of

01:41:32 ◼   ► course mainly with an iPod you had to have you know your your white earbuds

01:41:37 ◼   ► plugged into your wrist and then they would be going up to your ears right and

01:41:41 ◼   ► it's like yeah if you're trying to run you could you know rip the earbuds out

01:41:45 ◼   ► of your ears if you were for some reason you know moving your arms too far or

01:41:49 ◼   ► something that leads to a question which I have no idea but I and I don't know if

01:41:55 ◼   ► they're gonna do this anytime soon or if this waits till sort of the fall or the

01:41:58 ◼   ► next version or something but like they have to be doing something with Bluetooth

01:42:02 ◼   ► earbuds right I mean there's no way that they can they're they're already saying

01:42:06 ◼   ► that you'll be able to store music and some podcasts and they'll have limited storage

01:42:10 ◼   ► to be able to do that and they want you to be running with it and you can have sort of

01:42:15 ◼   ► be able to listen to your music. And they're saying, I think they said in the press material

01:42:18 ◼   ► or whatever, you can use your Bluetooth running. People have special running Bluetooth headsets

01:42:24 ◼   ► that they already use and they're decent or whatever, but that's not going to be good

01:42:27 ◼   ► enough for Apple. They're going to want to do their own, right? And when are they going

01:42:29 ◼   ► to do that?

01:42:30 ◼   ► - Yeah, it's a perfect has to happen eventually idea.

01:42:35 ◼   ► And again, I think having used the iPod Nano

01:42:41 ◼   ► with the TikTok watch strap, I had the exact same thing.

01:42:43 ◼   ► I thought, well, when I sent it for the Kickstarter,

01:42:46 ◼   ► I thought, I'm probably not gonna like this as a watch

01:42:48 ◼   ► because I'm not gonna like a watch

01:42:50 ◼   ► that I have to hit a button to see,

01:42:51 ◼   ► but I might like it as something to use my iPod

01:42:54 ◼   ► when I go running.

01:42:55 ◼   ► And in fact, I hated it because of exactly what you said,

01:42:58 ◼   ► that having the cable go to my wrist

01:43:01 ◼   ► and my arm is moving while you run, it was maddening.

01:43:06 ◼   ► It just felt like I was, I don't know.

01:43:11 ◼   ► It felt like the sort of thing that you,

01:43:13 ◼   ► like when you're on probation and they put like a, right.

01:43:18 ◼   ► But I can't help but feel the same thing

01:43:23 ◼   ► with the Apple Watch.

01:43:24 ◼   ► I mean, the watch clearly doesn't even have a headphone jack

01:43:27 ◼   ► So it's going to, and it does do Bluetooth audio.

01:43:32 ◼   ► So if the watch does Bluetooth audio

01:43:34 ◼   ► and the future is to not have a cable

01:43:37 ◼   ► between your headphones and your device period,

01:43:40 ◼   ► Apple has to do Bluetooth.

01:43:42 ◼   ► My question though is if Apple goes

01:43:44 ◼   ► and does Bluetooth headphones of their own,

01:43:47 ◼   ► are they going to be included with devices?

01:43:50 ◼   ► Or-- - Yeah, interesting.

01:43:52 ◼   ► - And/or if they're not, will they do them themselves

01:43:56 ◼   ► will it be like a beats thing? Well, so remember how they used to have, I think they still

01:44:01 ◼   ► probably sell them. They had those more high-end version of any ear earbuds because I bought

01:44:06 ◼   ► them at one point. They were like $100 or something.

01:44:08 ◼   ► Yeah, I remember that.

01:44:09 ◼   ► Or $20 for the other ones. And they were pretty good. They were okay. They had like three

01:44:12 ◼   ► different sort of sizes that you got the earbud gel things that you could sort of stick in

01:44:18 ◼   ► your ears depending on how big your ears are. And they were okay. They were definitely better

01:44:22 ◼   ► than the old version of the earbuds that came with all the iPods and everything. I don't

01:44:28 ◼   ► think they're better than the new version of the earbuds, at least I don't use those

01:44:33 ◼   ► higher end versions. I'm not even sure if they sell them. I think that they still do.

01:44:37 ◼   ► But I would imagine that's how they do it at first at least, that they sell them as

01:44:40 ◼   ► like, because it'll probably be expensive to make, more expensive than the current iteration.

01:44:44 ◼   ► So maybe they sell them for those $100 and then eventually they sort of move towards

01:44:50 ◼   ► because that is something I always think about, you know, like what else can they do to improve

01:44:54 ◼   ► the iPhones right now? And the biggest pain point now is honestly untangling the damn

01:44:59 ◼   ► earbuds when they're in my pocket. I know that they're like, you know, everyone, I

01:45:03 ◼   ► complain about this from time to time on Twitter and everyone comes at me with like, "You

01:45:07 ◼   ► should get these ties," or, you know, "This thing," and they have all these like third

01:45:10 ◼   ► party products to like make it better. But like really, I just want, I don't want to

01:45:14 ◼   ► carry around more stuff. I just want to have my earbuds and I want to have the phone in

01:45:18 ◼   ► in my pocket and I want the earbuds not to somehow defy the laws of physics and get so

01:45:24 ◼   ► tangled up that it seems like you have to cut them almost to in order to untangle them.

01:45:29 ◼   ► And so it's another thing that really strikes me in the winter too because it's so much

01:45:34 ◼   ► more of a pain in the ass when you're wearing a coat and yeah and you've got these these

01:45:40 ◼   ► things dangling right and it's like when do you there's no good way to do it like if you

01:45:46 ◼   ► you know, wanna listen to podcasts.

01:45:47 ◼   ► Like, you know, I walk almost everywhere in the city

01:45:49 ◼   ► and I run errands and that's when I listen to podcasts

01:45:52 ◼   ► and it's great, but when it's winter

01:45:53 ◼   ► and I have to wear a coat, it's like, what do I do?

01:45:55 ◼   ► Do I put it in my pocket and start listening to podcasts

01:45:58 ◼   ► and put the coat over the headphones?

01:46:00 ◼   ► And then it like, it pulls.

01:46:02 ◼   ► But if you put the coat on first

01:46:04 ◼   ► and string it over the coat,

01:46:06 ◼   ► it, there's just no good way with the cable.

01:46:08 ◼   ► Like, as opposed to when you're not wearing a coat,

01:46:10 ◼   ► you can just put your phone in the pocket

01:46:12 ◼   ► and it's not too much of a hindrance

01:46:13 ◼   ► to have the headphone cable going

01:46:14 ◼   ► your jeans pocket to your ears, put a winter coat on and it there's no good way. It's hard to do.

01:46:20 ◼   ► Have you have you tried one of the bluetooth ones before? So it's like funny, you know,

01:46:24 ◼   ► going back into the late 90s or whatever when they first came out, obviously they sort of got this

01:46:28 ◼   ► douchey, you know, sort of aura around them. But I use the I use the jawbone era, I think it's

01:46:37 ◼   ► called the era quite often now. The problem is that it's only obviously one year so it's not

01:46:42 ◼   ► great for music, you can do it for music, but for podcasts and stuff it's pretty good.

01:46:48 ◼   ► The only other downside is with one ear, you have to turn it up quite high sometimes, like

01:46:53 ◼   ► if you're in a louder environment to be able to hear.

01:46:56 ◼   ► And I never use it for calling or anything, but I honestly don't make that many calls,

01:47:00 ◼   ► so I don't use the speaker part.

01:47:02 ◼   ► But I use it a lot just to listen to things.

01:47:05 ◼   ► It's a little bit wonky, the Jawbone software isn't great, and so it can take a little

01:47:09 ◼   ► a while to pair and sometimes it drops and it's great not great audio quality I would

01:47:13 ◼   ► say but it's good for podcast definitely yeah I would probably enjoy that if I had

01:47:18 ◼   ► one but I've never tried it yeah I you know I haven't tried any of the others but the

01:47:22 ◼   ► job on one is pretty solid I kind of wonder what the form factor would be for like an

01:47:26 ◼   ► Apple Bluetooth headset like you know would would would they be connected somehow and

01:47:32 ◼   ► if so what would it be like a thing that goes around the back of your head hmm yeah that's

01:47:38 ◼   ► an interesting point there. I've seen both. I've seen ones that are like that, where they have a

01:47:41 ◼   ► thing that goes around the back of your head. I think I've also seen one where they still have

01:47:45 ◼   ► something dangling, but it's not connected.

01:47:47 ◼   ► Right, because somewhere there's got to be a battery.

01:47:49 ◼   ► So it can't just be the earpieces. Ideally, it would just be two earpieces that you put in

01:47:56 ◼   ► independently.

01:47:57 ◼   ► Right, but then you'd need two batteries, and one of the reasons why I think the jawbone one is

01:48:04 ◼   ► bigger than it even needs to be is just because of the battery, obviously. And the battery's not

01:48:08 ◼   ► great by the way either that thing lasts for it says four hours of talk time i think it's it's

01:48:12 ◼   ► usually like two and a half hours max it will last yeah i feel like that's it's gotta happen but i

01:48:18 ◼   ► don't have i have no idea how it's gonna happen i feel like bluetooth has you know the headphone

01:48:22 ◼   ► cables have got to go the way to the dodo and the other thing too that's got to be a motivation for

01:48:27 ◼   ► apple is just staring at my iphone 6 right now i can't help but look at it and think that the

01:48:32 ◼   ► headphone jack has now a gating factor on making it thinner.

01:48:36 ◼   ► Yes, that's the biggest part.

01:48:38 ◼   ► You know, the lightning adapter is so much thinner than the headphone jack.

01:48:45 ◼   ► And whatever the thickest port is on your device is going to be the next one Apple gets rid of,

01:48:53 ◼   ► and right now it's the headphone jack.

01:48:54 ◼   ► Well, and obviously they're starting, I think, pretty soon. I think they have a few already,

01:48:59 ◼   ► But they there was some story that they're gonna start shipping the lightning ones, right?

01:49:03 ◼   ► So you'll be able to do audio through the lightning port and so I'd imagine that's how they do it

01:49:07 ◼   ► Maybe even starting next year or something that they they just sort of get rid of the headphone jack and and my god

01:49:14 ◼   ► I can't wait for people to complain about that

01:49:15 ◼   ► That will be you know

01:49:16 ◼   ► That's gonna be the next getting rid of the optical drive and you know

01:49:19 ◼   ► Killing the mouse and all these types of things like when they kill that audio that headphone jack. It's gonna be

01:49:26 ◼   ► It's gonna be a shit store and people are gonna say it's because they own beats and beats. Well, that's right. That's right

01:49:32 ◼   ► Yeah, it's all we'll have an antitrust

01:49:34 ◼   ► investigation, you know like

01:49:36 ◼   ► It's all it's all a scheme to get you to buy beats headphones

01:49:39 ◼   ► But I would assume that that's what they're gonna do

01:49:44 ◼   ► It seems like only natural because you can actually drop it. You can draw power from that too

01:49:49 ◼   ► Which is pretty interesting, right? So you could have a pair of headphones that are connected still but

01:49:55 ◼   ► you know, like the noise canceling ones,

01:49:57 ◼   ► where right now you need like AAA batteries,

01:50:00 ◼   ► but like the Bose ones that cancel out the noise,

01:50:03 ◼   ► but they need AAA batteries to put in them.

01:50:05 ◼   ► And if you could just draw the power from the phone,

01:50:07 ◼   ► that's interesting, but that doesn't alleviate the,

01:50:10 ◼   ► that actually probably exacerbates the cord issue still.

01:50:13 ◼   ► - Yeah, probably.

01:50:14 ◼   ► Yeah, well, it would have to.

01:50:16 ◼   ► Yeah, and then the other thing,

01:50:19 ◼   ► I was thinking like, 'cause noise canceling,

01:50:21 ◼   ► whenever I think of noise canceling,

01:50:23 ◼   ► I used to have a pair of Bose noise canceling,

01:50:26 ◼   ► and I do, I kind of miss them whenever I'm on a plane,

01:50:28 ◼   ► because they really do work, and I always think of them

01:50:31 ◼   ► as something you wear on a plane.

01:50:33 ◼   ► - But they're just so bulky to carry around.

01:50:35 ◼   ► - Exactly, it's such a huge,

01:50:37 ◼   ► they're so big compared to earbuds.

01:50:39 ◼   ► And if they drew power, that's the other thing too,

01:50:44 ◼   ► is that you don't wanna get off the plane

01:50:45 ◼   ► and have your phone be dead

01:50:46 ◼   ► because you were powering your headphones.

01:50:49 ◼   ► And if you've, there's only one lightning adapter,

01:50:51 ◼   ► So even if you're on a plane depending on your airline if you have a you're lucky enough to be on a plane where you

01:50:56 ◼   ► Can have a power port?

01:50:58 ◼   ► Are you gonna charge it while you're while you're using it for lightning to do the headphones?

01:51:03 ◼   ► Yeah, I feel like Bluetooth is the way to go

01:51:06 ◼   ► Yeah, the only way that that would their trade-off would be good

01:51:09 ◼   ► There is if is if by drawing power from the phone you could significantly reduce the bulk of the noise cancelling

01:51:16 ◼   ► So they didn't need the battery obviously

01:51:18 ◼   ► But I don't know. I don't know what's involved in sort of the noise canceling technology

01:51:22 ◼   ► But I cannot help but think that the headphone jack is going the way of the dodo

01:51:26 ◼   ► I mean, I really I honestly don't know how much thinner they could make the device and still have it

01:51:30 ◼   ► I mean a little bit just looking at it, but it's really and then could they could they do stereo speakers then?

01:51:36 ◼   ► do you think on the

01:51:38 ◼   ► You know at the bottom where they only have the one sort of side is is the speaker could they do both would they do?

01:51:43 ◼   ► both

01:51:46 ◼   ► I feel like I've never gotten a definitive answer on it, but when I've brought it up with people at

01:51:51 ◼   ► Apple, they've always said that it's a gimmick because it's too close. It doesn't make it,

01:51:55 ◼   ► it actually doesn't make a difference. Yeah, that's right. I've heard the same thing. It's sort of,

01:51:59 ◼   ► it wouldn't matter. You're exactly right. I think it might matter a little bit if, and I've seen

01:52:04 ◼   ► some phones, you know, like with Android, you can find a phone that does anything, you know, there's

01:52:08 ◼   ► some obscure Sony one that has like speaker on the top and the bottom. So that when you hold the phone

01:52:14 ◼   ► in horizontal mode like you would when you're watching a video, there's a little bit more

01:52:20 ◼   ► separation and I could see it would make a difference. But for the most part, you know,

01:52:23 ◼   ► if you have stereo speakers on the bottom, just on one side of the phone, it's pointless.

01:52:28 ◼   ► And in fact, when you're watching video sideways, it's counterproductive.

01:52:32 ◼   ► Right.

01:52:33 ◼   ► Because, you know, what's the point of having left and right when they're both on the right,

01:52:36 ◼   ► because that's how you're holding the phone. Like it's, you know, so that's what I've heard,

01:52:41 ◼   ► Is that it's just a stupid marketing checkpoint that they're not going to go for

01:52:44 ◼   ► That was one of the rumored features though of the ipad pro right that it might have stereo like because it would have

01:52:51 ◼   ► Speakers on both sides who knows if that's that's gonna end up being legitimate at all

01:52:55 ◼   ► But I think that was at one point like I thought I still think though

01:52:58 ◼   ► It would only make sense if they were at the top and bottom not left and right because yeah

01:53:02 ◼   ► That's how you watch video and video is when you want it like who cares if your alert sounds come in stereo

01:53:07 ◼   ► that's right or

01:53:10 ◼   ► what they could do if they do actually do some sort of keyboard device with the iPad Pro.

01:53:17 ◼   ► Maybe they could do it just like they do with MacBooks now where they have the speaker sort

01:53:20 ◼   ► of built under the keyboard. Yeah, something like that I could see. I don't know, but I

01:53:23 ◼   ► don't think putting them on the actual sides of the device makes any sense. Yeah. All right,

01:53:30 ◼   ► I think that about does it. Good talking to you. We shouldn't make it so long this next time.