The Talk Show

00:00:00 ◼   ► My laptop, I had to get a new one because I dropped my old one in a very unfortunate

00:00:04 ◼   ► turn of events.

00:00:05 ◼   ► And I ran that one from scratch because I stupidly didn't get a big enough hard drive

00:00:10 ◼   ► to just copy everything over.

00:00:12 ◼   ► And man, it's awful.

00:00:14 ◼   ► It's awful just trying to get everything.

00:00:16 ◼   ► I remember all the weird stuff you have installed.

00:00:18 ◼   ► Rookie move.

00:00:19 ◼   ► Well, no, because I had to buy it on an emergency loan.

00:00:23 ◼   ► I was traveling.

00:00:24 ◼   ► You had to get the one that's in the Apple store and they've only got like the 512 or

00:00:28 ◼   ► whatever.

00:00:29 ◼   ► - One with 512, yup.

00:00:30 ◼   ► And so I bought the biggest,

00:00:31 ◼   ► one with the biggest hard drive that I could get, so.

00:00:33 ◼   ► - Yeah, I could see that.

00:00:34 ◼   ► And that's really where it sucks

00:00:36 ◼   ► that you can't upgrade shit like that anymore.

00:00:39 ◼   ► - I don't.

00:00:40 ◼   ► (laughing)

00:00:41 ◼   ► - 'Cause I would just,

00:00:43 ◼   ► I would just,

00:00:44 ◼   ► I would just

00:00:45 ◼   ► buy the one, you know,

00:00:48 ◼   ► if you could. - I just sell it by doing.

00:00:49 ◼   ► - Yeah, you should just sell the whole machine.

00:00:51 ◼   ► But what I would do is,

00:00:52 ◼   ► if I had to buy like an emergency one

00:00:53 ◼   ► and got like 512 instead of one terabyte,

00:00:57 ◼   ► And in the hypothetical world where you could swap it out.

00:01:00 ◼   ► I would swap it out when I could and tell myself

00:01:03 ◼   ► I'll just sell that 512 and then the 512

00:01:06 ◼   ► will just sit on a shelf in my office for 10 years

00:01:09 ◼   ► until it's worth nothing because it doesn't fit

00:01:12 ◼   ► in any more computers.

00:01:14 ◼   ► - Oh, that's right.

00:01:15 ◼   ► I don't think I've ever actually,

00:01:16 ◼   ► I rationalize buying new things.

00:01:19 ◼   ► I say I'll buy the old thing,

00:01:20 ◼   ► but I never ever actually sell the old thing.

00:01:22 ◼   ► - I think I could actually profit

00:01:23 ◼   ► by hiring a personal assistant in at least the first month

00:01:27 ◼   ► and have this assistant just to sell your old stuff.

00:01:29 ◼   ► - Just sell my old shit.

00:01:31 ◼   ► I believe that I could hire an assistant

00:01:34 ◼   ► at a very generous hourly rate

00:01:37 ◼   ► and still come out ahead based on all the electronics

00:01:42 ◼   ► in my office that I really know you should sell.

00:01:45 ◼   ► Ben, how you doing?

00:01:47 ◼   ► - Yeah, I'm doing okay, how are you?

00:01:50 ◼   ► - Good, you didn't take this box.

00:01:51 ◼   ► The box lost too hard, did you?

00:01:54 ◼   ► You knew there was.

00:01:55 ◼   ► - It's complicated. I'm refusing to deal with it emotionally and stuffing it into a dark

00:02:02 ◼   ► place that will come out in an unexpected way ten years down the road.

00:02:05 ◼   ► - For those of you who don't know, Ben is a lifelong, well his favorite sport is basketball,

00:02:11 ◼   ► and pro basketball at that, and his favorite team is his home team, Milwaukee Bucks, and

00:02:18 ◼   ► they were in the playoffs this year. First time in a while, right? I mean, the Bucks

00:02:21 ◼   ► have...

00:02:22 ◼   ► No, they're there last year. The problem with the Bucks is they are a beacon of mediocrity.

00:02:28 ◼   ► They've regularly, they're either not in or they're in like the eighth seed for many years.

00:02:34 ◼   ► Or pick up the seventh seed, you know.

00:02:36 ◼   ► Right, which is fine. The problem now is we have Giannis Antetokounmpo, who is like one of the top,

00:02:42 ◼   ► you know, I think everyone agreed to top 10.

00:02:44 ◼   ► How would you, how do you pronounce his last name? I just know, I just say Giannis.

00:02:48 ◼   ► honest to God I don't even try and I've got on my wife's side we've got family

00:02:52 ◼   ► that's Greek so I mean I'm used to trying to pronounce Greek names but man

00:02:55 ◼   ► how do you say it so because it's not a Greek name it's Nigerian I've done the

00:02:59 ◼   ► kumpo so the original spelling is actually it's very it's very easy to

00:03:04 ◼   ► it's very easy to spell because it's quite straightforward let me look it up

00:03:09 ◼   ► here so the official spelling was or is it Oh a D E T OK you and Bo so you just

00:03:17 ◼   ► You just say it how it was.

00:03:19 ◼   ► Well show me that.

00:03:20 ◼   ► Paste that into the chat because I can't spell it verbally.

00:03:23 ◼   ► You know, you can't tell me how something is spelled and I can't I can't see it.

00:03:27 ◼   ► That makes so much sense.

00:03:29 ◼   ► So they so what they did is they took his Nigerian name and then they,

00:03:32 ◼   ► you know, his family, they moved to Greece.

00:03:34 ◼   ► Greasiest it. Oh, that's great.

00:03:37 ◼   ► Oh, man, that name.

00:03:38 ◼   ► Oh, man, if I were doing it play by play, I would just have that.

00:03:40 ◼   ► I would have that on the paper in front of me spelled like that.

00:03:44 ◼   ► That's like a phonetic spelling.

00:03:46 ◼   ► It's actually right. It's actually not that hard to pronounce it. That was come boss. Is that right am I saying right?

00:03:51 ◼   ► I got a kumba you emphasize the yeah, it's more the you said it right, but it's more the emphasis of the syllable

00:03:57 ◼   ► I don't know kumba I did a calm. I don't know kumba I

00:03:59 ◼   ► Did a kumba I've dead out. Yeah, I did a kumba yeah, so he was um yeah

00:04:05 ◼   ► So when he got Greek citizenship he did the spelling of his name change which wasn't until actually May May 2013, but um

00:04:12 ◼   ► So yeah, that's why

00:04:15 ◼   ► Well, he's definitely top ten. I don't I don't think that could be if they if they decided to have a new draft and every

00:04:21 ◼   ► You know like every player is eligible for the draft again. I would say he'd go before ten easily

00:04:26 ◼   ► Especially there's a new draft. He'd be top TV top three

00:04:30 ◼   ► Yeah, he might even be top one just because he's only 23 years old

00:04:32 ◼   ► Well, what what if what but what if they did it every year like like the age thing is unfair if we're gonna if we're

00:04:38 ◼   ► Gonna have a hypothetical we're gonna draft again

00:04:40 ◼   ► You know, I'm saying though if you were gonna pick up a play

00:04:43 ◼   ► you know, like if every season started as a pickup game,

00:04:46 ◼   ► and you only had him for one year,

00:04:48 ◼   ► 'cause the next year you're gonna do the same thing,

00:04:50 ◼   ► I still think he'd be top 10.

00:04:52 ◼   ► - Yeah, I think he'd probably be five or six.

00:04:56 ◼   ► You know, LeBron, Curry, Durant, and Harden go first.

00:05:00 ◼   ► - Yeah. - And then,

00:05:01 ◼   ► I think Anthony Davis and Giannis would be the next two.

00:05:03 ◼   ► - Yeah. - In some order.

00:05:06 ◼   ► - Yeah. - I think Giannis' advantage

00:05:07 ◼   ► is he handles the ball more than Davis,

00:05:09 ◼   ► whereas Davis needs someone to give him the ball more,

00:05:10 ◼   ► but I mean, Davis has just been, he's a year older,

00:05:12 ◼   ► or a couple years older and it's really showing he's been absolutely incredible these playoffs.

00:05:16 ◼   ► But if you were starting from scratch again just given his age he would probably be the

00:05:20 ◼   ► number one pick.

00:05:21 ◼   ► Yeah, that's a good bet.

00:05:22 ◼   ► 23, I mean geez.

00:05:23 ◼   ► I mean it's, you know, in the old days that's when the players, that was when they were

00:05:28 ◼   ► rookies, you know what I mean?

00:05:29 ◼   ► I mean you just gotta, you know, he has a whole career ahead of him.

00:05:32 ◼   ► Yep, absolutely.

00:05:33 ◼   ► But the point is it makes it way worse.

00:05:36 ◼   ► It makes the Bucs organizational incompetence and lack of queers of command and ownership

00:05:42 ◼   ► in fighting and like just no plan, having no plan for the future, just kind of scruffing

00:05:47 ◼   ► along season by season. That's fine when you're just kind of resigned to being a small market

00:05:51 ◼   ► middling team you can enjoy the rest of the league, which is how my basketball viewing

00:05:54 ◼   ► experience has gone. It is five million times worse when you, like the most difficult piece

00:05:59 ◼   ► in winning a championship in the NBA is the most difficult feat in team sports by far.

00:06:03 ◼   ► Like there's only five teams I think that have won more than three championships and

00:06:07 ◼   ► like 70% of the championships have been won by those five teams. Like the reality is it's

00:06:11 ◼   ► very, very, very hard to win. And because you need a few ingredients, first and foremost

00:06:16 ◼   ► is you have to have like a top five player, maybe a top 10 player, but realistically a

00:06:21 ◼   ► top five player. And we have that. And yet everything else with the team is just slathered

00:06:26 ◼   ► in incompetence. And this series is a perfect example. Just terrible coaching, terrible

00:06:31 ◼   ► habits, lots of mismatch pieces, and we lost to a team missing two of its best players.

00:06:38 ◼   ► And it's embarrassing.

00:06:39 ◼   ► - Friend of the show, Paul Kofasis and I were talking about this. Paul and I are not as

00:06:45 ◼   ► into pro basketball as you, but Paul is a Boston Celtics fan. That's his home team.

00:06:49 ◼   ► And when I was a kid, I was a big time Celtics fan because I loved the bird era Celtics.

00:06:56 ◼   ► And basketball was my sport that I played. It was the only one that I had really had

00:07:00 ◼   ► to... I liked baseball and I wished to hell, oh, how I wished I could hit the baseball.

00:07:04 ◼   ► I can't everything I hit was and I got like a practice ground ball right to the shortstop every every goddamn time

00:07:12 ◼   ► I'm the exact opposite as you I

00:07:16 ◼   ► Definitely want to be good at at basketball, right?

00:07:18 ◼   ► But I was much better at baseball baseballs by far was it was probably the sport

00:07:21 ◼   ► I was best basketball was my it was my game and I could shoot and I was a little slow

00:07:26 ◼   ► And I would play pickup games in college and and as soon as I saw for whoever I am a little tall and and so

00:07:33 ◼   ► Drexel we'd be I would play a pickup game and immediately like, you know, like, you know five minutes in

00:07:39 ◼   ► People who I'd never played with before would start calling me bird

00:07:43 ◼   ► Because you know, it's a lot of black people a lot of black guys

00:07:47 ◼   ► and I'm you know, maybe like two or three of us were white and I could shoot the three and I could pass and

00:07:53 ◼   ► They're like check out Larry Bird and it was I would be like a comma and then inside my was like, oh, that's my dream

00:08:01 ◼   ► So I love the bird era Celtics, but I you know once it once Jordan retired

00:08:06 ◼   ► I got away from the NBA for a long time, and you know I root for the Sixers now

00:08:09 ◼   ► I like the way these this team plays so anyway

00:08:11 ◼   ► Sixers are in the playoffs Bucks are in the playoffs Sixers won

00:08:14 ◼   ► Bucks were playing the Celtics took it to seven and if they would have won game seven it would have been Bucks

00:08:19 ◼   ► Sixers and I before that game seven I tried to entice Ben into booking

00:08:25 ◼   ► booking a trip to Philly where we could go

00:08:29 ◼   ► Go see the Bucks and Sixers play and to

00:08:32 ◼   ► To book it before the game and I couldn't get Ben to bite

00:08:36 ◼   ► Probably I'm a Bucks fan. I

00:08:40 ◼   ► anticipate the worst

00:08:42 ◼   ► always

00:08:43 ◼   ► The the the light at the end the tunnel is always an oncoming train. So the yeah, it's interesting

00:08:48 ◼   ► It's gonna be a replay the 80s

00:08:49 ◼   ► I think because the 80s it was always the

00:08:51 ◼   ► Selt it was the Celtic Sixers and the Hawks that were the top of the conference every year

00:08:55 ◼   ► And then either the Celtics or Sixers would knock the Bucks out in the second round of the playoffs and they'd play in the conference finals.

00:09:00 ◼   ► And then the Celtics would usually win but the Sixers won occasionally.

00:09:03 ◼   ► Yeah, but I think it's gonna be the same except the Sixers are gonna be the best of the three.

00:09:07 ◼   ► So in this case, I think the Bucks, one of those two will knock the Bucks out, the honest Bucks out in the second round every year.

00:09:13 ◼   ► And then the Celtics and Sixers are gonna play and the Sixers are gonna win most of the time.

00:09:16 ◼   ► That's my prediction of the Eastern Conference for the next two or three years.

00:09:19 ◼   ► I was too young to remember specifically the era except just, you know,

00:09:24 ◼   ► I was like my dad would be flipping through and would you know would you know my dad's a sports fan would watch but in the

00:09:28 ◼   ► Early years of that rivalry the Sixers actually had the better of the Celtics because the Sixers

00:09:32 ◼   ► Beat the Celtics in the final in a con Eastern Conference Finals in the 80

00:09:36 ◼   ► Then went on to lose to the rookie Magic Johnson Lakers and then 81 the Celtics won it all

00:09:43 ◼   ► But then in 82 was the year the Sixers won it all

00:09:46 ◼   ► So two out of those three years 80 and 82 the Sixers beat the Celtics in the fight in the Eastern Finals

00:09:51 ◼   ► That's right. Well, maybe it could turn out that way, particularly if we'll see how Imbead's

00:09:58 ◼   ► career goes. I mean, if he's in the long run, unable to stay on the court, then that could

00:10:03 ◼   ► end up being the case. I mean, Celtics are obviously set out phenomenally well. The Sixers

00:10:06 ◼   ► are. They all have a long-term process, a plan. That's the other thing about winning

00:10:10 ◼   ► a title. You need that key player, but then to get all the pieces to fit under the salary

00:10:15 ◼   ► cap and all that sort of stuff, it requires a multi-year plan. And the Bucs can barely

00:10:20 ◼   ► plan their next five minutes, much less, like quite literally if you watch their games,

00:10:24 ◼   ► much less the next five years.

00:10:25 ◼   ► So Paul Kefasas and I were talking about this the other day about this, and I think that,

00:10:32 ◼   ► I think this is, I don't know enough about hockey, so forgive me those of you who are

00:10:36 ◼   ► sports fans and who are hockey fans, but I kind of think hockey is more like baseball,

00:10:41 ◼   ► basketball, pro basketball, in the regard that I'm about to talk about, which is that

00:10:47 ◼   ► the best team as very likely, the better team is way more likely to win in basketball than

00:10:57 ◼   ► in any other sport.

00:10:58 ◼   ► Baseball, there's so much luck involved in the postseason.

00:11:04 ◼   ► And a single person, a pitcher, and how well that pitcher does in any given game.

00:11:09 ◼   ► And it's just the nature of baseball, you know what I mean?

00:11:11 ◼   ► Like it's, there's nothing quite like it where you know, you could have two guys on base

00:11:17 ◼   ► and a guy hits a home run right down the line and two feet one way it's fair and a three

00:11:22 ◼   ► run homer and two feet the other way it's foul and you get nothing.

00:11:26 ◼   ► There's just nothing like that in basketball.

00:11:27 ◼   ► There's no one possession in a game, you know, where so much can swing on such small variants

00:11:33 ◼   ► like, you know, which way is the wind blowing?

00:11:36 ◼   ► So baseball, it really takes a lot of luck.

00:11:41 ◼   ► I think hockey, because hockey you have the goalkeeper, or this goalkeeper, the goalie

00:11:46 ◼   ► that can get hot and can impact the game like hugely.

00:11:51 ◼   ► So I think hockey's probably more in the middle.

00:11:53 ◼   ► But basketball is, that's why it's the hardest sport to win, because it consistently the

00:11:58 ◼   ► best team wins.

00:11:59 ◼   ► And if you're the best team one year, you're extremely likely to be the best team the next

00:12:03 ◼   ► year.

00:12:04 ◼   ► It's a sport of dynasties.

00:12:05 ◼   ► the and especially because the thing with basketball is there's so much return to having

00:12:11 ◼   ► the best player. I mean like so it's but it's not like a goalie where you can get hot and control

00:12:15 ◼   ► the game but if you have the best player over a seven game series you're just gonna win most of

00:12:19 ◼   ► time and again that's that's why it's so frustrating watching that last series where we had the two

00:12:23 ◼   ► best players and still gonna win but I digress. Well the problem with football in terms of having

00:12:28 ◼   ► a better team win and it is pretty likely but because it's a one game one and done that you

00:12:34 ◼   ► you know, one or two bad things can happen to the better team.

00:12:37 ◼   ► And because you only get one game in the playoffs in football, you know, that adds to the luck.

00:12:43 ◼   ► Whereas basketball, you get seven games, it's best to seven.

00:12:46 ◼   ► And then in each individual game, you're talking, you know, somewhere in the order of 50 to

00:12:52 ◼   ► 60 scoring attempts per team.

00:12:55 ◼   ► So there's...

00:12:56 ◼   ► - No, closer to more than that, closer to, I mean, closer.

00:12:58 ◼   ► - Well, I mean, scores, actual scores.

00:13:00 ◼   ► I'm sorry, not scoring attempts.

00:13:01 ◼   ► - Oh, yeah, yeah, yeah.

00:13:02 ◼   ► - Yeah, all right.

00:13:03 ◼   ► a better number. You get what? Over 100 scoring attempts per team. And so you kind of get

00:13:08 ◼   ► into the long run in each individual game in a way that you don't in baseball. Or football.

00:13:14 ◼   ► But anyway. And so anyway, what Paul and I were talking about, how in a way it can make,

00:13:20 ◼   ► it makes basketball the most fair of the pro sports because the best team in the league

00:13:24 ◼   ► is by far more likely to win the championship than the best team in the other leagues is.

00:13:31 ◼   ► But it actually makes it a little bit less exciting, especially to the casual sports

00:13:35 ◼   ► fan who's like, "Oh, I want to watch the playoffs."

00:13:37 ◼   ► It's like, baseball can be terribly exciting because a team with a relatively mediocre

00:13:44 ◼   ► record who slipped into the postseason with a wild card has a pretty good chance of beating

00:13:49 ◼   ► the best team in the league.

00:13:51 ◼   ► Whereas in basketball, the eight seed is not going to beat the one seed unless there's

00:13:54 ◼   ► some kind of injury to a star player.

00:13:56 ◼   ► Yep, that's exactly right.

00:13:58 ◼   ► And that's why I think with basketball,

00:14:01 ◼   ► Golden State's gonna win the title this year.

00:14:02 ◼   ► Everyone's kind of known that for the beginning of the season.

00:14:04 ◼   ► So I think there's an aspect of people,

00:14:07 ◼   ► if all you care about is just the outcome,

00:14:11 ◼   ► then it's gonna be a less fulfilling sport.

00:14:14 ◼   ► But if you love the sport though,

00:14:18 ◼   ► it's like the ride is the journey, right?

00:14:21 ◼   ► And there's an aspect of, the NBA in particular,

00:14:24 ◼   ► 'cause the NBA has been so incredibly,

00:14:27 ◼   ► There's lots of things the NBA has done right.

00:14:28 ◼   ► One big thing is their social media policy.

00:14:31 ◼   ► You can post whatever clips you want of the NBA on YouTube or on Twitter or whatever,

00:14:36 ◼   ► and they don't police it at all.

00:14:38 ◼   ► You can go back and watch old games from the '80s on YouTube.

00:14:42 ◼   ► I just sent you a clip of this crazy dunk in this Houston, Utah game.

00:14:47 ◼   ► And unlike the NFL, which just police everything, you can do whatever you want.

00:14:50 ◼   ► And part of that is, what's come up is, there's a huge, especially among young people and

00:14:55 ◼   ► in general, and you follow that House of Highlights channel, right?

00:15:00 ◼   ► It's all NBA clips, one, because they make great clips, and two, there's no restriction

00:15:04 ◼   ► on it.

00:15:05 ◼   ► And so just kind of being a part of the ... particularly among, I think, younger people, just part

00:15:10 ◼   ► of the zeitgeist, like the NBA is so much more a part of it.

00:15:13 ◼   ► And then the NBA too, you also have that aspect where the star players are super visible,

00:15:16 ◼   ► they're not behind a mask, they have a big impact on the game.

00:15:20 ◼   ► And then the off-season and player movement and trades becomes almost as big a deal as

00:15:25 ◼   ► what's happening in the season.

00:15:27 ◼   ► It really is sort of like the soap opera, most soap-ra-esque of all the leagues.

00:15:34 ◼   ► And all that stuff.

00:15:35 ◼   ► And Twitter is such an amazing experience for the NBA in particular.

00:15:44 ◼   ► The NBA lives on Twitter.

00:15:46 ◼   ► They are sort of inseparable.

00:15:49 ◼   ► And yeah, if you're sort of into that, it's one of those things where it's easier to get

00:15:54 ◼   ► deeper and deeper and in a very sort of enjoyable way, in the best sort of way.

00:15:59 ◼   ► Yeah, that's true too.

00:16:00 ◼   ► And now that I'm easing my way back into a little bit more NBA fandom, not just this

00:16:05 ◼   ► year but in the last few years, but last summer I paid a lot more attention to the off-season.

00:16:10 ◼   ► And it really caught on on Twitter as to just how almost, like if there was an NBA show

00:16:16 ◼   ► about a fictional version of the NBA,

00:16:21 ◼   ► the off-season episodes would be better

00:16:25 ◼   ► than the in-season episodes.

00:16:28 ◼   ► I really mean it, no joke, in terms of intrigue

00:16:31 ◼   ► and stuff to argue about on Twitter,

00:16:35 ◼   ► it goes, "Alright, post-season's the most interesting,

00:16:38 ◼   ► "but the off-season is more interesting

00:16:40 ◼   ► "than the regular season."

00:16:41 ◼   ► It really is.

00:16:42 ◼   ► - Right.

00:16:43 ◼   ► Well, it also involves all the teams, too, right?

00:16:45 ◼   ► and hope springs eternal and everyone's like, "This might be the year."

00:16:49 ◼   ► And also, I think the other thing that's really interesting too is going back to that, if

00:16:53 ◼   ► you're a certain sort of person, because there is that sort of long-term nature to winning

00:16:57 ◼   ► a championship, it really does take years.

00:17:00 ◼   ► And you have Sam Henke in Philadelphia in the process and we're gonna tank, it'll be

00:17:03 ◼   ► bad for many years.

00:17:04 ◼   ► There's so many opportunities for genuine disagreement, you know what I mean?

00:17:08 ◼   ► You could have a philosophical debate about that, you could have a tactical debate, you

00:17:11 ◼   ► have a strategic debate, you could have a, "The world is falling apart" debate.

00:17:14 ◼   ► There's so many angles to just argue about endlessly.

00:17:18 ◼   ► It really is tailor made for Twitter.

00:17:20 ◼   ► What is Twitter, if not a forum, to argue endlessly?

00:17:22 ◼   ► All right, let's get into the show.

00:17:26 ◼   ► I got some follow up from last week's show.

00:17:27 ◼   ► I was Jim Dalrymple on.

00:17:29 ◼   ► I have two points I want to clarify.

00:17:31 ◼   ► One, when we were talking about this new Google chat, RCS thing that they're pushing as sort

00:17:37 ◼   ► of a successor to ... Or not even sort of.

00:17:40 ◼   ► They're pushing it as a successor to SMS.

00:17:43 ◼   ► I think I got lost in the--

00:17:46 ◼   ► - It literally is a successor to SMS.

00:17:48 ◼   ► I think that's the thing that people get,

00:17:50 ◼   ► are kind of got lost in the details a little bit.

00:17:53 ◼   ► Like it's not a chat service.

00:17:55 ◼   ► - Right. - It is literally--

00:17:56 ◼   ► - But they're calling it chat.

00:17:58 ◼   ► (laughs)

00:17:59 ◼   ► So there's two things that are confusing about it.

00:18:00 ◼   ► And I think they threw me off.

00:18:02 ◼   ► One is that it's from Google,

00:18:05 ◼   ► and we're just used to Google coming out with,

00:18:08 ◼   ► on an annual basis a new, all right, here's our new,

00:18:13 ◼   ► we're not putting a new name on the old thing,

00:18:14 ◼   ► we've got an altogether new idea to get people to chat.

00:18:18 ◼   ► And so I'm used to that, and so I attribute

00:18:21 ◼   ► way too much of it to Google as a possible

00:18:23 ◼   ► centralized role in this thing.

00:18:28 ◼   ► And then two, the name chat, right?

00:18:32 ◼   ► But it really is just like a next generation SMS.

00:18:35 ◼   ► But the thing that I think I would like to whatever, adjust my statement on, is on quote

00:18:46 ◼   ► unquote encryption versus end to end encryption.

00:18:49 ◼   ► End to end encryption is the only encryption that would matter in a messaging service.

00:18:53 ◼   ► And if it's not end to end encrypted, it might as well not be encrypted at all.

00:18:57 ◼   ► Like some kind of encryption that only takes the first hop from the device to some, you

00:19:01 ◼   ► you know, wherever it goes before it gets to the destination but isn't encrypted after

00:19:04 ◼   ► that is better than nothing but barely better than nothing.

00:19:09 ◼   ► Really all that matters is if it's end to end encrypted because otherwise you're, and

00:19:12 ◼   ► it's not just, I think Jim and I got too caught up thinking about like the protection from

00:19:17 ◼   ► like law enforcement and government snooping and stuff like that.

00:19:21 ◼   ► There's all sorts of bad actors that could get involved, including whoever it is that

00:19:25 ◼   ► runs your wifi if it's not you, if you're like in an airport or a coffee shop or even

00:19:30 ◼   ► just somebody in your family that you don't trust.

00:19:35 ◼   ► If you're the kid in the family and maybe you've got a problem with the stepfather or

00:19:39 ◼   ► something like that, if you don't have end-to-end encryption, you really can't trust your communication.

00:19:46 ◼   ► If end-to-end or bust is the point I would like to make, and I think I was kind of mushy

00:19:51 ◼   ► on that last week.

00:19:54 ◼   ► - Yeah, the other thing that I would say,

00:19:56 ◼   ► 'cause I didn't talk about it on,

00:19:58 ◼   ► I wrote about it last week,

00:19:59 ◼   ► but I didn't talk about it on next one,

00:20:00 ◼   ► so this is a chance for me to talk about it too,

00:20:02 ◼   ► is the point that I was trying to make

00:20:04 ◼   ► when I was writing about this is,

00:20:06 ◼   ► I think folks were a little hard on Google

00:20:10 ◼   ► in that there's a theoretical world

00:20:13 ◼   ► and there's the real world that we actually live in.

00:20:16 ◼   ► And what I mean by that is,

00:20:17 ◼   ► all these current end-to-end encrypted chat services,

00:20:22 ◼   ► they're all centralized.

00:20:23 ◼   ► And that centralization is critical to how they work

00:20:26 ◼   ► because it's a centralized player

00:20:27 ◼   ► that handles the key exchange.

00:20:29 ◼   ► And we won't give you the vagaries

00:20:30 ◼   ► of how encryption works,

00:20:32 ◼   ► but basically the person sending you a message

00:20:34 ◼   ► has to have your key.

00:20:36 ◼   ► And in this aspect, the RCP is sort of like

00:20:38 ◼   ► communication before the communication,

00:20:40 ◼   ► and it can't be initiated by the sender,

00:20:42 ◼   ► it has to be initiated by the recipient.

00:20:43 ◼   ► It's very weird, right?

00:20:44 ◼   ► I have to give you the means to contact me

00:20:48 ◼   ► for you to contact me,

00:20:49 ◼   ► but how do I know that you want to contact me?

00:20:51 ◼   ► Like, what Apple does, for example, or WhatsApp,

00:20:55 ◼   ► or whatever it might be, or Signal, they all work this way,

00:20:57 ◼   ► is they have a centralized server where

00:21:00 ◼   ► that key is associated with a username or an ID,

00:21:03 ◼   ► like your Apple ID or a phone number.

00:21:05 ◼   ► And that centralization is how it works.

00:21:07 ◼   ► And that's how, you know, LL worked,

00:21:09 ◼   ► like Google's previous sort of chat offering.

00:21:11 ◼   ► And the issue is that that is ideal.

00:21:15 ◼   ► But if the carriers and OEMs are never, ever going

00:21:18 ◼   ► to make all of the default messaging servers

00:21:20 ◼   ► or whatever else Google puts out there, then the only alternative-

00:21:22 ◼   ► There's no way they're gonna agree on a centralized provider, right?

00:21:26 ◼   ► Exactly, exactly.

00:21:27 ◼   ► And yeah, and people are like, "Oh, well, what about HTTPS?"

00:21:30 ◼   ► Well, HTTPS depends on centralized certificate authority.

00:21:33 ◼   ► Like, there has to be a central player.

00:21:36 ◼   ► That's the only way it's gonna work.

00:21:37 ◼   ► And also HTTPS, you know, HTTPS is really only possible because Netscape introduced

00:21:44 ◼   ► it in 1994, whenever it was.

00:21:46 ◼   ► It had to be there at the beginning and sort of built in.

00:21:49 ◼   ► The question is how are you gonna build something

00:21:51 ◼   ► into the system as it is?

00:21:53 ◼   ► And my point is that it's not theoretically possible

00:21:55 ◼   ► to have a decentralized encryption sort of method,

00:21:58 ◼   ► 'cause HTTPS shows you could.

00:22:00 ◼   ► It's that realistically, for all practical purposes,

00:22:03 ◼   ► it's never ever going to happen,

00:22:04 ◼   ► which meant Google was in a very sort of difficult position

00:22:07 ◼   ► because their choice was, the choice is not

00:22:11 ◼   ► an end-to-end encryption or not an end-to-end encryption.

00:22:14 ◼   ► It's stick with SMS as crappy as it is

00:22:18 ◼   ► or make it better, but just like SMS,

00:22:21 ◼   ► it's gonna be unencrypted.

00:22:22 ◼   ► And you could say that maybe they should stick with SMS,

00:22:25 ◼   ► and that way customers will,

00:22:27 ◼   ► themselves, voluntarily go out and use something

00:22:30 ◼   ► like WhatsApp, and that's better for customers.

00:22:31 ◼   ► But I think you could be a little sympathetic

00:22:33 ◼   ► to Google's position, why they would prefer

00:22:36 ◼   ► to not have that outcome either.

00:22:38 ◼   ► - Yeah.

00:22:39 ◼   ► The second point of follow-up from this,

00:22:40 ◼   ► same discussion with the same show

00:22:42 ◼   ► is Jim and I, at my prodding, were speculating

00:22:45 ◼   ► on how many active iMessage users there are.

00:22:49 ◼   ► 'Cause Apple doesn't talk about that,

00:22:53 ◼   ► and they haven't really talked about iMessage numbers,

00:22:56 ◼   ► period, in a couple of years.

00:22:58 ◼   ► The most recent was actually Eddy Cue on this show,

00:23:02 ◼   ► like two years ago, I think,

00:23:04 ◼   ► and he said that they were doing a peak

00:23:06 ◼   ► of 200,000 messages a second,

00:23:08 ◼   ► but I think that was from like March 2016.

00:23:11 ◼   ► So who knows where that number's at now,

00:23:14 ◼   ► I haven't said anything recently, but I think the problem Jim and I made is

00:23:18 ◼   ► We're ball parking well how many active users of like iPhones are there and

00:23:25 ◼   ► You know maybe let's guess that half of them are using iMessage or something

00:23:31 ◼   ► I think Jim was a little bit more bullish than than me

00:23:35 ◼   ► But I think the thing that both of us sort of overlooked on the fly and and our American Central

00:23:41 ◼   ► centrism

00:23:43 ◼   ► Is to blame is that we I knew this, but I really didn't think of it on the spot is just how

00:23:50 ◼   ► Different messaging is used country by country around the world and you know this you know we've you've you're the one who opened my eyes

00:23:58 ◼   ► to it

00:24:00 ◼   ► But it's I think the best word to phrase it is balkanized. You know it's here in the US SMS is

00:24:06 ◼   ► hugely popular

00:24:11 ◼   ► But amongst iPhone to iPhone users, iMessage is. iPhone to iPhone, you know, communication is, in my experience, largely iMessage.

00:24:20 ◼   ► But there are places in countries in Europe, a lot of countries in Europe,

00:24:26 ◼   ► maybe most countries in Europe, that are dominated by WhatsApp. And I was talking to people on Twitter about it this week, and

00:24:32 ◼   ► and my question is, well, is in this mixed group of people you're talking about, are there a lot of Android users? And the answer

00:24:38 ◼   ► Yes, there's a lot of Android users. So therefore iMessage really can't be the thing, you know

00:24:43 ◼   ► It wouldn't work like it does for me where almost everybody I chat with is on iMessage

00:24:48 ◼   ► So it's like by being on iMessage and ruling out Android people

00:24:52 ◼   ► I don't know. I can't remember the last SMS I got that wasn't from like

00:24:58 ◼   ► Some kind of automated service that still uses SMS for you know confirmation codes or something like that

00:25:05 ◼   ► but for actual personal communication, I

00:25:08 ◼   ► Honestly think I really do I think it's been months since I've gotten an SMS

00:25:12 ◼   ► I I don't I don't know people who have Android phones

00:25:15 ◼   ► Yeah, oh, sorry well, but I'm just saying certain countries in Europe. It's whatsapp

00:25:20 ◼   ► Other places Facebook messenger, I know Facebook messenger it gets a lot of use in the u.s.. To

00:25:27 ◼   ► But not among people I know and then in you know countries like

00:25:31 ◼   ► like

00:25:34 ◼   ► In Asia, there's there's apps like line and China has we chat, right?

00:25:39 ◼   ► Yeah, no, I think you're exactly right about the balkanization and and I would say in the vast majority of countries in the world it is

00:25:48 ◼   ► Something other than SMS because the other one thing that's weird of the US because the US

00:25:53 ◼   ► Was behind in SMS, but then the carriers all bundled

00:25:57 ◼   ► most people end up getting unlimited talk in tax plans and

00:26:00 ◼   ► And that's kind of like when SMS really exploded,

00:26:03 ◼   ► because people in the US weren't paying for it.

00:26:05 ◼   ► But in most other countries in the world,

00:26:06 ◼   ► people have always paid for SMS messages.

00:26:08 ◼   ► And that's why when WhatsApp came along--

00:26:10 ◼   ► WhatsApp's biggest feature by far

00:26:12 ◼   ► was that it was basically the exact same as SMS,

00:26:16 ◼   ► but it was free.

00:26:17 ◼   ► And there is no greater feature when

00:26:19 ◼   ► it comes to acquiring customers.

00:26:20 ◼   ► And that's the challenge with all these services

00:26:23 ◼   ► is the number one feature of any of these services,

00:26:26 ◼   ► beyond being free of course, is are your friends on it.

00:26:29 ◼   ► And so once one sort of gets a hold, it's very, very difficult for something else to

00:26:33 ◼   ► come along.

00:26:34 ◼   ► So I think the line is kind of Japan, Thailand, Taiwan, WeChat is in China, South Korea is

00:26:42 ◼   ► Kakao, and basically the rest of the world is all WhatsApp.

00:26:44 ◼   ► Like WhatsApp is super, super dominant, and the one big exception is the United States.

00:26:48 ◼   ► The United States, because of that sort of weird SMS remains stronger, is very sort of

00:26:54 ◼   ► a fractured.

00:26:55 ◼   ► iMessage is obviously a big deal there.

00:26:57 ◼   ► And I think in the context of Google and this chat/RCS sort of effort, it's really, I think,

00:27:03 ◼   ► first and foremost about the North American market.

00:27:05 ◼   ► It's about having a competitive offering to iMessage, because right now the Android experience

00:27:10 ◼   ► for messaging is terrible, unless you use a third-party service.

00:27:14 ◼   ► But using a third-party service is challenging in the States in particular, because it's

00:27:18 ◼   ► not like everyone already has WhatsApp installed.

00:27:21 ◼   ► And so I think it's really about the U.S.

00:27:25 ◼   ► And so in that respect, your US-centric experience is actually really all that matters when it

00:27:32 ◼   ► comes to RCS, I think, in general.

00:27:33 ◼   ► Because the rest of the world, it's all kind of ... That battle's been fought.

00:27:37 ◼   ► It is what it is.

00:27:38 ◼   ► And the funny thing, it's funny because I don't really think about it because it seems

00:27:41 ◼   ► like such ancient history where you paid a noticeable amount for SMS.

00:27:49 ◼   ► And I'm not quite sure when it-

00:27:51 ◼   ► Well, when I came to Taiwan, I had to pay.

00:27:54 ◼   ► Even though in the US I had not paid for a long time.

00:27:56 ◼   ► So the US is unique here.

00:27:58 ◼   ► And that's one of the reasons why the US remains fractured in the messaging market, because

00:28:03 ◼   ► there's never been that impetus to get away from SMS.

00:28:07 ◼   ► There's no greater motivation to find an alternative to SMS than if you're paying for SMS and you

00:28:11 ◼   ► don't have to pay for the other one.

00:28:13 ◼   ► Whereas that's never been the case in the US.

00:28:14 ◼   ► And it really changes behavior.

00:28:16 ◼   ► If you only get 100 SMS messages from...

00:28:18 ◼   ► I mean, I used to see those stories like 10 years ago.

00:28:21 ◼   ► see stories of people who had a family plan with 500 text messages a month, and the teenager

00:28:28 ◼   ► sent like 5,000 of them, and they get a $600 phone bill or something like that. It was

00:28:36 ◼   ► a noticeable amount of money. And in hindsight, it seems crazy that you would have just a

00:28:43 ◼   ► mere hundreds of text messages to send per month. You get like six a day, and then after

00:28:51 ◼   ► You start paying and it reminds me of you know, and when I think back to the days

00:28:55 ◼   ► I just think like oh my god, it is comical and I you know

00:28:59 ◼   ► It makes me feel old is is long-distance phone calls even like when I was in college

00:29:05 ◼   ► I I spent a literal fortune me and Philly and Amy in Pittsburgh. I

00:29:11 ◼   ► Spent almost every dollar I had to my name other than like rent and ramen noodles on long-distance

00:29:19 ◼   ► Phone bells

00:29:21 ◼   ► Yeah, and so it's so for us who wanted to talk a long time on the phone it we paid a lot

00:29:27 ◼   ► And then when I was a kid, it would be like if my grandparents called it would be like, you know

00:29:32 ◼   ► John come here say hi and it'd be like hi and I'd start telling a story and they'd like yank the phone and they'd say

00:29:37 ◼   ► nope

00:29:39 ◼   ► Like I remember my dad actually like watching the clock in the kitchen like because he knew that it was built

00:29:45 ◼   ► It wasn't by the second it was by the minute

00:29:47 ◼   ► So he was damn sure to get off after you know before two minutes went by

00:29:51 ◼   ► Right one minute and 58 seconds, right?

00:29:55 ◼   ► it like totally

00:29:58 ◼   ► informed like he's over it now my dad is

00:30:00 ◼   ► 80 and you know, he's gotten past it but even up until like 10 years ago

00:30:06 ◼   ► He would still if I talked to him on the phone. He'd be talking fast

00:30:10 ◼   ► Even though we were no longer paying long-distance

00:30:15 ◼   ► Phone does he'd still you know, he just had this sixth sense of this is cost. This is gonna cost me a fortune

00:30:21 ◼   ► I'm this is gonna be one minute or less

00:30:23 ◼   ► That's funny

00:30:26 ◼   ► God, can you even imagine what you would pay to like talk to your family from Taipei to to Wisconsin if you were there like

00:30:33 ◼   ► 25 30 years ago

00:30:35 ◼   ► Yeah, I think you just didn't do it. I mean what I

00:30:42 ◼   ► I mean, I first came here 15 years ago and you would go to the 7-Eleven and get a calling

00:30:47 ◼   ► card and then you'd roll up to a pay phone and use your calling card because that was

00:30:52 ◼   ► by far the cheapest way to call back.

00:30:55 ◼   ► That came down, I think, pretty quickly when I was there.

00:30:57 ◼   ► I discovered within a couple of years that you could actually just call direct and it

00:31:00 ◼   ► would be reasonable.

00:31:01 ◼   ► But yeah, but obviously now it doesn't really cost, it's totally free.

00:31:06 ◼   ► I've told both of these stories before, but they're worth retelling.

00:31:10 ◼   ► When I was at Drexel in the early to mid '90s, we had a 7-Eleven on campus.

00:31:16 ◼   ► I'm sure it's still there.

00:31:18 ◼   ► Incredibly busy, incredibly popular.

00:31:20 ◼   ► Perfect location for a 7-Eleven on a college campus.

00:31:24 ◼   ► Two or three pay phones out front.

00:31:27 ◼   ► And somebody told me the one day, like middle of the school year, that the pay phone on

00:31:33 ◼   ► the right was giving out free long distance.

00:31:37 ◼   ► And I said, "Who told you that?"

00:31:38 ◼   ► and he said, "Someone's already told him."

00:31:39 ◼   ► And I was like, "What the hell?"

00:31:41 ◼   ► But I was going, you know, I had to walk by it anyway.

00:31:43 ◼   ► And so I picked it up and I got the dial tone

00:31:46 ◼   ► and I called Amy's number and she picked up the phone

00:31:50 ◼   ► and I was like, "Holy shit!"

00:31:53 ◼   ► I just, all I did, it just worked like a regular phone.

00:31:56 ◼   ► I just picked it up, dialed her number,

00:31:59 ◼   ► and we had like, I had nothing,

00:32:00 ◼   ► I wasn't really ready to talk to her,

00:32:02 ◼   ► but I told her, you know, "Hey, this is amazing."

00:32:06 ◼   ► And I literally, the very next day,

00:32:09 ◼   ► I swear to God, the next day, I walked by

00:32:12 ◼   ► and it was like the line to buy Pearl Jam tickets.

00:32:17 ◼   ► There must have been 30 people in line to use that phone.

00:32:23 ◼   ► And they had chairs. - That was amazing.

00:32:25 ◼   ► - They had chairs, they had mugs, thermoses of coffee.

00:32:29 ◼   ► And it was like all of the Drexel,

00:32:35 ◼   ► Like any school with its strong math and science department had tons of students from all over

00:32:40 ◼   ► Asia.

00:32:41 ◼   ► You know, it looked-

00:32:42 ◼   ► Oh, it worked internationally.

00:32:43 ◼   ► Oh yeah, yeah.

00:32:44 ◼   ► Yeah, it worked anywhere in the world.

00:32:47 ◼   ► So it was all of these, you know, like grad students from India and China and wherever

00:32:54 ◼   ► else they were from, but they were, you know, it looked like the United Nations.

00:32:57 ◼   ► It was crazy.

00:32:59 ◼   ► And then like later on that same day, I walked past again and there was nobody there.

00:33:03 ◼   ► (laughing)

00:33:05 ◼   ► - It got fixed.

00:33:05 ◼   ► - It got fixed.

00:33:06 ◼   ► (laughing)

00:33:08 ◼   ► Oh my God, it was so funny.

00:33:10 ◼   ► But like words spread.

00:33:12 ◼   ► - So why, why, why did, why did, why did,

00:33:13 ◼   ► why did it, it was preparing you for your future career

00:33:16 ◼   ► covering people winding up for the iPhone.

00:33:17 ◼   ► - Yeah, exactly.

00:33:19 ◼   ► All right, let me take a break and thank our first sponsor

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00:34:47 ◼   ► over 100 years.

00:34:48 ◼   ► Same family.

00:34:50 ◼   ► But they've only been selling their coffee in Brazil until now.

00:34:52 ◼   ► And now they're selling it around the world.

00:34:54 ◼   ► And one of the things I love about this is you don't have to pick between like 18 different

00:34:59 ◼   ► flavors of coffee or varieties of coffee or something like that. They've got one coffee.

00:35:04 ◼   ► They just have this big farm. They grow one type of bean. And what Tres Pontas does is

00:35:09 ◼   ► they have different roasts, light roast, medium roast, dark. And the very darkest is French

00:35:14 ◼   ► roast. So what you can, if you get started, you could just buy one of each. If you already

00:35:19 ◼   ► know that you like a light or a medium or French roast, whatever, just get that. And

00:35:24 ◼   ► If you can get it, either whole bean or pre-ground in 12 ounce packages.

00:35:30 ◼   ► It's really great stuff.

00:35:31 ◼   ► I was going to tell you that I'm drinking it right now, but I finished my coffee before

00:35:35 ◼   ► I got to this part of the show.

00:35:37 ◼   ► It's already gone.

00:35:41 ◼   ► It's really great.

00:35:42 ◼   ► So, where do you go to find out more?

00:35:44 ◼   ► There's two ways to get Trace Pontas.

00:35:46 ◼   ► First, you can go to their website.

00:35:47 ◼   ► Trace Pontas dot com slash coffee.

00:35:50 ◼   ► P-O-N-T-A-S dot com slash coffee.

00:35:55 ◼   ► Or you can go to Amazon and buy it there.

00:35:59 ◼   ► And when you buy it from Amazon, that's just the front end.

00:36:01 ◼   ► It's just an easier way to do the transaction.

00:36:04 ◼   ► The actual order is still fulfilled from the Tres Pontas people and the freshly roasted

00:36:08 ◼   ► - you get the same freshly roasted coffee that you would if you went right to Tres Pontas.

00:36:12 ◼   ► And they don't care which way you buy it.

00:36:14 ◼   ► Whatever's easiest for you.

00:36:15 ◼   ► Here's the deal though.

00:36:16 ◼   ► They've got a subscription if you want to.

00:36:19 ◼   ► You can sign up for a subscription and get fresh roasted beans sent to you every one,

00:36:23 ◼   ► two, or four weeks.

00:36:24 ◼   ► It's your choice.

00:36:26 ◼   ► And when you sign up for a coffee subscription, you save 10% on every bag of coffee.

00:36:31 ◼   ► But listeners of this show get an extra 10% off.

00:36:34 ◼   ► You save 20% by using the code "THETALKSHOW" at checkout when you buy a subscription.

00:36:39 ◼   ► So it means you get 20% off every bag in your subscription in perpetuity.

00:36:45 ◼   ► And hey, I'm telling you, like something like this, if you, like, you know, someone in your

00:36:49 ◼   ► life like a wife or your mom or your dad, your husband. Father's Day is coming up. Mother's

00:36:55 ◼   ► Day is coming up even sooner. Pretty good gift idea in my opinion to set, you know,

00:36:59 ◼   ► if you know they like coffee, get them one of these subscriptions, get them a year's

00:37:03 ◼   ► worth of subscription and what a great gift. Then you don't have to, you don't have to

00:37:07 ◼   ► worry about the getting a Mother's Day or Father's Day gift. Great idea if you got a

00:37:10 ◼   ► coffee lover in either of those roles coming up. So my thanks to Trace Pontas. Remember

00:37:15 ◼   ► code the talk show when you go to their website to get a subscription.

00:37:20 ◼   ► Ah, got lots to cover. It's a good thing we don't waste time. I wanted to talk about this

00:37:25 ◼   ► just briefly at least. This, there's a new book out from Ivan Seidenberg and I'm obsessed

00:37:32 ◼   ► with this. This is one of the things, this is why I love my having my own website and

00:37:37 ◼   ► I can just write about what I want to write about and I don't have to pitch somebody on

00:37:40 ◼   ► this because I imagine if I had to like pitch this as something I'm going to spend a day

00:37:44 ◼   ► day obsessing over it, they'd be like, what the fuck are you talking about, John? But

00:37:48 ◼   ► former Verizon CEO, Ivan Seidenberg has a book coming out. He was the CEO, I don't know,

00:37:54 ◼   ► until like 2011, something like that. So he was there. He was the CEO at Verizon when

00:37:59 ◼   ► the iPhone came out in 2006. And he tells this story in his book that he was at the

00:38:05 ◼   ► Allen and Company Conference. You know, you ever see that kind of site, that conference

00:38:10 ◼   ► where Jeff Bezos was pictured looking like a badass with his sunglasses and a vest on.

00:38:16 ◼   ► Forget where the hell it's held. But Tim Cook goes there now. All these industry big shots

00:38:20 ◼   ► go there. And he tells this story in the book that he was, July 2006, he was walking up

00:38:27 ◼   ► to Bob Iger and Bob Iger had some kind of phone in his hand that he didn't recognize

00:38:31 ◼   ► and then he kind of tried to put it away and he says, "Hey, what was that, Bob?" And he

00:38:36 ◼   ► ah man it's gonna change the world but I guess you know can't show it to you. And he, Seidenberg

00:38:45 ◼   ► thinks it was an iPhone because Iger, Bob Iger knew Steve Jobs. Steve Jobs is on the board at

00:38:52 ◼   ► Disney. They have the whole Disney Pixar relationship. I think that's crazy. The more I think about it,

00:38:59 ◼   ► the crazier I think it is. And I don't know if Seidenberg is being just being a fool by,

00:39:08 ◼   ► you know, that he had, I don't know, like a ESPN phone or something like that. Or if he just made

00:39:16 ◼   ► the whole story up. But there's no way in my mind, there is no fucking way that Steve Jobs is letting

00:39:21 ◼   ► anybody outside Apple have an iPhone six months before it was even announced and a full year

00:39:27 ◼   ► before it actually came out. No way.

00:39:30 ◼   ► Yeah, no. The iPhone didn't even work at the introduction. That was what made the introduction

00:39:39 ◼   ► part of what made it so amazing.

00:39:40 ◼   ► Well, you know what? So it definitely struggled to get through the demos, and the stories

00:39:45 ◼   ► I've heard-

00:39:46 ◼   ► Yeah, I'm being a bit hyperbolic.

00:39:48 ◼   ► Well, they had-

00:39:49 ◼   ► There's no way it was usable by anyone not at Apple.

00:39:52 ◼   ► Right.

00:39:53 ◼   ► But six months before it was even unveiled.

00:39:55 ◼   ► I've heard since I started obsessing on this, I've heard that it's plausible, or possible.

00:40:02 ◼   ► It's implausible, but it's possible.

00:40:06 ◼   ► That it wasn't as bad as you might think, and that the press demo units in January 2007

00:40:14 ◼   ► might have been crippled in different ways.

00:40:19 ◼   ► I didn't get to see one then, I was too far out of the loop, but Jason Snell and Andy

00:40:23 ◼   ► and out Co and Glenn Fleischman all got to see and I think like do little hands-on with

00:40:29 ◼   ► with the iPhone in January 2007 and when those guys all said was that there were certain

00:40:34 ◼   ► apps like the ones that you would think of more as like widgets quote-unquote like calculator

00:40:38 ◼   ► in the stocks and a few others were literally just screenshots like you'd tap the app and

00:40:43 ◼   ► it would show a screenshot of the calculator but you there was nothing you could do it

00:40:47 ◼   ► It was just a screenshot of the calculator UI.

00:40:52 ◼   ► I heard yesterday from somebody who would definitely know that that's not really a reflection

00:40:57 ◼   ► of what Apple themselves were using in January 2007.

00:41:03 ◼   ► Those units were set up that way because the ones that Apple was using had so much other

00:41:08 ◼   ► stuff they didn't want people to see.

00:41:11 ◼   ► It was almost like there were two kinds of iPhones in January 2007.

00:41:14 ◼   ► That makes sense.

00:41:15 ◼   ► Apple themselves were using internally, and then a special version of the OS cooked up

00:41:20 ◼   ► for the press, and probably a third version, which was the ones that were cooked up for

00:41:24 ◼   ► the on-stage demos, you know.

00:41:26 ◼   ► But it-

00:41:27 ◼   ► Yeah, and that makes sense too, because there's no way they could go from like non-functional

00:41:29 ◼   ► to shipping in five months either.

00:41:32 ◼   ► That's exactly-

00:41:33 ◼   ► That's a good point.

00:41:34 ◼   ► That's almost exactly word for word what the little birdie I talked to yesterday said.

00:41:38 ◼   ► But still, like he said, July 2006, he said it was wrong.

00:41:43 ◼   ► But the other thing too, and this just came out today, there's a guy on Twitter, I've

00:41:48 ◼   ► only got his handle here, Johnapple235, let me see if he's got his real name on Twitter.

00:41:54 ◼   ► Nope.

00:41:55 ◼   ► Sounds like his real name.

00:41:56 ◼   ► I don't think it's his real name, but Johnapple noted, I'll put this in the show notes, that

00:42:03 ◼   ► it's Scott Forstall's excellent interview at the Computer History Museum last year with

00:42:08 ◼   ► John Markoff, formerly of the New York Times, and he told some great stories about the development

00:42:13 ◼   ► the iPhone, but he said like in the early days for a long stretch, there were only two

00:42:17 ◼   ► people in the world who had iPhones to carry around and uses their daily driver phone,

00:42:25 ◼   ► Steve jobs and Scott forestall. I'll put a link in the show notes to that part of the

00:42:29 ◼   ► video, but he tells this funny story where he said like, he'd have his iPhone and you

00:42:35 ◼   ► know, it'd be getting ready to go to bed and get like a fry or Saturday night, you know,

00:42:39 ◼   ► get a phone call at 11 and he'd be like, "Scott, it's Steve."

00:42:42 ◼   ► And he'd say, "I'm at this party, I'm bored."

00:42:44 ◼   ► So I went in the bathroom and he goes,

00:42:46 ◼   ► "I've been looking at the calendar

00:42:47 ◼   ► "and I'm thinking about where we're putting these labels."

00:42:50 ◼   ► And for Stahl, I don't wanna go too far into it.

00:42:53 ◼   ► He tells me better than I could, but he's like,

00:42:55 ◼   ► "So I opened my calendar app and I start looking."

00:42:57 ◼   ► And I'm like, "Okay."

00:42:58 ◼   ► And he's like, "Yeah, and this icon,

00:42:58 ◼   ► "I don't think the shade of blue is right.

00:43:00 ◼   ► "I think we gotta move it in this direction," or whatever.

00:43:03 ◼   ► And then he'd be like, we'd talk for like half an hour

00:43:06 ◼   ► and he'd be like, "Aw, damn, somebody's knocking

00:43:09 ◼   ► on the door, they probably think I'm constipating. I gotta go.

00:43:15 ◼   ► It's not just ... Another data point here too is there was a Wall Street Journal story

00:43:22 ◼   ► in February 2007, a month after the announcement about how Apple showed the phone to Singular

00:43:28 ◼   ► Wireless, which was AT&T was then called Singular Wireless. The CEOs of Singular Wireless did

00:43:37 ◼   ► not see the iPhone until a month before.

00:43:40 ◼   ► So they had been negotiating the deal and they'd been working together for two years.

00:43:45 ◼   ► So like, Singular knew it was coming, but they were not allowed to even see the finished

00:43:50 ◼   ► device until December, and Apple was announcing it in January.

00:43:54 ◼   ► So if Apple's not showing their cell phone partner the phone, what are the chances they're

00:43:58 ◼   ► showing Bob Iger?

00:43:59 ◼   ► It seems quite low.

00:44:02 ◼   ► And even if it's, you know, like, why would you show Bob Iger and why would you trust

00:44:06 ◼   ► him to keep it secret when even in the anecdote that claims that this is what happened, he

00:44:10 ◼   ► was using it at this conference where he was in eyesight of the Verizon CEO.

00:44:17 ◼   ► If the story is true, the story itself would explain why Jobs would have been an idiot

00:44:23 ◼   ► to let Bob Iger have one.

00:44:25 ◼   ► Well, not just that, but Apple, if there actually ever were negotiations with Apple and Verizon,

00:44:30 ◼   ► it would have happened before that point because the decision about what wireless radio to

00:44:34 ◼   ► use would have had to have been made long before then.

00:44:38 ◼   ► Especially given that Apple ... It already takes two years to build an iPhone today.

00:44:42 ◼   ► When Apple's building the first one and they have to actually learn how to do cellular

00:44:45 ◼   ► transmission for the first time, it sure as hell took longer than two years to figure

00:44:50 ◼   ► that out.

00:44:51 ◼   ► So if there were ever any sort of negotiation with Verizon, it would have had to have happened

00:44:55 ◼   ► before July 2006.

00:44:57 ◼   ► Yeah, it's just a weird story and I find it very, very hard to believe.

00:45:01 ◼   ► And I think it's bullshit.

00:45:04 ◼   ► he's lying about it or whether he's just being an idiot and that it was like a sidekick,

00:45:08 ◼   ► you know, or some one of those phones or something like that, who knows?

00:45:12 ◼   ► But I really, I would bet heavily that it was not an iPhone.

00:45:15 ◼   ► And I'm going to take Scott Forstall's word that there were only two people, because the

00:45:22 ◼   ► two people who he says had it are the two people who I would believe.

00:45:26 ◼   ► Yeah, that also sounds like a very Forstall sort of story to stay, to emphasize that it

00:45:31 ◼   ► was him and Steve Jobs that had it.

00:45:33 ◼   ► - That's a very in-character anecdote for Scott Forsstahl.

00:45:37 ◼   ► - Right.

00:45:38 ◼   ► I don't have anything more to add about that, though.

00:45:44 ◼   ► All right, next topic I've got here is

00:45:46 ◼   ► airport base stations are now end of life.

00:45:49 ◼   ► I actually knew about this last week,

00:45:53 ◼   ► the day that Jim and I recorded,

00:45:55 ◼   ► but it wasn't out yet,

00:45:57 ◼   ► so we just didn't talk about it.

00:46:02 ◼   ► And it's funny because I think if I had talked about it last week, I would have had a slightly

00:46:07 ◼   ► different take than I do now that I've had a week to think about it.

00:46:10 ◼   ► Interesting.

00:46:11 ◼   ► Give us both.

00:46:12 ◼   ► What was the original?

00:46:14 ◼   ► Well, the original take I think is almost best summarized by a ... There's a tweet by

00:46:22 ◼   ► Dr. Drang.

00:46:23 ◼   ► Do you follow Dr. Drang on Twitter?

00:46:25 ◼   ► He's like a- Oh, of course.

00:46:26 ◼   ► One of my favorites.

00:46:27 ◼   ► Yeah, and boy, that guy's fantastic.

00:46:28 ◼   ► So here's his tweet.

00:46:29 ◼   ► I'll put it in the show notes.

00:46:30 ◼   ► The airport is like the Laser Rider, something Apple had to make to push computing in a certain

00:46:35 ◼   ► direction.

00:46:36 ◼   ► Both products hung around well after that push was no longer necessary.

00:46:39 ◼   ► And I would say, saying that, and if you don't remember the Laser Rider, and when Apple was

00:46:45 ◼   ► in the printer business and how revolutionary the Laser Rider was, it was remarkable.

00:46:50 ◼   ► It really was.

00:46:51 ◼   ► In 1985, Apple introduced the Laser Rider and fundamentally altered the nature of printed

00:46:58 ◼   ► business communications. In 1986, the Laser Rider Plus was introduced, bringing even greater

00:47:05 ◼   ► flexibility to the printed page. With the Laser Rider and the Laser Rider Plus, Apple

00:47:13 ◼   ► has today become the leader in the desktop laser printer market. However, new opportunities

00:47:20 ◼   ► are developing in the areas of higher throughput, lower cost, and greater flexibility. As application

00:47:28 ◼   ► areas grow, so does the demand for more sophisticated laser writers.

00:47:35 ◼   ► To meet this need, Apple has created the LaserWriter II family of printers, the second generation

00:47:43 ◼   ► of laser writers. The LaserWriter II NTX, a high performance, expandable, network laser

00:47:52 ◼   ► printer. The LaserWriter II NT, the mainstream network laser printer. And the LaserWriter II SC,

00:48:03 ◼   ► an entry-level single-user laser printer. NTX, for networkable and expandable. NT, for networkable.

00:48:14 ◼   ► SC, for SCSI interface. It was like the first thing was that most printers back then were like

00:48:21 ◼   ► dot matrix printers and they were loud and noisy and so low resolution is to be

00:48:26 ◼   ► almost laughable. I mean you actually get better resolution output out of like a

00:48:30 ◼   ► cash register with the heat transfer and you could you know like yeah you can

00:48:36 ◼   ► still see the pixels on those things even today. It was like you could see

00:48:39 ◼   ► that not only could you see the pixels they weren't really even aligned right

00:48:42 ◼   ► and then you all of a sudden you have this $300, 300 DPI laser printer where

00:48:48 ◼   ► Every is always a lot more than $300 not 300 DPI I said

00:48:52 ◼   ► And also, you know setting up the idea of an of a printer on a network

00:48:59 ◼   ► And if you were gonna spend as much as a laser writer cost in the mid 80s

00:49:03 ◼   ► So just drop it in it launched in 1985. It was

00:49:07 ◼   ► $6,995 which is the equivalent of

00:49:11 ◼   ► $15,916 today so

00:49:13 ◼   ► It was the price of a small car, basically.

00:49:16 ◼   ► Right.

00:49:17 ◼   ► So, yeah, imagine spending $15,000 on a printer today, but in certain environments, like some

00:49:25 ◼   ► kind of shared computer lab at a college or an office, or especially if you worked in

00:49:35 ◼   ► the graphic design industry, it was worth it.

00:49:38 ◼   ► It was almost a no-brainer, but you'd need to...

00:49:41 ◼   ► You wouldn't want to have it hooked up to one computer.

00:49:43 ◼   ► Like imagine if Ben was the guy who had the laser writer.

00:49:47 ◼   ► Hey, Ben, I need you to print something for me.

00:49:50 ◼   ► Hey, Ben, print this again.

00:49:53 ◼   ► Ah, shit, I had a typo, Ben.

00:49:54 ◼   ► Give me another copy.

00:49:56 ◼   ► It had to be networked.

00:49:58 ◼   ► And setting up a network printer in 1985 or 1986

00:50:02 ◼   ► was like, forget about it.

00:50:04 ◼   ► And then Apple came up with local talk

00:50:07 ◼   ► and it's relatively inexpensive.

00:50:09 ◼   ► and normal, you didn't need any kind of IT pros

00:50:12 ◼   ► or computer experts.

00:50:14 ◼   ► It was everything that the Macintosh exemplified.

00:50:18 ◼   ► You'd buy these things, you'd hook them up

00:50:19 ◼   ► into the serial port on the back of your Macs,

00:50:23 ◼   ► and you'd go to the chooser,

00:50:25 ◼   ► and there as an output was the laser writer.

00:50:29 ◼   ► And you'd click on the icon,

00:50:30 ◼   ► and then every time you hit Command + P in any app,

00:50:34 ◼   ► it would show up as the output.

00:50:36 ◼   ► and you'd hit the print button,

00:50:39 ◼   ► and you would get this unbelievable 300 DPI output.

00:50:43 ◼   ► - And this was mind blowing.

00:50:47 ◼   ► It's hard to convey how utterly mind blowing

00:50:50 ◼   ► this was at the time.

00:50:51 ◼   ► And I'm projecting 'cause I was five years old,

00:50:53 ◼   ► but by all accounts, I should say it was mind blowing.

00:50:56 ◼   ► - Well, I didn't see,

00:50:57 ◼   ► I don't know when I first saw a laser writer.

00:50:59 ◼   ► It certainly wasn't 1985.

00:51:01 ◼   ► I don't remember.

00:51:05 ◼   ► I might've--

00:51:05 ◼   ► It's interesting though because it was an integral piece.

00:51:08 ◼   ► I think the ATP guys talk about the various heydays of Apple.

00:51:11 ◼   ► And one of the ones that naturally--

00:51:14 ◼   ► Syracuse would pick four instead of picking one.

00:51:16 ◼   ► But one of the ones he picked out

00:51:17 ◼   ► was the birth of desktop publishing

00:51:21 ◼   ► and when that became a real thing.

00:51:23 ◼   ► And The Wager Rider was a critical piece of that.

00:51:25 ◼   ► It was a really great example of Apple giving birth

00:51:29 ◼   ► to an industry by virtue of creating

00:51:31 ◼   ► a critical piece of hardware that

00:51:33 ◼   ► made that industry possible.

00:51:35 ◼   ► And the GUI and the Mac was a big part of it.

00:51:37 ◼   ► But the fact you could instantly print it out and see

00:51:40 ◼   ► what it looks like and make sure everything was right

00:51:42 ◼   ► was a major part of it as well.

00:51:44 ◼   ► And Apple had to make it themselves.

00:51:45 ◼   ► Yeah.

00:51:46 ◼   ► And it was-- even into the '90s, even into my time

00:51:50 ◼   ► at the Drexel's student newspaper,

00:51:55 ◼   ► my beloved Triangle, we would put the output together

00:52:01 ◼   ► for the entire-- it was like a tabloid-sized newspaper.

00:52:04 ◼   ► And every page was put together from our laser writer output.

00:52:09 ◼   ► Actually, we had an HP by that time, by the '90s.

00:52:12 ◼   ► But we'd laser print the pages, put them together,

00:52:15 ◼   ► and then we'd have them on-- I forget what we--

00:52:17 ◼   ► I forget the hell we called it.

00:52:19 ◼   ► I can't believe I've forgotten.

00:52:19 ◼   ► But it was like this sticky stuff

00:52:21 ◼   ► that we'd put them on cardboard.

00:52:23 ◼   ► So it would be-- we printed on nice paper, just

00:52:27 ◼   ► regular paper, though.

00:52:28 ◼   ► And then we had this like spray stuff.

00:52:30 ◼   ► You had to do it in a special room because it was such a mess.

00:52:33 ◼   ► But it was like, we had this room that was sort of like,

00:52:36 ◼   ► instead of feeling like it was like a newspaper office,

00:52:38 ◼   ► it was like a art room, because it had that smell

00:52:40 ◼   ► of like, aerosol, sticky stuff.

00:52:43 ◼   ► And you'd be very careful and nicely, neatly press it.

00:52:47 ◼   ► And then, you know, the last thing we'd do

00:52:49 ◼   ► before we'd close for the week is, you know,

00:52:51 ◼   ► like the editor-in-chief and the managing editor

00:52:53 ◼   ► would sit there and read every page

00:52:55 ◼   ► from corner to corner again, you know,

00:52:56 ◼   ► make sure everything's right.

00:52:58 ◼   ► And then a guy from the printer

00:52:59 ◼   ► would come and pick up those boards.

00:53:01 ◼   ► Like, so that's our delivery.

00:53:02 ◼   ► Our delivery wasn't like a disk.

00:53:04 ◼   ► It wasn't like a zip disk or a PDF or anything like that.

00:53:09 ◼   ► It was laser printed output.

00:53:12 ◼   ► And then they would just take it and it was photo ready.

00:53:14 ◼   ► They'd, you know, I don't know what the hell they did, but you know, a couple hours later

00:53:17 ◼   ► we'd have thousands of copies of an actual newspaper.

00:53:21 ◼   ► But the fact that we are cell, I remember asking, I remember at one point like asking

00:53:26 ◼   ► like, "What the hell did they do before this?"

00:53:28 ◼   ► And then like, you know, I kind of found out and I was like, "I don't think I would have

00:53:31 ◼   ► have been in the newspaper before the laser rider.

00:53:34 ◼   ► That was too much work.

00:53:35 ◼   ► It was ridiculous.

00:53:36 ◼   ► Yeah, I did the student paper thing, too.

00:53:41 ◼   ► And we still had that room where that was done.

00:53:45 ◼   ► But it had since been retired.

00:53:48 ◼   ► At that point, we were laying out in Quark.

00:53:50 ◼   ► Well, we used Quark, but the output was paper.

00:53:52 ◼   ► We printed the pages.

00:53:53 ◼   ► No, but we would put it out to PDF,

00:53:56 ◼   ► and then we could submit it over the internet to the printer.

00:54:00 ◼   ► But it was still fresh enough to that era

00:54:04 ◼   ► where that room was still there,

00:54:05 ◼   ► and the markup table, or cut-up table,

00:54:07 ◼   ► or whatever it was called, was still in there.

00:54:09 ◼   ► But we were no longer using it.

00:54:12 ◼   ► I know what you're talking about,

00:54:14 ◼   ► but I never actually cut up a paper.

00:54:16 ◼   ► - Most of the ads we got, we got as paper.

00:54:19 ◼   ► We'd get ads, and they were paper,

00:54:21 ◼   ► and we would scan them.

00:54:25 ◼   ► It wasn't like we would cut them out

00:54:27 ◼   ► and paste them on the thing.

00:54:28 ◼   ► We'd scan them at high resolution,

00:54:30 ◼   ► so we could have the whole, everything was in Quark.

00:54:33 ◼   ► But still, that's how people delivered stuff to us

00:54:36 ◼   ► because it was a wild, I mean, PDF,

00:54:39 ◼   ► sort of like in the time when PDF was starting to take off.

00:54:41 ◼   ► But there just was no reliable interchange.

00:54:44 ◼   ► And you'd send somebody an EPS file,

00:54:46 ◼   ► and God help them if they didn't have the right font.

00:54:49 ◼   ► It was just too hard.

00:54:50 ◼   ► - Oh yeah, we were still very much

00:54:53 ◼   ► in the font headache phase, for sure.

00:54:56 ◼   ► - Oh my God, it's like, what version of Futura do you have?

00:54:59 ◼   ► Futura STD. Oh, STD? Nobody's using that anymore.

00:55:04 ◼   ► Oh, that one spread like crazy.

00:55:08 ◼   ► I thought I was trying to think of a joke. I did. There was a version of Futura called Futura that was Futura STD.

00:55:17 ◼   ► But anyway, that was my take on AirPort a week ago where it's like, "Well, I kind of miss it."

00:55:23 ◼   ► And in a way that I still kind of wish Apple made printers really just because I think they'd be better than the ones that you

00:55:29 ◼   ► You know, it's I think they would still be the best

00:55:31 ◼   ► But I get it and you know, like I don't eat my house has been wired up with heroes

00:55:38 ◼   ► You know for at least two years now

00:55:40 ◼   ► And our heart wasn't in it and you know

00:55:44 ◼   ► You know

00:55:46 ◼   ► Gurman reported back in November 2016 that they were no longer developing them.

00:55:50 ◼   ► And so it's from then until now when they officially pulled the plug.

00:55:53 ◼   ► But now that I think about it after a week and talking to seeing a couple of other people's things,

00:55:58 ◼   ► I think I agree with the drag take insofar as why Apple created airport in the first place.

00:56:05 ◼   ► Because in 1999 or 98, whenever that was, remember when Schiller jumped off the, in the demo?

00:56:12 ◼   ► There was like a on stage demo where Phil Schiller jumped off like a 10-foot. All right, so you'd be yes, you'd be disconnected

00:56:19 ◼   ► Yes, it was this tip. Yeah and to prove that it wasn't that it wasn't connected anything

00:56:23 ◼   ► Oh, yeah

00:56:23 ◼   ► I remember I remember having to decide whether you want to add an airport card or not to to write your laptop, right?

00:56:29 ◼   ► You had to add a card but Apple made something that would you know, I've they foresaw that wireless, you know Ethernet

00:56:36 ◼   ► You know Ethernet speeds over wireless, you know is that's the future, you know

00:56:41 ◼   ► They're still pushing towards wireless technologies today, but they saw that wireless networking

00:56:50 ◼   ► was the way of the future.

00:56:51 ◼   ► Networking's always been hard to set up, and so if they did it all themselves, they could

00:56:55 ◼   ► make it easy, and they could make their own nice app for managing the base station, et

00:57:01 ◼   ► cetera, and so forth, and that's not necessary anymore.

00:57:04 ◼   ► But I think the difference with laser printers and the airport today is, okay, there's other

00:57:09 ◼   ► ways to easily set up a network today and you know like Eros and other brands

00:57:14 ◼   ► you don't have to go through. Frankly for most people it's it's the one that

00:57:18 ◼   ► their cable provider gives them. Yeah well. Which are still crap but they're

00:57:22 ◼   ► less crappy than they used to be and you know if you don't think too

00:57:26 ◼   ► much about it it seems like it's it's sufficient. Well but I think the

00:57:31 ◼   ► main reason Apple I wish Apple were still doing it is security and privacy

00:57:36 ◼   ► That I still, I trust Apple more, and I certainly trust them more than the shit boxes you get

00:57:41 ◼   ► from cable companies.

00:57:48 ◼   ► If you look, there's tons of, if you just start searching for security problems with

00:57:54 ◼   ► like consumer grade wifi routers, they're all over the place.

00:57:59 ◼   ► It's really, really common.

00:58:03 ◼   ► And I just think that with the renewed focus, or not renewed, but just the way that the

00:58:10 ◼   ► whole industry has gotten focused on security and privacy and encryption, et cetera, over

00:58:16 ◼   ► the last 10 years, I feel like, you know, not that I, you know, that it would take a

00:58:23 ◼   ► renewed, what I'm talking about would take Apple to actually be interested and actively,

00:58:28 ◼   ► you know, making airport radically new

00:58:33 ◼   ► and better than ever before.

00:58:34 ◼   ► But I think they had a role to play there

00:58:38 ◼   ► and they sort of abdicated it.

00:58:39 ◼   ► - Maybe, I mean, but I mean, honestly,

00:58:43 ◼   ► what is your, if your ISP is problematic

00:58:48 ◼   ► and tamping with your communications,

00:58:50 ◼   ► that like they can do that just as easily,

00:58:53 ◼   ► you know, internally as opposed to using your modem.

00:58:56 ◼   ► I mean, I'm not sure, or your router, I should say, I'm not sure how much of a difference

00:58:59 ◼   ► that would make, and I guess I don't find that super compelling.

00:59:02 ◼   ► What I do find compelling, and was, did you see that piece by M.G.

00:59:06 ◼   ► Siegler?

00:59:07 ◼   ► I think he called it "Airports" or something like that.

00:59:10 ◼   ► But his argument is that Apple should have moved to integrate sort of the router and

00:59:17 ◼   ► air capability with the Apple TV and with sort of the HomePod or with a Siri sort of

00:59:23 ◼   ► center in the house.

00:59:25 ◼   ► And I think that's where this is much more compelling, and I think is a very strong argument

00:59:31 ◼   ► to make.

00:59:32 ◼   ► I mean, you can understand why Apple wanted to get out of it, not just because solutions

00:59:36 ◼   ► were good enough, but it actually does make it slightly more challenging to set it up

00:59:40 ◼   ► initially because when the technician comes in and installs your internet, they have the

00:59:45 ◼   ► expectation because 95% of their customers just use whatever they give them, that they

00:59:48 ◼   ► set it up and it's good to go.

00:59:50 ◼   ► And if you want to add on a router, often you have to do like PPPoE or you have to do

00:59:53 ◼   ► some sort of like configuration or if you set it up as a bridge mode. There are challenges.

00:59:58 ◼   ► I think Apple might have been getting more. I bet part of the calculation was the amount of

01:00:03 ◼   ► customer support they were having to do with people just trying to get these things set up

01:00:06 ◼   ► with sort of like a Wi-Fi network that was already being set up for them. And that probably went into

01:00:12 ◼   ► it. But the payoff of overcoming that complexity is you have a very sort of privileged position.

01:00:19 ◼   ► It's like the laser writer being compelling because of that networking built in, right?

01:00:23 ◼   ► Because HP actually came out with a laser printer first, but it didn't have networking.

01:00:27 ◼   ► And the networking is what made the laser writer so incredible, as you just kind of

01:00:33 ◼   ► just explained.

01:00:34 ◼   ► And to have the same sort of thing when it comes to home automation, when it comes to

01:00:39 ◼   ► TV, when it comes to music and streaming and all that sort of stuff, I think would be a

01:00:45 ◼   ► very compelling place to be going forward.

01:00:48 ◼   ► And so my take, I think, would be much more along the one that MG had, where they just

01:00:52 ◼   ► kind of just kind of gave up on on on a great place to be and accepted being

01:00:57 ◼   ► just another device in the network instead of sort of the device yeah and I

01:01:02 ◼   ► completely agree I'm glad you brought I just added are you added mg's thing to

01:01:07 ◼   ► the show notes so it'll be there I completely agree and you know a good

01:01:10 ◼   ► example of that where they started going down that path was with a time capsule

01:01:14 ◼   ► where it was more than just a router it was also a destination where your max

01:01:18 ◼   ► all your Macs in your house could could use for Time Machine because Time Machine is a great feature

01:01:25 ◼   ► but it needs it can't use you know for good reason it can't use your startup drive as the place where

01:01:35 ◼   ► it stores your backup information because that's what it's backing up and I don't know if you're

01:01:44 ◼   ► aware of this, an awful lot of people have Macbooks. They don't use desktop Macs. And

01:01:51 ◼   ► so it's not really all that convenient to have a USB drive plugged into the side everywhere

01:02:00 ◼   ► you go at all times so that Time Machine can run.

01:02:03 ◼   ► So having Time Machine be able to back up to a network device like Time Capsule is a

01:02:10 ◼   ► a brilliant device for most Mac users because most Mac users are on MacBooks. And even the

01:02:15 ◼   ► ones who aren't, you know, having one device that everybody in the house can back up to

01:02:21 ◼   ► is better than buying a USB drive for everybody. So that's just, you know, now what are you

01:02:28 ◼   ► supposed to do for Time Capsule if you're one of these people? And then Time Capsule's

01:02:32 ◼   ► a great feature.

01:02:33 ◼   ► Well, the other thing is, you know, the trend in general has been towards these sort of

01:02:37 ◼   ► networks. You mentioned you have a Euro. I have one of those hardcore sort of ubiquity

01:02:43 ◼   ► systems, like Marco has. But what's so interesting is if Apple had been more sort of forward

01:02:51 ◼   ► thinking about this, they could have used a mesh network and integrated that with a

01:02:57 ◼   ► Siri type device, like the Amazon Echo Dots, the small ones. And imagine if those were

01:03:03 ◼   ► were both like a part of a Wi-Fi mesh network

01:03:07 ◼   ► and also were sort of embedding Siri throughout the house.

01:03:10 ◼   ► I mean, this idea of like, there was a real opportunity

01:03:13 ◼   ► for sort of integrating all these sorts

01:03:15 ◼   ► of different services, which is sort of

01:03:16 ◼   ► Apple's bread and butter, and there was just,

01:03:19 ◼   ► I think it really was just a lack of vision.

01:03:21 ◼   ► I mean, I've written about the thing with,

01:03:23 ◼   ► you know, about the HomePod in Siri

01:03:24 ◼   ► or the HomePod in general.

01:03:26 ◼   ► I mean, remember the Echo came out,

01:03:29 ◼   ► I think it was in 2014, and I'm very proud of it

01:03:32 ◼   ► because it came out on the heels of the Fire Phone,

01:03:35 ◼   ► which was just truly, it's honestly the worst phone

01:03:38 ◼   ► I've ever used in my life.

01:03:39 ◼   ► It was truly horrendous.

01:03:41 ◼   ► And so they come out with this Echo device,

01:03:43 ◼   ► and everyone's like, "Oh, Amazon, what are they doing?

01:03:47 ◼   ► "They're terrible, horrible, blah blah blah."

01:03:48 ◼   ► What people didn't realize is the Echo

01:03:49 ◼   ► was not a hardware device.

01:03:50 ◼   ► It was a conduit to an online service,

01:03:53 ◼   ► which Amazon is much better at than they are,

01:03:56 ◼   ► sort of like a product that you hold in your hand.

01:03:58 ◼   ► But, and I was very, 'cause I was the only person I knew

01:04:01 ◼   ► first day, I was like, "I think this is pretty compelling. It's going to be a big thing."

01:04:04 ◼   ► And I think the problem for Apple and Google both was they were so dominant in smartphones

01:04:10 ◼   ► that they couldn't imagine a world where the smartphone wasn't the most sort of important,

01:04:15 ◼   ► dominant device because why wouldn't it be? It's amazing. It's awesome. It's always with you.

01:04:19 ◼   ► And it turns out, I've probably seen this in your show before because I've made this point

01:04:22 ◼   ► previously, but the one place where you're most likely to not have your phone happens to be when

01:04:28 ◼   ► when you're at home because you're charging it, right?

01:04:31 ◼   ► And, but Apple and Google, I think,

01:04:33 ◼   ► were just so blind to it that Amazon got this

01:04:36 ◼   ► multi-year head start building this stuff out.

01:04:39 ◼   ► And if you think about the timing,

01:04:40 ◼   ► Apple stopped development in two,

01:04:41 ◼   ► like when the current, the last version of the airport

01:04:45 ◼   ► came out, it had to have been around 2014 or so,

01:04:47 ◼   ► sometime around that, I'm just guessing.

01:04:50 ◼   ► But, you know, if they had sort of not had this blind spot,

01:04:53 ◼   ► you know, you could imagine a world where they have

01:04:55 ◼   ► all these eero-like devices distributed through your house

01:04:57 ◼   ► have Siri all enabled, and it's just sort of embedded in your house, and then it's combined

01:05:03 ◼   ► with Apple TV and has this whole sort of like ... Where the iPhone, you're less dependent on

01:05:10 ◼   ► this device in your pocket, and you're more sort of living in this sort of Apple-controlled universe.

01:05:15 ◼   ► But they didn't. They had that blind spot, and now they're basically, in many respects,

01:05:21 ◼   ► when it comes to the home, back where they started. Yeah. And think about how long ago

01:05:25 ◼   ► that was. They had original, you know, they started shipping machines for the Wi-Fi in

01:05:31 ◼   ► 1999. So, you know, we're talking like 18 years. I think that's when their first airport

01:05:35 ◼   ► came out, right?

01:05:37 ◼   ► - I am looking it up right now.

01:05:39 ◼   ► - It's close. It's gotta be close to around 18 years. Like, that's 18 years.

01:05:43 ◼   ► - Yeah, they watched it in 1999, and then the last version came out in, well, 2011.

01:05:50 ◼   ► Sheesh.

01:05:51 ◼   ► - It is, I think ultimately it's just,

01:05:53 ◼   ► that's a, and it is sort of what I'm thinking.

01:05:56 ◼   ► It's not just security and privacy,

01:05:57 ◼   ► but it's just all of, there's just a lost opportunity,

01:06:01 ◼   ► you know, to have 18 years of it,

01:06:04 ◼   ► and that it really only got better in that 18 years

01:06:07 ◼   ► by adopting, you know, ever faster Wi-Fi standards,

01:06:11 ◼   ► and time capsule.

01:06:14 ◼   ► Time capsule's the only thing they ever did

01:06:16 ◼   ► along the lines of, hey, if we've already got a device

01:06:19 ◼   ► plugged in and networked and connected to the internet by definition, right?

01:06:25 ◼   ► That that's the fundamental role that this thing plays.

01:06:29 ◼   ► And before mesh networks, they had the Airport Express, which was--

01:06:34 ◼   ► Right, which has kind of accomplished sort of the same thing.

01:06:38 ◼   ► Because their app-- if you actually want to have multiple Wi-Fi devices in a house

01:06:43 ◼   ► and you didn't know what you were doing, the only feasible way to do it

01:06:47 ◼   ► was with multiple Apple Airport Expresses.

01:06:50 ◼   ► Because at least Apple had the app

01:06:52 ◼   ► that made it somewhat approachable

01:06:54 ◼   ► for a sort of regular person to set up.

01:06:56 ◼   ► - And I guess, I shouldn't say that Time Capsule

01:06:58 ◼   ► is the only time they extended it,

01:06:59 ◼   ► 'cause the Airport Express is a good example too,

01:07:02 ◼   ► where they had audio out from it

01:07:03 ◼   ► and you could use that to connect

01:07:07 ◼   ► like a non-networked audio, like your stereo system

01:07:10 ◼   ► to make it a destination for playing music from your Mac.

01:07:14 ◼   ► - Yeah, it was awesome.

01:07:16 ◼   ► It was awesome.

01:07:17 ◼   ► I mean, speaking of Paul Kefasis,

01:07:20 ◼   ► I mean, like "Rogue Amoeba" made some amazing things

01:07:23 ◼   ► that took advantage of that in terms of audio.

01:07:26 ◼   ► But that's another, you know, so like in the early years,

01:07:30 ◼   ► they were thinking of, hey, you know,

01:07:32 ◼   ► we've got these things, what else could we do with it?

01:07:35 ◼   ► And it's like, you know,

01:07:36 ◼   ► I'm sure that the way "Airport Express" came about

01:07:39 ◼   ► was they were thinking, well, look, one base station,

01:07:41 ◼   ► there's God, there's just no way in certain houses

01:07:44 ◼   ► that we can make a signal strong enough to fill the whole house with Wi-Fi.

01:07:47 ◼   ► What could we do?

01:07:48 ◼   ► And they thought, "Well, what if we sold...

01:07:50 ◼   ► All right, we still sell a main base station, but we sell a cheaper, smaller thing that

01:07:53 ◼   ► you could put another one upstairs, and it'll set up a secondary network that the same devices

01:07:58 ◼   ► will automatically connect to."

01:08:03 ◼   ► It's not a mesh network, but still sort of solving the same problem.

01:08:06 ◼   ► And mesh networks is like years later a better idea of do it.

01:08:10 ◼   ► But if they had kept pressing forward, they should have gotten to mesh networks first.

01:08:14 ◼   ► And they could have kept thinking of more and more ideas.

01:08:19 ◼   ► Because ultimately, the difference is, in the early years, in the 2000s, they couldn't

01:08:25 ◼   ► make, you know, these devices were more like traditional consumer electronic devices.

01:08:30 ◼   ► Whereas all the stuff they've been doing in the last five, six years are making little

01:08:35 ◼   ► devices that are actually iOS computers, right?

01:08:39 ◼   ► AirPods are literally tiny little iOS computers running a system on a chip inside your ear.

01:08:50 ◼   ► Apple TV is an iOS computer.

01:08:56 ◼   ► I'm sure I'm missing a couple.

01:08:57 ◼   ► Almost everything they make now.

01:08:59 ◼   ► HomePod is an iOS computer.

01:09:03 ◼   ► What else could they do if they could make the router into a little iOS computer?

01:09:07 ◼   ► Well obviously, like you said, the Amazon Echo and Echo Dots and stuff like that show

01:09:13 ◼   ► you the direction you could go.

01:09:16 ◼   ► It just, I don't know, it just seems like a missed opportunity.

01:09:20 ◼   ► And I think you're very, very astute that they got blinded by the fact that the phone

01:09:28 ◼   ► is your everywhere computer.

01:09:31 ◼   ► I

01:09:33 ◼   ► Sorry if you heard of acne in the background I just stepped away

01:09:36 ◼   ► to stop that but I

01:09:39 ◼   ► Sorry, I missed your last like well. I just said I just said that I think you're exactly right

01:09:44 ◼   ► The last I heard was you were talking about everything was an iOS computer and you well

01:09:47 ◼   ► I was just listing some examples of it and everything you know that everything

01:09:50 ◼   ► But I think you're ultimately you know that they should have been thinking of that and if they had been on top of it

01:09:56 ◼   ► You know once they started making everything into iOS computers

01:09:59 ◼   ► Boy, something like making echoes and echo dots type devices would have been obvious

01:10:06 ◼   ► if they hadn't been like, I think, and I think you're spot on, blinded by the fact that they

01:10:09 ◼   ► saw the iPhone as the computer that you would have everywhere.

01:10:14 ◼   ► Yeah, it's a perfect example that you see in company after company after company after

01:10:20 ◼   ► company where it's impossible to not get blinded by your success.

01:10:28 ◼   ► You see this again and again, like Microsoft could not imagine a world that did not have

01:10:32 ◼   ► the PC at the center, right?

01:10:35 ◼   ► And it's the same sort of thing.

01:10:36 ◼   ► And they could have still created a world where the iPhone was the most dominant piece

01:10:42 ◼   ► in the center.

01:10:43 ◼   ► What's interesting is Steve Jobs, if you remember, his last keynote was about iCloud being the

01:10:47 ◼   ► new center of your life.

01:10:49 ◼   ► But the reality is that never actually happened.

01:10:52 ◼   ► The truth is the iPhone has become ever more the sort of, for practical purposes, the center

01:10:58 ◼   ► of your life.

01:10:59 ◼   ► And it's the center of your life in terms of the way Apple thinks about their business,

01:11:03 ◼   ► where they're going to get you to buy a morphos of iPhone.

01:11:06 ◼   ► They're going to get you to do more things on the iPhone or on morphos services.

01:11:09 ◼   ► They're going to sell you AirPods.

01:11:10 ◼   ► They're going to sell you a watch, all of which sync with the iPhone.

01:11:14 ◼   ► And, on one hand, I fault them because they got this wrong.

01:11:19 ◼   ► On the other hand, it's sort of like, well, that's the way it works.

01:11:23 ◼   ► Even Apple, as well-run as they have traditionally been, are not immune to the mistakes that

01:11:29 ◼   ► befall every single successful company.

01:11:31 ◼   ► So I think this is an example of that.

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01:12:27 ◼   ► I like the taste of these things.

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01:12:33 ◼   ► You can taste the fruit.

01:12:35 ◼   ► The ones that have spices like sea salt, I actually like, I do like the ones with salt.

01:12:39 ◼   ► I think like a, I just always like salty food.

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01:12:44 ◼   ► So whether you like sweet or savory chocolate or fruit flavors, there's an RX bar for you and they really are convenient

01:12:51 ◼   ► You just you know, it's eating a bar you open the thing up you eat it

01:12:54 ◼   ► I think I said this the last time that they sponsored the show

01:12:57 ◼   ► I I one thing I'd gone through my whole life and hadn't really known I don't think I ever ate before

01:13:01 ◼   ► And I think I got turned off because of Raiders of the Lost Ark our dates. I

01:13:06 ◼   ► Don't remember the scene and Raiders the Lost Ark or the monkey eats the date

01:13:12 ◼   ► Well, I got turned off on them.

01:13:14 ◼   ► But it turns out dates are delicious.

01:13:17 ◼   ► And that's what they use to bind these things together.

01:13:19 ◼   ► They've got nuts for texture, dates to bind them,

01:13:22 ◼   ► egg whites, real egg whites for protein.

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01:13:35 ◼   ► instead of eating the garbage food

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01:13:39 ◼   ► Some kind of energy, you know,

01:13:41 ◼   ► Like if you're going on a long bike ride or hike or something like that, it's so super

01:13:46 ◼   ► convenient.

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01:14:29 ◼   ► code talk show. And I'll just tell you this personally. I can't say I tried all 11 flavors

01:14:35 ◼   ► because there's some that I'd really thought I don't think I like that every single one

01:14:39 ◼   ► that I tried tastes about what I thought it would taste like. You know, it's, so if you

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01:14:59 ◼   ► - I'm here. I am here. I successfully took the dog to the restroom. Maybe you were reading

01:15:04 ◼   ► the ad.

01:15:05 ◼   ► - You're multitasking.

01:15:08 ◼   ► I am multitasking.

01:15:10 ◼   ► Apple's quarterly results.

01:15:11 ◼   ► I don't know if I want to spend a lot of time on this,

01:15:14 ◼   ► but we have to talk about this Samsung OLED thing.

01:15:20 ◼   ► There is a lot of pessimism about Apple's iPhone 10

01:15:22 ◼   ► results, or iPhone 10 sales.

01:15:25 ◼   ► And I think it's a couple of factors.

01:15:28 ◼   ► I think one of them is that-- I think

01:15:30 ◼   ► it's every year in this quarter.

01:15:32 ◼   ► Because the holiday quarter, the one that ends in December,

01:15:36 ◼   ► is all about the new phones.

01:15:38 ◼   ► And the new phones are so much excitement, blah, blah, blah.

01:15:40 ◼   ► And then the March quarter, January, February, March,

01:15:43 ◼   ► I think on an annual basis, there's just,

01:15:46 ◼   ► you can just set your clock to it.

01:15:48 ◼   ► Next year, starting around January, February,

01:15:51 ◼   ► there's gonna be reports that the new iPhones

01:15:53 ◼   ► from September 2019, especially the flashiest ones,

01:15:58 ◼   ► are a disappointment, sales are down.

01:16:01 ◼   ► Suppliers of certain things are saying that Apple has slashed

01:16:07 ◼   ► their estimated orders.

01:16:09 ◼   ► - No, there's a good reason for that though.

01:16:11 ◼   ► That was because two years ago, the second quarter of 2016,

01:16:15 ◼   ► is where the bottom fell out of the iPhone 6S.

01:16:18 ◼   ► And in a real meaningful way.

01:16:21 ◼   ► Not only were sales down 16% year over year,

01:16:25 ◼   ► which was the first time iPhone sales

01:16:27 ◼   ► I think had been down ever year over year,

01:16:29 ◼   ► but also it was actually far worse than it appeared

01:16:32 ◼   ► because Apple built up a huge amount of inventory

01:16:35 ◼   ► to the point they had to take down a $2 billion

01:16:37 ◼   ► write down later that year.

01:16:38 ◼   ► So like quarter two 2016 was a complete disaster for Apple,

01:16:43 ◼   ► for its suppliers, for its--

01:16:46 ◼   ► for anyone who held the stock at that time.

01:16:49 ◼   ► So I think it's only been one year or two years since then.

01:16:53 ◼   ► So I think there was more going on than just--

01:16:56 ◼   ► like there's a reason for this quarter

01:16:58 ◼   ► to be a little nerve-wracking.

01:17:01 ◼   ► Again, and the other thing was in the last quarter,

01:17:03 ◼   ► there was some inventory questions again, which gave some hints that is there going

01:17:09 ◼   ► to be a similar sort of thing to 2016.

01:17:11 ◼   ► So I think it's a little more justified than sort of just a usual Apple's Doom sort of

01:17:18 ◼   ► narrative sort of thing.

01:17:20 ◼   ► All right, fair enough.

01:17:25 ◼   ► And even I published a piece a week or so ago saying maybe there is something to this

01:17:32 ◼   ► linking to a Bloomberg report on Samsung's result where Samsung said, "Hey, we're seeing

01:17:38 ◼   ► significantly less business in our flexible OLED displays than we expected."

01:17:46 ◼   ► And that's-

01:17:47 ◼   ► Is this where I throw myself on the story?

01:17:50 ◼   ► Well, it was-

01:17:51 ◼   ► It was pro-

01:17:52 ◼   ► No, I won't do it.

01:17:54 ◼   ► I won't do it.

01:17:55 ◼   ► It was pro-do-it.

01:17:56 ◼   ► It was-

01:17:57 ◼   ► You had posted a post saying that someone was a jackass, saying that iPhone X sales

01:17:59 ◼   ► were down.

01:18:00 ◼   ► Right.

01:18:01 ◼   ► I think little worried about that phone X and then and then a few hours later that article dropped and I

01:18:06 ◼   ► Forged I'm the one that forage you that article and said yes look at here

01:18:11 ◼   ► And then you posted and then and then I woke up the day after earnings and I sent you

01:18:14 ◼   ► There's this story

01:18:17 ◼   ► I did it's not like well you sent me the link and you send me a link and then I go posted to during fireball

01:18:22 ◼   ► You but you sent me the link and you had said I don't know

01:18:24 ◼   ► I think there's something to it and I trust your opinion

01:18:25 ◼   ► I had seen this story before and I just didn't link to it

01:18:29 ◼   ► I was like, "Eh."

01:18:30 ◼   ► And you made me look at it again and I read it and I thought, "Hmm."

01:18:34 ◼   ► And my regret isn't that I linked to it.

01:18:37 ◼   ► My regret is that it's the exact language I used.

01:18:42 ◼   ► And I'm not going to go back and edit it because I think it's disingenuous.

01:18:47 ◼   ► But I'll tell you what I wish I had written.

01:18:50 ◼   ► What I wrote was, let's see here, under the headline, "Samsung Sees Slow Demand for OLEDs

01:18:58 ◼   ► used for Apple's iPhone X. Well, I regret that headline. I should have just said they

01:19:03 ◼   ► see slow demand for flexible OLEDs. Because that used for Apple's iPhone X makes it sound

01:19:10 ◼   ► like they're only used for the iPhone X and they're not, even though they're very expensive

01:19:13 ◼   ► displays and therefore aren't used for most phones. But my first sentence after quoting

01:19:18 ◼   ► from the Bloomberg article was starting to sound like iPhone X sales really are falling

01:19:25 ◼   ► short of expectations.

01:19:27 ◼   ► And I wish instead of the verb "are," I had said "might be," because that's really what

01:19:32 ◼   ► I was thinking, and I think it would have held up better a week later.

01:19:37 ◼   ► So here's the thing, though.

01:19:39 ◼   ► So here's the thing.

01:19:40 ◼   ► I mean, so one, I think it's a little more complicated, though, than Bloomberg got it

01:19:46 ◼   ► wrong and everyone else got it right.

01:19:48 ◼   ► Because I actually, the truth is actually, I think, in the middle.

01:19:52 ◼   ► Because I think what happened was Bloomberg really ran with this, like, "It's going to

01:19:57 ◼   ► be a big problem, blah, blah, blah."

01:19:59 ◼   ► And then you had all the spillover articles saying, "It's going to be terrible, it's going

01:20:02 ◼   ► to be awful, blah, blah."

01:20:03 ◼   ► And then it comes out and it's fine, it's the best selling phone every week.

01:20:06 ◼   ► And everyone's like, "Ah, you were wrong."

01:20:08 ◼   ► But that also is not totally right either.

01:20:13 ◼   ► There was a drop off.

01:20:15 ◼   ► Last year, the average selling price, it always drops after the first quarter, because the

01:20:20 ◼   ► first quarter is when all the enthusiasts buy the phone.

01:20:22 ◼   ► They always buy the best possible phone they can.

01:20:24 ◼   ► And last year, the drop off was 6%.

01:20:27 ◼   ► And that was pretty normal.

01:20:28 ◼   ► The year before it was 7%.

01:20:29 ◼   ► The year before it was 4%.

01:20:30 ◼   ► So that's kind of a, it's normal

01:20:32 ◼   ► for average selling price to go down.

01:20:34 ◼   ► This last quarter went down 9%,

01:20:36 ◼   ► which means there was for sure,

01:20:39 ◼   ► there was for sure a more of a drop off

01:20:42 ◼   ► from the high end than there has been in previous quarters.

01:20:45 ◼   ► Now, was it a disaster?

01:20:46 ◼   ► Of course not.

01:20:47 ◼   ► It wasn't even close to being a disaster.

01:20:48 ◼   ► But it was, you know, and there's this quote

01:20:51 ◼   ► that Cook had where he's like, yeah, maybe you'd like to win the Super Bowl by more points,

01:20:56 ◼   ► but you still won the Super Bowl. It's a great phone. That sure sounds like Tim Cook saying,

01:21:00 ◼   ► well, we thought we could have done more, but we still did pretty good, which means

01:21:05 ◼   ► your quote was right. It was short of expectations, but it was not a disaster.

01:21:09 ◼   ► No, I don't know about expectations. I think maybe short of hopes, right? Like realistic

01:21:14 ◼   ► hopes. You know what I mean? I think it was exactly within expectations. And the other

01:21:19 ◼   ► And I think you're right that the drop off quarter to quarter, in other words going from

01:21:24 ◼   ► the first two months, because it wasn't on sale for the whole quarter in the holiday

01:21:31 ◼   ► quarter, right?

01:21:32 ◼   ► The iPhone X was-

01:21:33 ◼   ► Right, but all we could look at is the whole quarter though.

01:21:36 ◼   ► That's the most information.

01:21:37 ◼   ► But I actually think that's kind of interesting because it was only available for two months

01:21:41 ◼   ► in that quarter.

01:21:42 ◼   ► And it's so clear that so many of the people who wanted to get an iPhone X right away bought

01:21:47 ◼   ► it right away, that even though it was only available for two months in that quarter,

01:21:51 ◼   ► it still was a bigger drop off quarter to quarter from the December quarter to the March

01:21:59 ◼   ► quarter than, like you said, the last two or three years.

01:22:03 ◼   ► It was still a bigger drop off.

01:22:04 ◼   ► - It's really weird because the other thing that's weird is they were in supply demand

01:22:08 ◼   ► balance or something or close to it by the end of the quarter.

01:22:12 ◼   ► And that was also, that was the other big warning sign for the iPhone X, is usually

01:22:15 ◼   ► when Apple launches a new phone, the most successful ones,

01:22:18 ◼   ► by the end of the quarter, there's still not

01:22:19 ◼   ► what they call supply-demand balance,

01:22:21 ◼   ► where they're selling more than they can make.

01:22:24 ◼   ► And the problem was the iPhone X,

01:22:26 ◼   ► within literally like five weeks, was already in balance.

01:22:29 ◼   ► So there was a lot, so even last quarter,

01:22:31 ◼   ► and I think I wrote this after last quarter,

01:22:33 ◼   ► I was very worried about this current quarter,

01:22:36 ◼   ► because wow, if they're already in supply-demand balance,

01:22:39 ◼   ► like how much more demand is there for the device?

01:22:43 ◼   ► So I will say from my perspective,

01:22:45 ◼   ► it did better than I expected because I was worried about that specific point from last

01:22:49 ◼   ► quarter.

01:22:51 ◼   ► But that said, you can't say it was ... There was a drop off.

01:22:59 ◼   ► It was so oversold and overhyped by, I think, Bloomberg in particular.

01:23:04 ◼   ► But it's had a profound effect on the average selling price of iPhones because even with

01:23:10 ◼   ► that drop off from the last quarter, if you look at the year over year, January, February,

01:23:15 ◼   ► March of last year, in January, February, March this year, the average selling price

01:23:19 ◼   ► went to, I don't have notes, I'm doing this from my memory yesterday, but I think it went

01:23:23 ◼   ► from 659 average selling price to 729, or something.

01:23:29 ◼   ► That is pretty good, it went from 656 to 729.

01:23:32 ◼   ► All right.

01:23:33 ◼   ► So an 11% increase, which is huge.

01:23:37 ◼   ► Last year, the year over year increase was 2%.

01:23:40 ◼   ► For a 10 year old product.

01:23:41 ◼   ► ten-year-old product to all of a sudden have an average selling price increase

01:23:46 ◼   ► you know in an industry where as is you know three or four years ago everybody

01:23:52 ◼   ► thought that the average selling price for everything iPhone included was going

01:23:55 ◼   ► to sink you know that it was going to and who knows that still may happen

01:23:59 ◼   ► eventually I mean I'd you know in a long enough run it's probably going to happen

01:24:04 ◼   ► you know but you know the way that the PCs Oh PCs constantly got cheaper like

01:24:10 ◼   ► The average selling price of PCs didn't go up 10 years

01:24:14 ◼   ► into the PC revolution.

01:24:17 ◼   ► PCs used to cost $6,000, $7,000.

01:24:20 ◼   ► And now they cost $200.

01:24:24 ◼   ► No, you're hitting the exact right point.

01:24:27 ◼   ► It's so easy it's stuck in the weeds of where is it,

01:24:29 ◼   ► relatively speaking.

01:24:31 ◼   ► If you just step back for a moment,

01:24:33 ◼   ► the iPhone X is an unbelievable triumph,

01:24:35 ◼   ► from a financial and business perspective.

01:24:38 ◼   ► We are 10 years into smartphones, 11 years into smartphones.

01:24:41 ◼   ► And Apple, I kind of wrote about this week,

01:24:44 ◼   ► like when I first started to tech, it was 2013,

01:24:46 ◼   ► I got a, wrote about the iPhone 5C so much.

01:24:50 ◼   ► 'Cause it was such, it was this huge deal.

01:24:51 ◼   ► Apple has to release its cheaper phone,

01:24:52 ◼   ► has to release its cheaper iPhone.

01:24:53 ◼   ► Here we are five years later,

01:24:55 ◼   ► and Apple has jacked up the price of the highest end iPhone

01:24:58 ◼   ► by what, 33%, and they're selling gobs of them.

01:25:03 ◼   ► And yes, we can quibble about the relative amount

01:25:06 ◼   ► of those gobs, but the fact remains that they are absolutely defying gravity in a way that

01:25:12 ◼   ► if you didn't really think about how Apple works and why they could accomplish that,

01:25:15 ◼   ► would seem totally preposterous.

01:25:17 ◼   ► Yeah.

01:25:18 ◼   ► Yeah.

01:25:19 ◼   ► I noted that in your daily update today, that that was a great callback to the 5C, which

01:25:24 ◼   ► was just a couple of years ago.

01:25:26 ◼   ► But yes, the 5C was seen as a big WTF by the industry because the rumors had linked that

01:25:33 ◼   ► they're making a phone it'll be plastic instead of metal and everybody quote

01:25:38 ◼   ► unquote everybody assumed that Apple had to make a quote cheap iPhone so

01:25:44 ◼   ► obviously the plastic one would be the cheap one and so it's gonna have some

01:25:47 ◼   ► kind of you know the most exciting thing about it is gonna be this exciting low

01:25:50 ◼   ► price point and it came out at exactly you point out exactly the price that it

01:25:56 ◼   ► they would have had if they had just kept the original iPhone 5 around for

01:26:02 ◼   ► another year. Which little birdies say was really hard to manufacture and very high return

01:26:07 ◼   ► rates, and there was a very good reason to retire it.

01:26:09 ◼   ► And had an anodization problems that customers weren't happy with. The black, if you recall,

01:26:17 ◼   ► the iPhone 5 had a black variant, and those chamfered edges and the iPhone 5s went to

01:26:26 ◼   ► space gray, I think, and it was a much lighter dark, darkening to the aluminum.

01:26:33 ◼   ► Wasn't really that dark at all.

01:26:34 ◼   ► No, it was, yeah, it was true.

01:26:36 ◼   ► No, in the five, I believe I had a black one.

01:26:40 ◼   ► Yeah, it was amazing when you bought it and looked like absolute garbage with it.

01:26:43 ◼   ► But I kind of like that.

01:26:44 ◼   ► You would get that chipping and stuff on it.

01:26:46 ◼   ► I like it.

01:26:47 ◼   ► I agree, I agree.

01:26:48 ◼   ► I don't placate, like, I like the sort of like beaten, weathered look, so I don't mind

01:26:52 ◼   ► it.

01:26:53 ◼   ► But I know that some people don't, though.

01:26:56 ◼   ► with their $700 iPhones that they're hoping to resell eventually.

01:27:00 ◼   ► So yes, there were problems with it.

01:27:02 ◼   ► But anyway, it's such a good, from there to here difference, where everybody expected

01:27:11 ◼   ► Apple to make a cheap phone and they didn't and they thought it was a mistake.

01:27:15 ◼   ► And now they've made a more expensive phone than ever.

01:27:20 ◼   ► And it's, you know, it's maybe not the biggest hit it possibly could have been, but it's

01:27:25 ◼   ► clearly selling well enough that it has significantly altered the average selling price of an iPhone.

01:27:31 ◼   ► Right.

01:27:32 ◼   ► And I mean, Apple, to be fair, Apple did raise the price of the iPhone 8 and 8 Plus.

01:27:37 ◼   ► Compared to the 7 and 7 Plus when they were brand new a year ago.

01:27:41 ◼   ► Right, exactly.

01:27:44 ◼   ► But that kind of makes the point even further, right?

01:27:47 ◼   ► They're also raising their second-tier phone prices, and it doesn't really matter.

01:27:51 ◼   ► The other thing is, yes, unit sales have flattened, and people are right to point that out, but

01:27:58 ◼   ► I think there's a difference.

01:28:00 ◼   ► This is something that people just have ... There's a difference between saying Apple has saturated

01:28:05 ◼   ► ... This is why the phone market's so great.

01:28:07 ◼   ► I think it's fair to say Apple has largely saturated the high-end phone market, and to

01:28:11 ◼   ► the extent they pick up new users.

01:28:13 ◼   ► They have always picked up switchers because people are far ... Apple customers almost

01:28:18 ◼   ► always buy ... iPhone customers almost always buy new iPhones, whereas the average Android

01:28:23 ◼   ► purchaser, their likelihood of buying the same phone is significantly lower.

01:28:26 ◼   ► So if you just work out the math, by definition, Apple's going to be picking up switchers over

01:28:29 ◼   ► time.

01:28:30 ◼   ► But that's counterbalanced by the fact people do hold onto their phones longer than they

01:28:34 ◼   ► used to.

01:28:35 ◼   ► But at the end of the day, phones wear out.

01:28:38 ◼   ► They break, they get old, they're personal accessories that people carry with them.

01:28:42 ◼   ► They want to have the hot new thing.

01:28:44 ◼   ► And so that makes us a great market to be in because sure, there may be a limit to how

01:28:48 ◼   ► large Apple can grow as far as their base, and they may be close to it, but they're not

01:28:54 ◼   ► losing anyone.

01:28:55 ◼   ► And this is the ... When I first started to techery and very much into things like disruption

01:29:01 ◼   ► and sort of business theory and stuff like that, and I was so sure that there was something

01:29:07 ◼   ► wrong there because you remember there was all the predictions.

01:29:10 ◼   ► Apple is gonna be disrupted and the low-price competitors

01:29:12 ◼   ► are gonna come along.

01:29:13 ◼   ► And that was one of the reasons I wanted to start

01:29:15 ◼   ► to checkery is, obviously you and other folks

01:29:18 ◼   ► were writing that this makes no sense,

01:29:19 ◼   ► but for me, coming from the sort of business theoretical

01:29:22 ◼   ► perspective, I wanted to put sort of like the theory around

01:29:25 ◼   ► why it doesn't make sense.

01:29:26 ◼   ► And a big thing there was all these analysis,

01:29:31 ◼   ► we're all taking examples from the enterprise market, right?

01:29:34 ◼   ► Where yes, you come in and you buy, you sell something

01:29:37 ◼   ► cheaper that has the same features,

01:29:39 ◼   ► and you can convince the CIO to buy it,

01:29:40 ◼   ► and he doesn't care how it works.

01:29:42 ◼   ► Someone else has to actually deal with it.

01:29:44 ◼   ► But the consumer market's totally different.

01:29:45 ◼   ► People like nice things.

01:29:47 ◼   ► And it's so bizarre because you look at

01:29:49 ◼   ► basically every other category of products people buy,

01:29:52 ◼   ► and there are successful products at the high end.

01:29:55 ◼   ► It's not like luxury bags get disrupted,

01:29:58 ◼   ► or nice clothes get disrupted, or nice shoes get disrupted.

01:30:01 ◼   ► No, they continue to sell and will always sell

01:30:04 ◼   ► because people like nice things.

01:30:05 ◼   ► And why that shouldn't apply to your phone

01:30:08 ◼   ► doesn't make any sense.

01:30:09 ◼   ► - Right, and isn't one of,

01:30:10 ◼   ► Clayton Christensen, am I right?

01:30:14 ◼   ► - Clayton Christensen.

01:30:15 ◼   ► - One of his examples from his theory

01:30:16 ◼   ► is like steel suppliers and how like the big,

01:30:21 ◼   ► you know, like US Steel got like undercut by like,

01:30:24 ◼   ► you know, micro--

01:30:26 ◼   ► - Yeah, mini mills, yeah.

01:30:27 ◼   ► - Great example and it's, you know,

01:30:30 ◼   ► and I think he's, I think his, you know,

01:30:32 ◼   ► I've read it and it's like I'm nodding my head

01:30:35 ◼   ► and it's, you know, a little bit outside my wheelhouse

01:30:37 ◼   ► but I'm like, this makes a lot of sense, I agree with this.

01:30:40 ◼   ► But the way that a manufacturer who buys raw steel

01:30:44 ◼   ► evaluates who they're gonna buy the raw steel from

01:30:47 ◼   ► is very different than the way that individual people

01:30:50 ◼   ► buy their personal, the things they use

01:30:54 ◼   ► in their personal life.

01:30:55 ◼   ► - I made a list somewhere of all the industries

01:31:00 ◼   ► that Christensen uses as examples,

01:31:02 ◼   ► and they were all like airlines

01:31:03 ◼   ► and like all these sorts of things.

01:31:04 ◼   ► Like they were all business to business,

01:31:07 ◼   ► businesses where there was a buyer buying a product for a fleet of people or whatever,

01:31:13 ◼   ► and they were not the user of the product.

01:31:16 ◼   ► They weren't going to care about the consumer user experience.

01:31:20 ◼   ► And the other thing I know at the time, there were actually lots of other examples of products

01:31:24 ◼   ► where people did care, where the buyer was the user.

01:31:27 ◼   ► Things like game consoles, things like clothes and accessories, I just talked about a moment

01:31:31 ◼   ► ago.

01:31:32 ◼   ► Things like cars.

01:31:33 ◼   ► cars as an analogy for why Apple would succeed, and it's a totally legitimate analogy, right?

01:31:38 ◼   ► Because people buy nice cars.

01:31:40 ◼   ► Does everyone buy nice cars?

01:31:42 ◼   ► Can BMW take over the entire market selling high priced cars?

01:31:45 ◼   ► No, they can't, but can they sell ... Are they going to be disrupted because Chevy comes

01:31:51 ◼   ► out with something cheap?

01:31:52 ◼   ► No, they're not.

01:31:53 ◼   ► The second most successful retailer, I don't know if it's worldwide, but certainly in the

01:31:57 ◼   ► United States, year after year, and they've been around for a while by square footage.

01:32:05 ◼   ► Second dollars of profit by square footage of retail space is Tiffany & Company.

01:32:11 ◼   ► And you can go in there and if you've ever bought a diamond and you get the color and

01:32:16 ◼   ► the clarity and the cut and the grade and the certified, and you can buy a cheaper diamond

01:32:23 ◼   ► Ring probably at any, almost any other store. And Tiffany is the second most profitable

01:32:33 ◼   ► retailer in the world by square foot. Yeah, and not just that, but even there, you

01:32:39 ◼   ► can buy the same quality jewelry for much cheaper somewhere else. So it's not just a

01:32:44 ◼   ► matter of it being jewelry. You're paying more for the Tiffany brand, but that's how

01:32:48 ◼   ► brands work. But I mean, that's- But you also get, it's more than just the brand note. You

01:32:52 ◼   ► You also get, and I can vouch for this firsthand, you get some of the best customer experience

01:32:59 ◼   ► you'll get anywhere in the world in terms-

01:33:01 ◼   ► Oh, absolutely.

01:33:04 ◼   ► And people thinking about this in such black and white terms and putting it on a spreadsheet,

01:33:09 ◼   ► that stuff matters.

01:33:10 ◼   ► I mean, one thing I learned when I started flying a lot, for example, and I remember

01:33:14 ◼   ► when I first got United 1K here.

01:33:17 ◼   ► And yeah, it's great.

01:33:19 ◼   ► I really wanted to get it because I get all the upgrades.

01:33:22 ◼   ► You get like six international upgrades or something like that, which is a huge deal.

01:33:25 ◼   ► But I realized actually the upgrades aren't that big of a deal.

01:33:28 ◼   ► It's the fact that I can pick up a phone and dial a number and a human picks up immediately.

01:33:32 ◼   ► And like I remember I was in Korea one time and something happened with my flight and

01:33:35 ◼   ► I just dialed the number, pick it up, and boom, it was all fixed for me in like 10 minutes.

01:33:39 ◼   ► And like that is worth so much.

01:33:41 ◼   ► At the time my whole family was with me.

01:33:43 ◼   ► And that was worth 100 upgrades, right?

01:33:46 ◼   ► That's what actually matters when it comes to these sorts of experiences.

01:33:50 ◼   ► Yeah, oh, I found though I found the list by the way the original article the original disruption article looked at disk drives

01:33:57 ◼   ► PC's mortgage banking micro processors and software and I think it's in also like air

01:34:03 ◼   ► Visual aircraft medical devices things like that. I think it's interesting that PCs is in there because I think

01:34:09 ◼   ► Have we talked about this on this podcast? I certainly talked about on mine that the

01:34:14 ◼   ► So much bad analysis and technology comes from people that don't actually understand what happened in the PC industry in the 80s

01:34:21 ◼   ► Like people have this vision of Apple being this sort of dominant force than Microsoft coming along and disrupting them by being open and closed

01:34:28 ◼   ► And it's just utter it could not be more wrong like Microsoft the IBM PC came out first in

01:34:36 ◼   ► 1981 and did have a Windows GUI. No it had you know it had a

01:34:40 ◼   ► text-based operating system

01:34:42 ◼   ► But the point of Windows coming along

01:34:45 ◼   ► was Windows was backwards compatible with DOS.

01:34:48 ◼   ► And so DOS built up a huge user base,

01:34:50 ◼   ► built up a huge amount of software,

01:34:51 ◼   ► built up developers, the entire ecosystem

01:34:53 ◼   ► before the Mac even launched.

01:34:55 ◼   ► Like the Mac never had a chance relative to IBM PCs

01:35:00 ◼   ► and it turned out that adding a Windows GUI,

01:35:02 ◼   ► it was a feature.

01:35:04 ◼   ► Like obviously it was a feature that changed the world,

01:35:07 ◼   ► but it was still a feature.

01:35:08 ◼   ► It didn't change the way the business model worked.

01:35:10 ◼   ► and to say that Apple lost because they were closed

01:35:14 ◼   ► and Microsoft is open is to utterly and completely

01:35:16 ◼   ► miss the point and it's so damaging,

01:35:18 ◼   ► not just because it misses the point,

01:35:20 ◼   ► but also the only reason Apple succeeded

01:35:23 ◼   ► was because they were closed.

01:35:25 ◼   ► When Apple actually opened up in the 90s,

01:35:28 ◼   ► it almost killed the company.

01:35:30 ◼   ► Being closed made them a viable company

01:35:32 ◼   ► in the midst of sort of the Microsoft dominance.

01:35:35 ◼   ► >> I think you would agree with this.

01:35:36 ◼   ► I've written, this is a topic we've both written about

01:35:39 ◼   ► I love it, but and it's so doesn't matter how much we write we could write about it every day for the rest of world

01:35:45 ◼   ► And it's not gonna change the perception of everybody who there's no way you're gonna shake people off that open and closed argument

01:35:50 ◼   ► But the one thing that I believe firmly was that and and me personally I was I've all I to this day

01:35:58 ◼   ► I'm repulsed by Windows, but especially in that in like the late 80s and there throughout the whole 90s

01:36:04 ◼   ► I thought Windows 95 was garbage

01:36:06 ◼   ► I agreed it looked better than Windows 3.1, but I still didn't think it looked good.

01:36:11 ◼   ► And just the way that it was built off DOS and you still had like a stupid C drive and

01:36:17 ◼   ► all the ridiculous file name restrictions, blah, blah.

01:36:20 ◼   ► I mean, the thousand, thousand things that were ungodly because of the way that it was

01:36:25 ◼   ► built off DOS.

01:36:26 ◼   ► But I also firmly believe that business-wise, if Windows, like to make Windows actually

01:36:32 ◼   ► be good, it couldn't have been built on top of DOS.

01:36:36 ◼   ► would have needed to have been an all new operating system.

01:36:39 ◼   ► And if they had done that and done a graceful job and made something like, let's say, that

01:36:44 ◼   ► was at least as elegant and self-contained as the Macintosh, I don't think it would have

01:36:49 ◼   ► … I think it would have failed.

01:36:51 ◼   ► Because it was the fact that Windows built on top of DOS that made it palatable to the

01:37:02 ◼   ► people in IT.

01:37:03 ◼   ► Because I remember the time that the mentality of the people who I knew who were PC

01:37:08 ◼   ► enthusiasts and would it be the type of people who would be making these decisions at a business or a company is

01:37:13 ◼   ► They might think well, this is great because you know these people who are confused by DOS

01:37:19 ◼   ► They can run windows and they can get this gooey thing

01:37:22 ◼   ► But I'm not you know

01:37:23 ◼   ► Their machines still booted into DOS and they only ran windows when they typed win at the command prompt

01:37:29 ◼   ► You know they didn't have their machine set up to boot into windows their machines booted into DOS

01:37:33 ◼   ► because they were quote-unquote real computer users and

01:37:37 ◼   ► If they would have had to buy a different machine and

01:37:41 ◼   ► Run an incompatible operating system to get the GUI they would they wouldn't have bought into it

01:37:46 ◼   ► It was the whole reason they they scoffed at the Mac

01:37:48 ◼   ► Yeah with your you one you're completely right to the other thing is you know

01:37:55 ◼   ► There was lots of software written for DOS and it needed to be able to run and and I would go further than you

01:38:01 ◼   ► it's not just that it would have failed because

01:38:03 ◼   ► because, but it would have failed because Microsoft was fundamentally unsuited to write

01:38:09 ◼   ► a graceful, beautiful computer that was easy to use.

01:38:13 ◼   ► That's not at all a criticism.

01:38:16 ◼   ► The foundation of Microsoft is responding and hustling to give consumers exactly what

01:38:21 ◼   ► they want.

01:38:22 ◼   ► Bill Gates and Paul Allen started a company in New Mexico because they wanted, basically

01:38:27 ◼   ► someone wanted to write a basic compiler and they said, "Oh, we got one.

01:38:30 ◼   ► We'll write it."

01:38:31 ◼   ► and they said, "Okay, you give it to us,"

01:38:33 ◼   ► and they hadn't written it yet.

01:38:34 ◼   ► They had to go and write it.

01:38:36 ◼   ► And same thing with IBM.

01:38:38 ◼   ► Microsoft won the IBM contract for an operating system

01:38:40 ◼   ► without having an operating system.

01:38:42 ◼   ► They actually bought DOS from a company called

01:38:44 ◼   ► Seattle Computer Company or something like that,

01:38:46 ◼   ► renamed it to MS-DOS, and then gave it to IBM.

01:38:50 ◼   ► And again, it's easy to sit here from a product perspective

01:38:53 ◼   ► and an Apple perspective and criticize that and mock it.

01:38:56 ◼   ► You know what, there are all kinds of ways

01:38:58 ◼   ► to build companies, and Microsoft from the beginning

01:39:00 ◼   ► has given customers exactly what they want,

01:39:02 ◼   ► for better or worse.

01:39:03 ◼   ► And they have made a whole lot of money doing it

01:39:06 ◼   ► and enabled a whole lot of things.

01:39:07 ◼   ► And implied in that is, you know,

01:39:10 ◼   ► you're gonna layer a GUI on top of a operating system

01:39:13 ◼   ► that you bought from someone else

01:39:14 ◼   ► and is a mishmash and stuff,

01:39:16 ◼   ► and it's gonna be clunky and hard to use.

01:39:18 ◼   ► But you know what?

01:39:19 ◼   ► It got the job done.

01:39:20 ◼   ► And you know, Mike, this is the mistake,

01:39:24 ◼   ► huge mistake they made with the phone.

01:39:25 ◼   ► They just wanted to come and be like,

01:39:26 ◼   ► oh yeah, we're gonna compete with Apple

01:39:28 ◼   ► on the user experience.

01:39:29 ◼   ► No you're not, you have 30 years of papering over,

01:39:33 ◼   ► glommed together crap because it's what the customer wants.

01:39:37 ◼   ► You're not gonna suddenly develop the skills and mentality

01:39:40 ◼   ► to build a beautiful, easy to use operating system, right?

01:39:44 ◼   ► I mean, it blows my mind that Windows Phone

01:39:47 ◼   ► had far worse support for enterprise features

01:39:50 ◼   ► than the iPhone did from the day it launched

01:39:52 ◼   ► until the day it went out of business.

01:39:53 ◼   ► Like, it's like they were crazy, they totally forgot.

01:39:56 ◼   ► And this was Balmer's, one of his biggest mistakes.

01:39:58 ◼   ► I mean, he had a whole bunch of them,

01:39:59 ◼   ► but he completely forgot, he got so wrapped up

01:40:02 ◼   ► in Microsoft being big and powerful,

01:40:04 ◼   ► and completely forgot the nature of the company

01:40:07 ◼   ► and what they were actually good at.

01:40:08 ◼   ► And to the extent that Adala has been successful,

01:40:10 ◼   ► he's been phenomenally successful,

01:40:12 ◼   ► it's been in going back to and embracing that Microsoft,

01:40:16 ◼   ► what they are good at.

01:40:17 ◼   ► And you know what, they go to enterprise customers,

01:40:19 ◼   ► like, we will help you, we'll go to the cloud with you,

01:40:20 ◼   ► we'll have a hybrid environment,

01:40:21 ◼   ► you can run some of your stuff on your on-premise,

01:40:23 ◼   ► or you're running some of your stuff in the cloud,

01:40:25 ◼   ► and it's gonna be a big mess, and it's gonna be messy,

01:40:26 ◼   ► but we'll be messy together.

01:40:27 ◼   ► And they're being extremely successful doing it,

01:40:30 ◼   ► because that's what Microsoft does.

01:40:32 ◼   ► And anyhow, sorry, that was a rant.

01:40:35 ◼   ► But I completely agree with you that if Microsoft

01:40:37 ◼   ► tried to compete with a Mac in a user experience perspective,

01:40:41 ◼   ► they would have failed completely

01:40:42 ◼   ► for all kinds of reasons.

01:40:44 ◼   ► I think that complaining about Microsoft, especially Bill

01:40:47 ◼   ► Gates era of Microsoft not producing elegant Mac

01:40:54 ◼   ► caliber elegance

01:40:56 ◼   ► Intuitive software would be like complaining that you know you just went in the butcher shop and the guy

01:41:02 ◼   ► Here's a guy who's supposed to be a professional and is wearing a smock covered with blood

01:41:06 ◼   ► You know it's like that's not who they are you know

01:41:10 ◼   ► I mean like Microsoft is the butcher who's you know is to get their hands are dirty and their their work clothes are covered with blood

01:41:17 ◼   ► You know and they got the job done right and then them you know trying to make Windows Phone was them like you know after

01:41:24 ◼   ► doing that, that's their expertise, that's who they are.

01:41:26 ◼   ► And then they're like, "I'm gonna be on the cover of GQ."

01:41:28 ◼   ► And it's like, "No, you're not!"

01:41:30 ◼   ► (laughing)

01:41:31 ◼   ► You are not suddenly gonna become a sharp, snappy dresser.

01:41:35 ◼   ► - Right, and that's the thing with Apple.

01:41:37 ◼   ► Apple, the key to Apple coming back

01:41:40 ◼   ► is not Steve Jobs' genius directly.

01:41:44 ◼   ► What was key was the shift in the market

01:41:47 ◼   ► to the consumer market.

01:41:48 ◼   ► Because the thing is, Jobs was always a consumer guy.

01:41:51 ◼   ► So Mac was a consumer product.

01:41:53 ◼   ► The problem is the Mac was a consumer product in a world where only businesses bought computers.

01:41:57 ◼   ► The big difference for the iPhone relative to the Mac is not open versus closed.

01:42:02 ◼   ► It's that by 2007, the consumer market mattered far more than the business market, was far

01:42:08 ◼   ► larger and Apple had always been the right company for that market.

01:42:12 ◼   ► They were just 30 years too early.

01:42:15 ◼   ► I agree completely.

01:42:17 ◼   ► I don't know if we've talked about this before, but I love talking about this.

01:42:20 ◼   ► I agree completely, and I think even Steve Jobs himself overlooked that aspect.

01:42:29 ◼   ► And if, you know, that, that it, you know, and I think that that's why the Mac in the

01:42:38 ◼   ► first two years was sort of problematic for Apple because it wasn't a failure, but it

01:42:43 ◼   ► wasn't the success that they had envisioned.

01:42:46 ◼   ► And I think that the success they'd envisioned

01:42:49 ◼   ► was that they themselves knew how amazing it was,

01:42:53 ◼   ► both compared to everything else on the market

01:42:56 ◼   ► and just in and of itself how successful they were

01:42:59 ◼   ► at the hardware, at the software, just everything about it,

01:43:03 ◼   ► that they were, you know, I think they were blinded

01:43:07 ◼   ► by how can, you know, and even the slogan,

01:43:09 ◼   ► the computer for the rest of us.

01:43:11 ◼   ► - There was no rest of us.

01:43:12 ◼   ► - Right, there was no rest of us.

01:43:13 ◼   ► There was nothing for them to do.

01:43:14 ◼   ► It would have been the computer.

01:43:16 ◼   ► And the things that were good about the Mac in 1984

01:43:21 ◼   ► are, if you just pick out a bunch of adjectives,

01:43:26 ◼   ► there, those, I would wager that 98% of those adjectives

01:43:30 ◼   ► apply to the iPhone in 2007.

01:43:33 ◼   ► Like, they're all the things that made, you know,

01:43:37 ◼   ► kindred spirits, same cultural DNA, same priorities.

01:43:43 ◼   ► It's just that the difference wasn't that one was more elegant or more ahead of the

01:43:48 ◼   ► competition, years ahead of the competition, and sweated more details and more pixel by

01:43:56 ◼   ► pixel precision of how far away should these things be and all of that.

01:44:02 ◼   ► Both were the same way.

01:44:03 ◼   ► The difference wasn't that one was better than the other.

01:44:05 ◼   ► The difference was that in 2007, there was a tremendous reason for anybody and everybody

01:44:11 ◼   ► to want to have an iPhone and there were things they would find it very useful for every single

01:44:15 ◼   ► day and in 1984 that just wasn't true of a personal computer.

01:44:21 ◼   ► It's spot on.

01:44:22 ◼   ► It really is the case.

01:44:24 ◼   ► The Mac versus Windows really is like the iPhone versus Android in every respect.

01:44:30 ◼   ► It's the same in terms of market share.

01:44:32 ◼   ► The iPhone is a little bigger than the Mac even today, but it's still only like 10 or

01:44:38 ◼   ► 12% worldwide.

01:44:39 ◼   ► It's really quite small relative to Android.

01:44:41 ◼   ► And it's the same from the user experience.

01:44:44 ◼   ► Windows has some nice features.

01:44:45 ◼   ► Android has some nice features.

01:44:46 ◼   ► I've used both.

01:44:47 ◼   ► I've worked at Microsoft.

01:44:48 ◼   ► I use it every day.

01:44:50 ◼   ► I've said before, I'd actually be fine using Windows every day.

01:44:52 ◼   ► It's the third party app system that is the problem, which

01:44:55 ◼   ► blows people's mind because they associate apps

01:44:57 ◼   ► being with Windows.

01:44:59 ◼   ► But it's the details.

01:45:03 ◼   ► It's the ease of use.

01:45:04 ◼   ► It's the scrolling.

01:45:05 ◼   ► It's all the stuff that you can't put on a spreadsheet,

01:45:09 ◼   ► and you can't measure, and you can't put in your

01:45:12 ◼   ► sort of calculation about, oh, it's now good enough,

01:45:14 ◼   ► so what's gonna matter now is price,

01:45:16 ◼   ► because people can feel it and use it,

01:45:19 ◼   ► and that matters, again, it matters when the buyer

01:45:22 ◼   ► is the user, which is the case in the consumer market,

01:45:25 ◼   ► and Apple's just found the right market.

01:45:27 ◼   ► - Right, and I think in hindsight, too,

01:45:29 ◼   ► it's exactly why the entire, the entirety of the existence

01:45:34 ◼   ► of Next was effectively just an exile.

01:45:39 ◼   ► They were just lost in the weeds in terms of ever

01:45:42 ◼   ► having any hope of getting any traction whatsoever

01:45:45 ◼   ► because they were building these--

01:45:46 ◼   ► - It was the Mac 2.0.

01:45:49 ◼   ► There was no lesson learned about why the Mac failed.

01:45:51 ◼   ► - Except by pricing it the way they did

01:45:54 ◼   ► and they made it a way more amazing computer.

01:45:58 ◼   ► But initially it was targeted at academia.

01:46:03 ◼   ► - Well how the hell did they ever think

01:46:04 ◼   ► that was gonna be a big enough market

01:46:07 ◼   ► to build a successful computer

01:46:08 ◼   ► by only selling it to universities,

01:46:11 ◼   ► computer science departments?

01:46:13 ◼   ► I mean it's kinda crazy.

01:46:14 ◼   ► I mean I know that--

01:46:16 ◼   ► - Jobs just wanted to make the best possible computer.

01:46:19 ◼   ► And so he was gonna find

01:46:22 ◼   ► that was the justification for doing it.

01:46:24 ◼   ► And that's the thing why you have to keep the market in mind.

01:46:28 ◼   ► Again, Jobs didn't change from that perspective.

01:46:31 ◼   ► When he made the phone,

01:46:32 ◼   ► He wanted to make the best possible phone.

01:46:33 ◼   ► It's not like he said, "Oh, now the consumer market's ready.

01:46:35 ◼   ► Let's do it."

01:46:36 ◼   ► No, he just wanted, like, Apple has just always wanted

01:46:39 ◼   ► to make the best possible computers,

01:46:40 ◼   ► and those computers have shrunken in size over time,

01:46:43 ◼   ► and the market has come to Apple much more

01:46:45 ◼   ► than Apple has sort of gone to the market.

01:46:48 ◼   ► - Yeah.

01:46:49 ◼   ► All right, let me take a break here

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01:47:06 ◼   ► that they've come out with called the Wave.

01:47:09 ◼   ► It is the most innovative mattress in their lineup,

01:47:12 ◼   ► and it's the first mattress of its kind

01:47:15 ◼   ► to relieve pressure at 36 different points

01:47:18 ◼   ► so you can feel relaxed in ways you never thought possible.

01:47:21 ◼   ► These are some of the features

01:47:22 ◼   ► of the Wave mattresses by Casper.

01:47:25 ◼   ► They've got advanced temperature regulating technology.

01:47:28 ◼   ► Helps you sleep cool and comfortable without overheating during the night.

01:47:33 ◼   ► Only the Wave has five layers of superior foam, including a cushioning top layer for

01:47:38 ◼   ► maximum comfort.

01:47:39 ◼   ► And it's their biggest breakthrough in sleep technology in the history of the company.

01:47:44 ◼   ► And look, these internet mattresses from Casper, they're really good.

01:47:49 ◼   ► We've got a couple of them in the house.

01:47:50 ◼   ► We love them.

01:47:51 ◼   ► I don't know what kind of mattresses we had before, but everybody likes them better than

01:47:55 ◼   ► what we had before.

01:47:56 ◼   ► The Wave in particular though, they studied back sleepers, stomach sleepers, and side

01:48:02 ◼   ► sleepers.

01:48:03 ◼   ► And the Wave is meant to be ideal for all three types.

01:48:07 ◼   ► And I said this before the last time they sponsored this show.

01:48:09 ◼   ► I don't know if I'm a weirdo or what, but I'm all three.

01:48:12 ◼   ► Like every time I wake up in the middle of the night, if I'm like on my side, the only

01:48:16 ◼   ► way I can get back to sleep is if I like turn over to my stomach or my back.

01:48:19 ◼   ► Like and if I wake up and I'm sleeping on my back, I have to like, you know, every time

01:48:23 ◼   ► I wake up, you know, whether it's to go to the bathroom or just, you just wake up for

01:48:26 ◼   ► a couple of seconds before you doze back off, I gotta switch to another way.

01:48:30 ◼   ► No matter which way you sleep, the Wave is a good choice for you.

01:48:35 ◼   ► They've got a patent-pending contouring system that adjusts to your natural curves.

01:48:42 ◼   ► And here's the thing, it's a premium mattress.

01:48:45 ◼   ► It's designed to keep its original form so you'll be supported for years to come.

01:48:49 ◼   ► So even after a couple of years, even though it's foam and even though it gives on the

01:48:53 ◼   ► contours of your body, once you get up off the mattress, it just looks brand new.

01:48:57 ◼   ► It is right back to the shape that it was when it first came in.

01:49:03 ◼   ► It really is great.

01:49:04 ◼   ► Now, buying a mattress on the internet, you haven't felt it.

01:49:07 ◼   ► You haven't sat on it.

01:49:08 ◼   ► You haven't laid on it.

01:49:09 ◼   ► You don't know what it's like.

01:49:10 ◼   ► You don't know what this ... Sure, I'm saying it sounds good.

01:49:13 ◼   ► Here's the thing.

01:49:14 ◼   ► Casper has still a 100-night risk-free guarantee.

01:49:19 ◼   ► You buy the mattress, it shows up.

01:49:21 ◼   ► When you get the Wave, it comes with in-home white glove delivery and set up for free.

01:49:30 ◼   ► So the Wave mattress comes, they just come in, take it right to your room, set it up,

01:49:35 ◼   ► and you have 100 days.

01:49:36 ◼   ► You call them up on the 99th day and say, "I don't like this thing."

01:49:40 ◼   ► No questions asked.

01:49:41 ◼   ► Come pick it up, take it back, and give you all your money back.

01:49:45 ◼   ► So you cannot lose.

01:49:46 ◼   ► You get this thing, try it for 100 nights, and if you don't like it, you don't lose.

01:49:51 ◼   ► take the whole thing back.

01:49:53 ◼   ► We really like them here.

01:49:55 ◼   ► It really is a great way to buy a mattress.

01:49:57 ◼   ► And to save $100 on a Wave mattress, you can save $100 with this.

01:50:03 ◼   ► Go to casper.com, C-A-S-P-E-R, casper.com/talkshow100.

01:50:11 ◼   ► Another no the, just talk show 100.

01:50:13 ◼   ► And then when you check out, just remember that promo code, talk show 100.

01:50:17 ◼   ► And you save $100.

01:50:20 ◼   ► Terms and conditions apply.

01:50:21 ◼   ► Now here's the other thing.

01:50:22 ◼   ► There's one more thing that Casper wanted me to tell you and I don't mind telling you.

01:50:25 ◼   ► I'm not scared of the competition.

01:50:29 ◼   ► But after you're done listening to this episode, sponsored by Casper, you can check out the

01:50:34 ◼   ► new Casper the Podcast, sponsored by Casper.

01:50:39 ◼   ► That's the name of their podcast.

01:50:40 ◼   ► Casper the Podcast, sponsored by Casper.

01:50:43 ◼   ► It's an entire podcast about Casper, sponsored by Casper.

01:50:48 ◼   ► It's very meta.

01:50:51 ◼   ► I'm intrigued by this.

01:50:52 ◼   ► I can't imagine what the hell it's about.

01:50:54 ◼   ► So I have to say I'm going to give it a listen.

01:50:56 ◼   ► It's available now on Apple Podcasts, SoundCloud, Stitcher, and anywhere else where you listen

01:51:02 ◼   ► to podcasts.

01:51:04 ◼   ► I'm damn curious about that.

01:51:06 ◼   ► And the only thing I hope, I just hope it doesn't mean that they're gonna stop sponsoring

01:51:10 ◼   ► other podcasts.

01:51:11 ◼   ► But I'll check it out.

01:51:12 ◼   ► Casper the podcast, sponsored by Casper.

01:51:16 ◼   ► I wish they would have asked me advice on the title of their podcast.

01:51:22 ◼   ► It's a little bit of a mouthful.

01:51:25 ◼   ► What else do we have to talk about?

01:51:26 ◼   ► We've got rolling out of these quarterly results.

01:51:30 ◼   ► You wrote about this.

01:51:32 ◼   ► Everybody's talking about this.

01:51:33 ◼   ► Who's going to be the first trillion dollar company?

01:51:35 ◼   ► And what do we mean by that?

01:51:37 ◼   ► I'll wait.

01:51:38 ◼   ► Ben?

01:51:39 ◼   ► Ben

01:51:39 ◼   ► Oh, sorry, I was muted. I just had the world's best explanation of market cap. But alas,

01:51:46 ◼   ► gone to history. No, basically how many shares you have times the share price. That's your

01:51:51 ◼   ► market cap, how much your company is worth.

01:51:52 ◼   ► Right. So you couldn't actually use it. In theory, it would be the price you'd have to

01:51:56 ◼   ► pay to buy every share of the company. But that's not possible. By the time you start

01:52:03 ◼   ► buying this, nobody's going to buy every share of Apple.

01:52:08 ◼   ► It's theoretically possible.

01:52:09 ◼   ► Theoretically possible, but that's the price you would pay number of shares outstanding times the current price. That's your market cap

01:52:15 ◼   ► So in other words what the company's worth and there's a couple of the who are the companies who are in the running for this

01:52:20 ◼   ► It's the they're all fairly obvious

01:52:22 ◼   ► Yeah

01:52:23 ◼   ► Well, I mean this is the will actually actually get the updated numbers because Apple's share price was was up a lot today a lot

01:52:30 ◼   ► today five percent real quick and

01:52:32 ◼   ► On a day when the market was literally like dead even at least last I checked

01:52:36 ◼   ► It was a right at like zero for this and p500. We got apples tops a second is

01:52:42 ◼   ► Amazon I think Microsoft is now slipped into third Microsoft and Google are very very close Microsoft and Google

01:52:50 ◼   ► Yeah, Microsoft has been they passed Google a few weeks ago

01:52:52 ◼   ► Which is which is interesting and then in fifth place. Oh, I got it. Yes. So the big five Apple is now at