Connected

00:00:00 ◼   ► [Music]

00:00:06 ◼   ► From Relay FM, this is Connected, episode number 88.

00:00:11 ◼   ► Today's show is brought to you by PDF Pen Pro from SMILE, the all-purpose PDF editing tool.

00:00:18 ◼   ► My name is Myke Hurley and I'm joined by Mr Federico Fittici.

00:00:24 ◼   ► Hello Myke.

00:00:25 ◼   ► Hello Federico, how the devil are you, sir?

00:00:28 ◼   ► I'm doing great, Myke. As I told you when you called me, I'm still kind of relaxing,

00:00:34 ◼   ► catching up. I'm gonna go grocery shopping later, you know, which is... It sounds like

00:00:40 ◼   ► a quick kind of task, but it takes me a couple of hours, you know. That's how I do my shopping.

00:00:46 ◼   ► So I'm doing great, Myke.

00:00:49 ◼   ► So I think Steven... Steven's not here this week. I think he's hunting IMAX.

00:00:52 ◼   ► Yeah, he's taken on a cross-country trip to find the remaining IMAX.

00:00:59 ◼   ► Because I think he only needs one more, and he has them all.

00:01:02 ◼   ► Only one?

00:01:04 ◼   ► I think it's only one. So he is, I believe, he's somewhere in California hunting for the final IMAX.

00:01:16 ◼   ► How do you hunt for an IMAX?

00:01:18 ◼   ► Exactly.

00:01:19 ◼   ► That's why he's not here, it took a little bit longer than he expected.

00:01:27 ◼   ► He's just got graphite left.

00:01:30 ◼   ► Graphite.

00:01:31 ◼   ► Which isn't, you know, it's not the most exquisite of colours if you think about it.

00:01:35 ◼   ► Because I believe he was able to find a pretty good Bondi.

00:01:38 ◼   ► Oh, look at that, look at that, good job.

00:01:42 ◼   ► So he got one of those.

00:01:45 ◼   ► Now he's off looking for a graphite, so I hope that he will be back next week and I

00:01:48 ◼   ► hope that he finds everything that he's looking for.

00:01:52 ◼   ► - Nice, good luck, Stephen.

00:01:53 ◼   ► - Good luck, Stephen.

00:01:54 ◼   ► - Thinking of you.

00:01:55 ◼   ► - We are, we are, good luck.

00:01:56 ◼   ► Because it's just me and you,

00:02:00 ◼   ► should we talk about something that we're doing?

00:02:02 ◼   ► - Yes.

00:02:03 ◼   ► - So Federico, everybody should know by now,

00:02:06 ◼   ► we spoke about this last week,

00:02:07 ◼   ► Federico is going to be traveling to San Francisco

00:02:12 ◼   ► and we are going together for WWDC

00:02:15 ◼   ► and I realized last week,

00:02:18 ◼   ► we knew that you were gonna be in London for one day,

00:02:20 ◼   ► you're coming to London

00:02:21 ◼   ► and then me and you were gonna stay in a hotel

00:02:23 ◼   ► near the airport and go from there together

00:02:26 ◼   ► out to San Francisco.

00:02:28 ◼   ► And me and you were gonna have dinner with some friends.

00:02:30 ◼   ► And I realized why have dinner with friends

00:02:32 ◼   ► when we can see lots of friends.

00:02:35 ◼   ► So we're gonna have a meetup in London,

00:02:39 ◼   ► a bar called the Big Chill House.

00:02:41 ◼   ► Now we have a limit on the amount of people

00:02:43 ◼   ► that we can fit in the room.

00:02:45 ◼   ► So we instituted a ticket policy for this,

00:02:48 ◼   ► and we had 70 tickets for the room.

00:02:50 ◼   ► They are all sold out.

00:02:52 ◼   ► Now the reason I am telling you all about this,

00:02:54 ◼   ► dear listener, is I spoke to the venue today,

00:02:57 ◼   ► and there is the possibility for us

00:02:59 ◼   ► to get a larger room at this place.

00:03:02 ◼   ► So if you are interested in coming to a connected meetup,

00:03:06 ◼   ► it will be me and Federico,

00:03:08 ◼   ► and we'll be hanging out at a great bar.

00:03:10 ◼   ► We did this meetup for upgrade in this area previously,

00:03:14 ◼   ► and you wanna come, it's on the 10th of June.

00:03:17 ◼   ► It starts from eight until 11.

00:03:19 ◼   ► You will need to have a ticket to come

00:03:21 ◼   ► because we have a maximum amount of people

00:03:22 ◼   ► we can fit in the room.

00:03:24 ◼   ► You can go to Tito, ti.to/relayfm

00:03:28 ◼   ► and you can find out more about the event.

00:03:31 ◼   ► Sign up for the waiting list.

00:03:33 ◼   ► There are nearly enough people on the waiting list now,

00:03:36 ◼   ► Federico, which will allow me to confidently book

00:03:39 ◼   ► this larger room.

00:03:41 ◼   ► - Oh, that's so insane.

00:03:43 ◼   ► So if you are interested, if everybody that we have

00:03:47 ◼   ► on the waiting list gets a ticket,

00:03:48 ◼   ► we're very nearly sold out as well for that larger room.

00:03:52 ◼   ► So once that's the case, that's as big as the room can be.

00:03:56 ◼   ► It takes about 150 people.

00:03:58 ◼   ► - It's just totally insane.

00:04:00 ◼   ► - Yeah, there's an amazing poster,

00:04:02 ◼   ► which I'll just put in the show notes anyway,

00:04:04 ◼   ► because Frank, as always, did an incredible job.

00:04:07 ◼   ► So we really hope that people can make it.

00:04:10 ◼   ► We're doing everything we can to increase the size for this one because we can.

00:04:16 ◼   ► With this instance we can actually increase it, but it will mean that everybody will need

00:04:20 ◼   ► to buy a few drinks because otherwise I will be left with a very large bill at the end

00:04:25 ◼   ► of the night.

00:04:27 ◼   ► So I hope that you can go check it out and we hope to see you in London in June.

00:04:32 ◼   ► Yeah, I mean, with all due respect, Myke, it's kind of crazy that this many people are

00:04:36 ◼   ► coming to meet us.

00:04:37 ◼   ► I mean, we're just...

00:04:38 ◼   ► Yeah, it's not me.

00:04:39 ◼   ► me, it's all for you. But I'm happy with that, I'm happy with that, I'm happy with that.

00:04:44 ◼   ► I don't think so, I don't think so. You're kind of an attraction lately.

00:04:48 ◼   ► Oh yeah? Yes you are. There's people constantly talking

00:04:52 ◼   ► about you and your iPads. That's true actually, I was on Mac Power Users.

00:04:57 ◼   ► See, see, you're the man of the hour, Myke. Katie was so mad. She was so upset about the

00:05:05 ◼   ► iPads is so good, it's such a good episode.

00:05:08 ◼   ► You gotta listen to that.

00:05:09 ◼   ► Yeah, it's well worth listening to.

00:05:12 ◼   ► I think at one point she just goes into complete despair about me, which is amazing.

00:05:17 ◼   ► It's amazing.

00:05:18 ◼   ► I love David and Katie and being on Mac Power Users is an honor because it is, as we have

00:05:24 ◼   ► mentioned many times, an absolute institution and we're very lucky to have it as a part

00:05:28 ◼   ► of Relay FM.

00:05:29 ◼   ► I was happy to go on the show to preach about my iPad, multi-iPad life, which I increased

00:05:36 ◼   ► today. Federico bought another pencil today. So I have both iPads now fully decked out

00:05:42 ◼   ► at all times.

00:05:44 ◼   ► I'm no longer surprised, Myke.

00:05:47 ◼   ► You know, I'm all in. I am all in. I'm taking what you started and I'm taking it to its

00:05:53 ◼   ► furthest point possible.

00:05:55 ◼   ► You're multiplying that, really.

00:05:58 ◼   ► And I'm actually planning this week for the incomparable project that I'm working on to

00:06:07 ◼   ► actually record something and edit it on iOS.

00:06:10 ◼   ► So I'm going to do that over the next week or so.

00:06:12 ◼   ► I'm really trying to go in all in here, my friend.

00:06:16 ◼   ► You should do a time lapse video of you trying to do that on the iPad.

00:06:19 ◼   ► Yeah, that would be...

00:06:20 ◼   ► You could see me pulling my hair out.

00:06:23 ◼   ► Actually, I wanted to mention one last thing about the meetup, just for everybody that

00:06:27 ◼   ► is coming and may come. If we do increase the capacity, the room will change. We had

00:06:35 ◼   ► it as a place called the Deco Room. It will be in a different room, but I'll send information

00:06:40 ◼   ► out about that if we do it because we're going to be getting a bigger room hopefully.

00:06:43 ◼   ► So please sign up and we'll hopefully see you there.

00:06:48 ◼   ► All right, so I wanted to mention, do you remember last week when we were talking about

00:06:54 ◼   ► our sponsor, I mentioned how maybe a wizard could create a confetti cannon to go off when

00:07:00 ◼   ► Ark finishes.

00:07:01 ◼   ► Yeah.

00:07:02 ◼   ► Well, there is a wizard.

00:07:04 ◼   ► Yep.

00:07:05 ◼   ► Oh my god.

00:07:06 ◼   ► Lucas tweeted at us with a script.

00:07:10 ◼   ► And what it will do is he actually did something very smart here.

00:07:14 ◼   ► It doesn't launch physical confetti.

00:07:16 ◼   ► It launches digital confetti on your computer screen whenever Ark completes a backup.

00:07:22 ◼   ► Bravo Lucas.

00:07:23 ◼   ► Bravo.

00:07:24 ◼   ► Look at that screenshot.

00:07:26 ◼   ► - It's fantastic, right?

00:07:27 ◼   ► - People are crazy, it's fantastic.

00:07:28 ◼   ► - So, you put it on GitHub, you can go and check it out.

00:07:31 ◼   ► And so it's very, very clever.

00:07:34 ◼   ► And I say bravo to the wizard that is Lucas

00:07:37 ◼   ► for creating our backup confetti cannon.

00:07:41 ◼   ► - Good job.

00:07:42 ◼   ► - Last week, we teased that you were working on a project

00:07:46 ◼   ► that I expect everybody knows about right now,

00:07:48 ◼   ► which was your iOS 10 wishes and concept video.

00:07:52 ◼   ► along with the dark theme for Mac Stories, which I am reminded about as I see the lovely

00:07:56 ◼   ► dark Mac Stories in front of me.

00:07:58 ◼   ► Oh, nice, you keep it activated.

00:08:00 ◼   ► Yep, keep it dark, my friend. And I am very flabbergasted by the views, view count in

00:08:12 ◼   ► this YouTube video.

00:08:13 ◼   ► It's approaching 400,000 views.

00:08:16 ◼   ► 400,000, Federico, 400,000.

00:08:21 ◼   ► It's a lot.

00:08:22 ◼   ► 78 people that gave it a thumbs down though. What do you what is your comments on that?

00:08:25 ◼   ► What do you think about those 78 people? I?

00:08:28 ◼   ► Think some of those people

00:08:31 ◼   ► Maybe half of those are just trying to to see what what it feels like to use the thumbs up down button

00:08:38 ◼   ► Yeah, maybe half is just an experiment. I'm gonna press the button

00:08:41 ◼   ► No, I dislike this. Oh, no. I know I've no I have liked it again. So I

00:08:47 ◼   ► Reversed my decision. I went to just see how it felt. I didn't like how it felt

00:08:50 ◼   ► Here's something interesting about the like/dislike button on YouTube. When you click the little

00:08:55 ◼   ► like button, the button goes blue from grey. And when you click the dislike button, it

00:08:59 ◼   ► goes black from grey. Wow.

00:09:01 ◼   ► Yeah, they're like, "They'll do this!" You know? It's a little Pavlovian response for

00:09:06 ◼   ► you. I was very honored to get a special thanks.

00:09:10 ◼   ► Of course. You and my girlfriend and John were the few

00:09:17 ◼   ► people that had to endure my stress, my questions and my doubts before launching.

00:09:24 ◼   ► I have seen many, many, many, many cuts of that video.

00:09:28 ◼   ► Be like, "Look at this one! We have a line change! Okay!" So off I go, watch the one

00:09:34 ◼   ► line move. But it was, it is an amazing video and I was very honored to be able to see it

00:09:42 ◼   ► in advance. But I wanted to ask you a few questions. Because look, we'll go into these

00:09:46 ◼   ► wishes we will actually revisit the wishes on the show probably in late May right yes

00:09:52 ◼   ► we'll do it as part of our what do we want to see at WWDC so there's no point going over

00:09:56 ◼   ► the wishes right now but I wanted to ask you about the video itself because obviously that

00:10:02 ◼   ► is a different method a different medium for you and Mac stories and how did you find the

00:10:08 ◼   ► YouTube system?

00:10:12 ◼   ► Well, I think I kind of cheated because I asked CGP Grey for advice before uploading

00:10:19 ◼   ► the video, so he gave me like a checklist of things to do and to make sure that I was

00:10:24 ◼   ► doing. It was fine, I think. I opened the channel the week before, so we didn't have

00:10:32 ◼   ► a YouTube channel. And before uploading this video, I just moved two of my old videos,

00:10:38 ◼   ► 30 second videos about drafts and iOS automation, just to make sure the channel wasn't empty

00:10:44 ◼   ► when it was launch day.

00:10:46 ◼   ► I uploaded a logo and I put in a bunch of links for the Mac Stories bio, linking to

00:10:53 ◼   ► Mac Stories on Twitter and the club, and then I prepared the description, which was okay,

00:10:59 ◼   ► no major issues there, and I uploaded the video.

00:11:02 ◼   ► I think I have to be thankful for my fiber connection because the video was in 4K, it

00:11:10 ◼   ► was almost a three minute video, and it was about 500 megabytes, maybe less.

00:11:17 ◼   ► That's not too bad.

00:11:18 ◼   ► No, it's not too bad, it took me like a minute.

00:11:21 ◼   ► So funny enough, you know that the videos, I don't know if you know, but I put Cortex

00:11:24 ◼   ► on YouTube.

00:11:25 ◼   ► Yeah, I do, I know.

00:11:27 ◼   ► it's just the audio file and the logo, like a version of the logo, which is in 1080p.

00:11:34 ◼   ► The videos tend to be around 2 to 3 gigabytes.

00:11:37 ◼   ► Wow.

00:11:38 ◼   ► It's nothing, right?

00:11:40 ◼   ► Just because that's just how the video comes out, because it's still a video file, which

00:11:43 ◼   ► is two hours long.

00:11:45 ◼   ► Oh yeah.

00:11:46 ◼   ► Right?

00:11:47 ◼   ► Yeah.

00:11:48 ◼   ► So that's one of the unfortunate parts about doing this is there's nothing.

00:11:51 ◼   ► But it ends up being like two hours long.

00:11:53 ◼   ► Yeah.

00:11:54 ◼   ► And I didn't really come across any issue.

00:11:56 ◼   ► I mean, the video upload is fine.

00:11:58 ◼   ► I set it to private because I just wanted to make sure

00:12:01 ◼   ► that people couldn't guess the link.

00:12:03 ◼   ► CGP told me it never happened to him

00:12:05 ◼   ► that people would guess a link for an unlisted video,

00:12:08 ◼   ► which was another option.

00:12:09 ◼   ► But I just prefer, you know, for my paranoia.

00:12:12 ◼   ► - There is something weird that like,

00:12:14 ◼   ► when I go to your video page on YouTube,

00:12:17 ◼   ► it doesn't show the iOS 10 video.

00:12:20 ◼   ► I have to go in-- - Yeah, that's kind of weird.

00:12:22 ◼   ► - Something weird has happened there.

00:12:24 ◼   ► Like you have to go to videos before it shows up.

00:12:27 ◼   ► - I know, I know.

00:12:28 ◼   ► - But whatever, it doesn't matter

00:12:29 ◼   ► because people were just finding it as being linked to,

00:12:32 ◼   ► I think you were in the YouTube trending.

00:12:34 ◼   ► - Yes, yes, and that really made up for about 20%

00:12:38 ◼   ► of the views being discovered in the YouTube trending page.

00:12:43 ◼   ► I saw a lot of people,

00:12:45 ◼   ► like I could see the effect in the real time stats.

00:12:49 ◼   ► I could see the effect of the new people

00:12:51 ◼   ► discovering the video from the trending section.

00:12:54 ◼   ► it hit the trending page when it was about 100,000 views.

00:12:59 ◼   ► So I guess the YouTube system finds kind of momentum

00:13:03 ◼   ► in videos and decides to feature them.

00:13:06 ◼   ► And it was also embedded on a bunch of other tech blogs

00:13:09 ◼   ► which helped in getting the kind of exposure.

00:13:12 ◼   ► It was on 9to5Mac, it was on The Loop.

00:13:14 ◼   ► - That was part of the reason for doing the video, right?

00:13:17 ◼   ► Surely for that, yeah.

00:13:19 ◼   ► - Yeah, because it's so easy to embed a video

00:13:22 ◼   ► and that was the whole idea.

00:13:25 ◼   ► I got a bunch of bloggers asking me,

00:13:27 ◼   ► "Can, do you mind if we embed the video?"

00:13:30 ◼   ► And I was like, "No, that was the main goal.

00:13:32 ◼   ► "Please do use the embed code."

00:13:34 ◼   ► - Right, I don't know if this is why you did this,

00:13:36 ◼   ► but here's when I look at this objectively, right?

00:13:38 ◼   ► If somebody block quotes an article, you get nothing.

00:13:42 ◼   ► Nothing happens.

00:13:45 ◼   ► It's just there.

00:13:46 ◼   ► But if they embed a YouTube video, you still get the view.

00:13:49 ◼   ► The view shows in your view count.

00:13:50 ◼   ► Now, you're not getting any money from this

00:13:52 ◼   ► you didn't put any advertising on it, which I think was the right thing to do by the way,

00:13:55 ◼   ► because of the purpose of the video. Oh yeah, you have not in the system for long enough,

00:14:00 ◼   ► but I think the purpose of the video was to promote Mac stories as well, right? Like,

00:14:07 ◼   ► the other side of this video was to promote Mac stories to new people, right?

00:14:12 ◼   ► And the club, yeah.

00:14:13 ◼   ► Yeah, and the, yeah, and club Mac stories as well, so that's kind of like, you know,

00:14:16 ◼   ► the other side of this, so that's how it brings more people in on the other side, so

00:14:21 ◼   ► So not having advertising on it would have been the right move anyway.

00:14:25 ◼   ► I think it was a very clever publishing and business move to do it this way, to create

00:14:30 ◼   ► this video which can be anywhere and it doesn't matter where it is because people would in

00:14:35 ◼   ► most cases take the video and embed it.

00:14:39 ◼   ► Pretty smart.

00:14:41 ◼   ► Yeah.

00:14:42 ◼   ► One of the comments that I got from a lot of people is that it's not an absurd concept,

00:14:49 ◼   ► that it makes sense.

00:14:50 ◼   ► hundreds of people told me it makes sense, it's not crazy, and it's the kind of features

00:14:55 ◼   ► that I could see happening, which is not usual. So I've been covering, you know, Mac Stories,

00:15:01 ◼   ► I've been writing for seven years, and every time there's a crazy concept video, it gets

00:15:05 ◼   ► a lot of exposure, but a lot of people also say, "This is crazy, Apple will never do this,

00:15:10 ◼   ► these features are totally useless." And that was one of my concerns, that people would

00:15:15 ◼   ► see the video as a sort of a crazy project, you know, with the crazy features that Apple

00:15:20 ◼   ► would never do. And as soon as I published the video, like, the reactions started coming

00:15:26 ◼   ► in that it's sensible, it makes sense, it's not crazy, and that makes me very happy. Because

00:15:32 ◼   ► we, both Sam and I, we spent a lot of time thinking what are the features that we think,

00:15:39 ◼   ► we both think make sense and what's the best way to do it in an Apple-like fashion, that

00:15:46 ◼   ► it's not too crazy with new animations or new interface designs or a different theme

00:15:52 ◼   ► for the entire iOS interface, so it really makes me happy that people see some kind of

00:15:57 ◼   ► a reason in there, some kind of "Yeah, it's not too crazy, it makes sense, I could see

00:16:02 ◼   ► this happening, good job".

00:16:03 ◼   ► That makes me happy.

00:16:04 ◼   ► Yeah, I mean, cause well, I think part of it is most of the concept videos, you only

00:16:09 ◼   ► ever find out about them because they're crazy wild things, but you already had the

00:16:14 ◼   ► ability to create a sensible one and for people to see it, which is why I think it

00:16:19 ◼   ► became popular, right?

00:16:20 ◼   ► Because you have the platform in which to get this video out to the first amount of

00:16:25 ◼   ► people that need to see it for it then to become viral.

00:16:28 ◼   ► Whereas people like Sam, who created a concept video,

00:16:33 ◼   ► he needed it to be a little bit more out there

00:16:37 ◼   ► to get people like you to find it in the first place.

00:16:40 ◼   ► Does that make sense?

00:16:41 ◼   ► - Yeah, yeah, it makes sense.

00:16:42 ◼   ► - Like if he created your video,

00:16:44 ◼   ► you'd just be kind of like, yeah, sure.

00:16:46 ◼   ► Like this is sensible stuff.

00:16:48 ◼   ► You know?

00:16:48 ◼   ► I think it depends where it's coming from.

00:16:50 ◼   ► - Yeah, I think the angle that we chose was,

00:16:54 ◼   ► so look, every year I do an iOS wishlist.

00:16:57 ◼   ► and I do it because I want to put it out there, the kind of features that I would like to see.

00:17:02 ◼   ► And this was not the kind of... the way that you come at it is not,

00:17:06 ◼   ► "Look, I'm a designer, I can make super cool stuff, this is what Apple should do on iOS."

00:17:11 ◼   ► It was, "I have these wishes, and here's how I visualize them in my mind."

00:17:18 ◼   ► And it's a very... it's not a big difference when you think about it, because the final outcome is the same,

00:17:24 ◼   ► a concept video. But the way that you approach it and the way that you present it, I think

00:17:28 ◼   ► it resonated with people. And they could see the idea of here's a person, he works on iOS,

00:17:35 ◼   ► he writes on the iPad every day, he knows iOS, he would like to see these features,

00:17:42 ◼   ► and he found a way to visualize them. And I think the end goal helped kind of get people

00:17:48 ◼   ► interested and to see, to help them see my line of thinking. So I'm very satisfied

00:17:56 ◼   ► with how everything went in the end.

00:17:59 ◼   ► Talking about very satisfied, you got a WWDC ticket?

00:18:04 ◼   ► I did, yeah. I was very lucky, Myke. Last Friday I was at the club, not club, I'm

00:18:14 ◼   ► So it's an actual club with people dancing and drinking.

00:18:17 ◼   ► And I got an email from the Apple store,

00:18:22 ◼   ► here's your receipt.

00:18:24 ◼   ► And my heart started pumping like crazy.

00:18:28 ◼   ► I was like, oh my god, oh my god.

00:18:30 ◼   ► And Sylvia was like, what's going on?

00:18:32 ◼   ► And I look at the receipt, and there's the WWDC ticket

00:18:36 ◼   ► confirmation.

00:18:37 ◼   ► And I was like totally going nuts.

00:18:39 ◼   ► And so I bought drinks.

00:18:42 ◼   ► and we celebrated the ticket.

00:18:45 ◼   ► - I'm not surprised.

00:18:46 ◼   ► So what is your plan?

00:18:47 ◼   ► - My plan is to first watch the keynote

00:18:51 ◼   ► because I've never been there and it--

00:18:54 ◼   ► - Well, you have.

00:18:55 ◼   ► Maybe not at the Grand. - Not at WWDC.

00:18:58 ◼   ► - Oh, well yeah, but you've done one.

00:19:00 ◼   ► - Yeah, I've done a keynote.

00:19:01 ◼   ► I just wanna do a WWDC keynote.

00:19:03 ◼   ► I've done a product keynote.

00:19:05 ◼   ► And I feel like it's a nice sort of celebration

00:19:08 ◼   ► to do my first WWDC keynote for iOS 10,

00:19:11 ◼   ► like a new beginning, whatever. That's how I see it in my mind.

00:19:14 ◼   ► And the other thing that I want to do is I want to attend key sessions for iOS,

00:19:20 ◼   ► because I need that kind of information and kind of networking with developers to prepare my iOS 10 review.

00:19:29 ◼   ► So last year I spent way too much time watching the videos over and over and talking to people who were there at the sessions

00:19:39 ◼   ► over email to get a better understanding of what was going on, and just talking to developers

00:19:45 ◼   ► to ask them questions.

00:19:47 ◼   ► And I feel like I can save a lot of time if I go to the key sessions that are, you know,

00:19:52 ◼   ► that are...

00:19:53 ◼   ► I mean, I have to decide which kind of sections I want to cover in my review, which we'll

00:19:57 ◼   ► talk about in the evening.

00:19:59 ◼   ► Me and you and Steve and Myke, you will have to help me.

00:20:02 ◼   ► But once I do know what kind of sections I want to have in my review, I will mark the

00:20:06 ◼   ► the sessions that I want to go to and just attend those and then talk to people and go

00:20:11 ◼   ► to the Bash and that kind of essential stuff.

00:20:13 ◼   ► I'm not interested in OS X, not interested in watchOS, I'm going there for iOS and

00:20:20 ◼   ► the key stuff that I understand that I want to cover.

00:20:23 ◼   ► And I feel like I need to wake up early, go to the key sessions and then in the afternoon

00:20:30 ◼   ► and maybe in the mornings where iOS doesn't have a key session, just have fun, because

00:20:35 ◼   ► I want to mix it up, you know, it's my first time I want to do part work, part fun, and

00:20:41 ◼   ► I feel like having fun there is important because it also helps me relax and meet new

00:20:47 ◼   ► people, which again is sort of a circle of life. I need to have fun, meet new people,

00:20:52 ◼   ► talk about work, fun, you know, it's all connected. No pun intended. So yeah, that's the plan.

00:21:02 ◼   ► what I want first watch the keynote, understand what's going on, understand the kind of sections

00:21:07 ◼   ► that I want to have in my review, talk about it with you guys, find a plan for the key

00:21:12 ◼   ► sessions that I want to go to and just attend those sessions and then have fun and meet

00:21:17 ◼   ► people.

00:21:18 ◼   ► It's a pretty great plan man, it's a pretty great plan.

00:21:20 ◼   ► Yeah, I think I can do it, you know?

00:21:22 ◼   ► Yeah, the days are quiet, the day times are quiet because so many people are in the sessions

00:21:27 ◼   ► and now of all the other conferences and stuff that go on anyway.

00:21:30 ◼   ► You just need to understand that you are going to be very very busy.

00:21:33 ◼   ► I know, I know.

00:21:34 ◼   ► Prepare for that.

00:21:36 ◼   ► I'm preparing both physically, I'm exercising a lot.

00:21:41 ◼   ► It's true.

00:21:42 ◼   ► I believe you.

00:21:44 ◼   ► There's a bunch of tasks in my to-do with daily exercises.

00:21:47 ◼   ► I saw them in a Twitter screenshot.

00:21:49 ◼   ► I saw like abs and something.

00:21:51 ◼   ► Yeah, and it's being in good shape.

00:21:53 ◼   ► So I'm ramping up the exercise routine, I'm doing the diet that I was doing last year

00:22:00 ◼   ► again. So I need to be very, very energized. Because it's gonna take a lot out of me to

00:22:10 ◼   ► do all of the stuff that I want to do. But it's possible, you know. There's worse things

00:22:15 ◼   ► in the world. This is fun. This is great. I shouldn't be concerned. Just gotta have

00:22:19 ◼   ► fun.

00:22:20 ◼   ► All right, this week's episode is brought to you by Smile and PDFPen Pro. You've heard

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00:24:03 ◼   ► out pdf pen pro requires Yosemite or later and works great on El Capitan thank you so much to

00:24:08 ◼   ► smile for their continued support of this show and relay fm all right Federico this is going to be a

00:24:16 ◼   ► a tough one my friend. Are you ready for this? Apple earnings. So what quarter was this?

00:24:26 ◼   ► This was Q2. Q2 2016. I believe, now we can talk about this and we're going to talk about

00:24:36 ◼   ► this in quite a bit of detail, but I believe that Q2 2016 is going to go down as a moment

00:24:44 ◼   ► in Apple's history in the future? Well I mean yeah it's first down quarter since

00:24:52 ◼   ► 2003 I think. So yeah definitely. For 13 years, quarter on quarter, Apple have increased their

00:25:00 ◼   ► profit and revenue and all that stuff right? It's gone everything has gone up. Quarter

00:25:06 ◼   ► on quarter for 13 years. So we're looking at if you're thinking about every time that

00:25:11 ◼   ► Apple come on to do one of these earning results.

00:25:15 ◼   ► They've had over 50 of these, they've come on

00:25:17 ◼   ► and the story's been the same.

00:25:19 ◼   ► 50 in a row, right?

00:25:20 ◼   ► Better than last time, better than last time,

00:25:22 ◼   ► better than last time.

00:25:24 ◼   ► This time not so much.

00:25:25 ◼   ► And I find this very interesting.

00:25:29 ◼   ► And I wanna just preface this conversation by saying,

00:25:31 ◼   ► Apple is not doomed, and I understand

00:25:34 ◼   ► that they made a ton of money.

00:25:36 ◼   ► - Yeah.

00:25:37 ◼   ► - But a downward trend is never a good thing.

00:25:41 ◼   ► - True.

00:25:42 ◼   ► - And that's what we're looking at now,

00:25:43 ◼   ► especially when you look at some of the areas that are down.

00:25:45 ◼   ► So profit is down, the iPhone is down, Mac is down,

00:25:50 ◼   ► and of course our friend, the iPad, is down again,

00:25:55 ◼   ► year on year.

00:25:56 ◼   ► So let's look at the iPhone a little bit.

00:25:59 ◼   ► So the iPhone sales were strongly increased

00:26:04 ◼   ► in the previous quarter because of pent up demand in China,

00:26:09 ◼   ► is my understanding. In Q1 they had lots and lots of sales for the 6S because they had

00:26:16 ◼   ► some pent up demand there. A lot of the stuff that you'll find in these earnings calls,

00:26:24 ◼   ► I'm going to put a bunch of articles and show notes, one from you, one from Jason, you guys

00:26:29 ◼   ► both do a really great job of breaking this stuff down. A lot of it is very complicated,

00:26:34 ◼   ► But basically it seems like Apple was saying that they're in a situation where the upgrade

00:26:42 ◼   ► cycle is looking pretty good on the iPhone, but the previous quarter was a bit of an anomaly,

00:26:47 ◼   ► which makes everything else kind of look a bit worse.

00:26:49 ◼   ► Is that, am I right in saying that?

00:26:50 ◼   ► It's kind of what they were saying, right?

00:26:52 ◼   ► That's my understanding too.

00:26:54 ◼   ► It's like this is better than it looks, but it looks really bad because the last time

00:26:58 ◼   ► was so good.

00:27:00 ◼   ► Yeah.

00:27:01 ◼   ► And they also said something about the SE. That the demand of the SE has been higher

00:27:07 ◼   ► than they expected. And I actually have real life experience of this as of yesterday. So

00:27:13 ◼   ► yesterday morning Adina woke up and her phone was dead. Like it's just… I have never

00:27:17 ◼   ► seen an iPhone as dead as this iPhone.

00:27:20 ◼   ► So it's the very old iPhone she was still using.

00:27:23 ◼   ► She was using a 5S, my old 5S.

00:27:25 ◼   ► Oh okay, a 5S.

00:27:26 ◼   ► Turn it on and the screen would just go blue and then it would change all different colors

00:27:30 ◼   ► and die.

00:27:31 ◼   ► - No, that's a dead iPhone.

00:27:33 ◼   ► - It's dead dead.

00:27:33 ◼   ► So she went to the Apple store to try and get an SE

00:27:36 ◼   ► and couldn't get one.

00:27:37 ◼   ► It was three weeks back ordered.

00:27:38 ◼   ► - Wow.

00:27:39 ◼   ► - So today I went and picked up a 6S for her.

00:27:42 ◼   ► She decided to go 6S.

00:27:43 ◼   ► 'Cause she really wasn't very keen on the SE

00:27:46 ◼   ► because it looked the same.

00:27:47 ◼   ► She really was like very vehemently against it

00:27:51 ◼   ► because she's had the 5S for like two years or whatever.

00:27:55 ◼   ► And she's like, "I really don't wanna pay 500 pounds

00:27:59 ◼   ► for a phone that looks exactly the same. She was very against this. So she's gone for

00:28:03 ◼   ► the success. And I get it. I understand that feeling. I totally understand it. But the

00:28:09 ◼   ► iPhone being down is a… it just looks weird, right? On the charts it just looks weird.

00:28:15 ◼   ► It looks strange because we're not used to it. But this is a question that I asked

00:28:18 ◼   ► you before we recorded the show. Is this… do you think… is this Apple's fault? Or

00:28:24 ◼   ► Or is this just a consequence of the technology world changing?

00:28:31 ◼   ► Is Apple to blame or is it like an outside force, a trend going on for any company that

00:28:37 ◼   ► Apple can do anything about?

00:28:40 ◼   ► I feel like it's got, it just has to be a bit of both.

00:28:45 ◼   ► There are trends that are changing but Apple could always do something.

00:28:52 ◼   ► I mean it's really difficult because it does seem like trends are bringing this stuff down

00:28:58 ◼   ► but none of these bad things have affected them before.

00:29:03 ◼   ► Something struck me, a comment from Tim Cook, he said, last year, no he actually said the

00:29:11 ◼   ► 6s is stronger than the upgrade cycle of the 5s but the acceleration of last year's iPhone

00:29:19 ◼   ► 6 launch, it's much much bigger than what we're seeing this year. Meaning, as an upgrade,

00:29:25 ◼   ► the 6s is doing better than from the 5 to the 5s, but it's no match for the insane sales

00:29:33 ◼   ► of the iPhone 6 last year. So why do you think that is? Is it just because the iPhone 6 was

00:29:39 ◼   ► a better phone compared to what used to be there before? Is the 6s kind of a letdown

00:29:46 ◼   ► in terms of an upgrade?

00:29:48 ◼   ► No, I don't think it's that. I just think it's because they were selling into new markets for the six.

00:29:53 ◼   ► For the first time.

00:29:54 ◼   ► For the first time. And I think it was just the thinking that it had nothing to do with the iPhone 6.

00:30:02 ◼   ► It was just the iPhone. If the iPhone 6s was out there, then the iPhone 6s would have sold that many.

00:30:10 ◼   ► It was just because they were into a new market that they weren't in before. Because look, this is the problem, right?

00:30:15 ◼   ► This is all the conversation in the previous quarterly results when Apple said that this

00:30:19 ◼   ► was going to happen.

00:30:20 ◼   ► This isn't a surprise that this happened, by the way.

00:30:23 ◼   ► If anybody wasn't following in their previous earnings report, Apple forecasted that they

00:30:28 ◼   ► would be down.

00:30:29 ◼   ► They fell within the estimate that they gave, which is also weird for them, right?

00:30:34 ◼   ► The fall within the estimate.

00:30:35 ◼   ► Usually, they exceed the estimates, but they fell within the estimate.

00:30:40 ◼   ► And I think it's purely because Apple have bumped into the amount of people in the world

00:30:46 ◼   ► that can buy their products.

00:30:48 ◼   ► It doesn't usually happen, but this is the situation that they're in.

00:30:51 ◼   ► They are in a "we are currently at the point where we have sold our products to everyone

00:30:56 ◼   ► that can buy them."

00:30:59 ◼   ► And they mentioned India as a growing market, and great, there's more people than China,

00:31:03 ◼   ► is that right?

00:31:04 ◼   ► I'm just going to say that, probably be wrong and everybody in both countries would be mad

00:31:08 ◼   ► at me, but lots and lots of people in India that they can sell to, and if the middle class

00:31:13 ◼   ► emerges in India the way it did in China, great, maybe in a couple of years' time there'll

00:31:17 ◼   ► be more phones to sell. But then all it will do is then it will just push this problem

00:31:22 ◼   ► off another few years.

00:31:25 ◼   ► Maybe that's why the stuff like the upgrade program is so important for Apple right now,

00:31:31 ◼   ► and why so many people see a lot of potential there, because having reached the kind of

00:31:36 ◼   ► ceiling, you know, all the people that you can reach that want to buy your phone, now

00:31:42 ◼   ► what you gotta do is you gotta switch gears and have those people upgrade year after year

00:31:46 ◼   ► to the latest model.

00:31:48 ◼   ► So what you end up with in that scenario is lower income, like overall, but more sustained.

00:31:55 ◼   ► Yeah, but sequential stability, I guess.

00:31:58 ◼   ► Because what it will do is it will bring it down for a period of time, but you won't see

00:32:01 ◼   ► the peaks and valleys, which is probably better from a Wall Street perspective.

00:32:08 ◼   ► Probably it's really like a subscription. I just checked by the way, there's 100 million

00:32:13 ◼   ► people difference between China and India, and India is 1.2 billion and China is 1.3

00:32:21 ◼   ► million, a billion, sorry. In terms of numbers it's not a huge difference,

00:32:27 ◼   ► I mean, Italy is not even 60 million people. Yeah, but when you're over a billion, 100

00:32:31 ◼   ► hundred million. It's give or take.

00:32:33 ◼   ► Yes, it's give or take a hundred million people. Tim Cook even said, "We see India

00:32:39 ◼   ► as China seven or ten years ago."

00:32:42 ◼   ► Exactly. This is what I'm saying. This is their next potential market, but they're

00:32:46 ◼   ► many years away from that, and all they'll be in is this problem again. They'll have

00:32:50 ◼   ► a peak where they sell into that market, then it will go down again. It won't go down

00:32:55 ◼   ► to where it is now. It will probably still be higher because it will be a new market

00:32:57 ◼   ► and sending to more people.

00:32:59 ◼   ► But all they would be doing is just having this problem again.

00:33:03 ◼   ► Like where Apple is right now,

00:33:05 ◼   ► it is not a problem for the company.

00:33:08 ◼   ► This is not a scary thing.

00:33:10 ◼   ► But what it is is a down trend.

00:33:12 ◼   ► And down trends are not good.

00:33:14 ◼   ► You just don't wanna see them, right?

00:33:16 ◼   ► Because they're forecasting the next quarter

00:33:19 ◼   ► is gonna be down on the previous year's quarter again.

00:33:22 ◼   ► So this is gonna happen again.

00:33:24 ◼   ► So the reason that I'm kind of so interested in this

00:33:28 ◼   ► and just looking at it is in the whole time

00:33:30 ◼   ► that me and you have been covering Apple,

00:33:32 ◼   ► even interested in them, this has not happened.

00:33:35 ◼   ► - It's the first time.

00:33:36 ◼   ► - This is the first time.

00:33:38 ◼   ► And next time is gonna be the second time.

00:33:42 ◼   ► So it is just a very peculiar thing.

00:33:44 ◼   ► Okay, let's take a look at this, right?

00:33:46 ◼   ► So if the iPhone is down, what, in theory,

00:33:51 ◼   ► The way that the company could, and I would assume that other people in Wall Street would

00:33:56 ◼   ► say should go against this.

00:33:58 ◼   ► If you've met the amount of people in the world that can buy your iPhone, you should

00:34:03 ◼   ► be selling more of your other products, right?

00:34:06 ◼   ► Like that is the way that very simply on paper, you would meet this problem.

00:34:10 ◼   ► Like if you've sold, if everybody has an iPhone, you then need to sell everybody an iPad, right?

00:34:16 ◼   ► Like that is in theory the way that you would beat this issue, right?

00:34:22 ◼   ► You sell them more products.

00:34:24 ◼   ► So this is where the other part of this is.

00:34:26 ◼   ► Mac is down, which is really weird.

00:34:29 ◼   ► Like that doesn't happen very often.

00:34:30 ◼   ► I think the previous quarter the Mac was down year on year, but like that's just like a

00:34:34 ◼   ► strange thing to occur.

00:34:36 ◼   ► Like why would the Mac be down?

00:34:38 ◼   ► That doesn't even make any sense.

00:34:40 ◼   ► And then iPad is down again.

00:34:43 ◼   ► So every time I mention this, and I think it's very clear now that I'm loving the

00:34:51 ◼   ► iPad.

00:34:52 ◼   ► I think in previous years people have thought that I was so harsh on this point because

00:34:57 ◼   ► I didn't like the iPad.

00:34:59 ◼   ► But you know I am now iPad forever.

00:35:02 ◼   ► And whenever I bring this stuff up people point out the fact that like they sold 10

00:35:07 ◼   ► million of them, 10 million of everything is amazing.

00:35:10 ◼   ► To me it's not the amount that's sold.

00:35:12 ◼   ► I don't care how many it is. It could be a billion or ten million. It's the fact that

00:35:17 ◼   ► it continues to decline. And the fact that the iPad sales are just going down, down,

00:35:26 ◼   ► down, it's not good because it hasn't reached the bottom.

00:35:31 ◼   ► See, I don't know. I think it's kind of… I think the iPad from a financial perspective

00:35:37 ◼   ► is kind of weird because I don't know how to kind of treat it. Is it like an iPhone?

00:35:45 ◼   ► Is it like a Mac? Because it's really none of both.

00:35:50 ◼   ► From a financial perspective you cannot compare it to either because the Mac, whilst it's

00:35:56 ◼   ► had a shaky Q2 here, has over the last few years grown. Not by a lot and it's still

00:36:04 ◼   ► half the size, but the trend is good, right? That not only are the people who currently

00:36:09 ◼   ► buy a Mac using it, there are new people buying the Mac. That's not what's happening with

00:36:15 ◼   ► the iPad, right? Like if you look at the iPad and the Mac, they're probably the closest

00:36:20 ◼   ► in comparison from a renewal cycle, right? Like, you have one and you use it for a few

00:36:27 ◼   ► years and then you buy another one when either one breaks or there is something so irresistible

00:36:32 ◼   ► that you must buy it. You'd expect that they're going to be closer like that but something's

00:36:37 ◼   ► happened with the iPad in that over time interest continues to wane.

00:36:47 ◼   ► Because what's happening is like we're like six years into this product's life cycle now

00:36:51 ◼   ► and you can look year on year at all of the quarters and you can see that it's steadily

00:36:56 ◼   ► declining. If it would have been after year one, we're at the point that we're at now

00:37:00 ◼   ► and it was right down low, you can say "oh, people buy them and they don't buy any more

00:37:05 ◼   ► of them" but what's happening is not only are, the way that I look at this is, not only

00:37:09 ◼   ► are people taking a long time to upgrade this device, there are less people making that

00:37:15 ◼   ► upgrade as time goes on because the numbers are completely unstable, they are just declining.

00:37:22 ◼   ► If there was some kind of stability in the numbers, which there isn't yet, you would

00:37:26 ◼   ► see people having a relatively frequent refresh rate like you see with the Mac. But that doesn't

00:37:32 ◼   ► happen with the iPad and that's why it concerns me and interests me because the product continues

00:37:39 ◼   ► to decline. Am I making sense here?

00:37:42 ◼   ► Yeah it makes sense and I think it's going to be a long road ahead. If Apple really believes

00:37:47 ◼   ► that the iPad is the future of their computing, you know, taking the iPhone aside for a moment,

00:37:54 ◼   ► If they really believe that the iPad is the future, it's going to be a long road to kind

00:37:57 ◼   ► of change the perception of the iPad.

00:37:59 ◼   ► Because what I don't understand is, are people buying iPads as their only computer, like

00:38:06 ◼   ► I could do, for example?

00:38:08 ◼   ► Or are people buying iPads in addition to a Mac, in addition to a PC?

00:38:14 ◼   ► Or is it just, you know, there's people buying the iPad as their only computer, which is

00:38:18 ◼   ► lasting for, I don't know, three to four years?

00:38:21 ◼   ► And what gives me... so I agree with you, I agree it's concerning, it's very clear at

00:38:27 ◼   ► this point that, you know, maybe some people, a lot of people are not interested in the

00:38:32 ◼   ► iPad.

00:38:33 ◼   ► But what gives me some hope is two things.

00:38:38 ◼   ► If people are buying iPads as their only computer, they're buying more iPads than Macs, you know?

00:38:45 ◼   ► So if I want to buy a computer, I can choose do I want to buy a Mac or do I want to buy

00:38:48 ◼   ► an iPad.

00:38:49 ◼   ► And if that's the reason, which I don't know, there's more people choosing the iPad.

00:38:54 ◼   ► Yeah, it's still twice the size.

00:38:56 ◼   ► It's still almost twice the size.

00:38:58 ◼   ► I don't know where it will stabilize, but it seems to be about twice.

00:39:04 ◼   ► But in any case, last year Apple sort of started understanding that they've been doing things

00:39:09 ◼   ► wrong with the iPad, both in the hardware and in the software, and they started to change.

00:39:16 ◼   ► with iOS 9, with the Pro, with the Pencil, with another Pro, with accessories, it tells

00:39:22 ◼   ► me that they understood, they kinda stood in a state of, you know, neglection maybe

00:39:31 ◼   ► for a couple of years. And now they're doing new things, but it's gonna take time. You

00:39:36 ◼   ► know, it's not that Apple releases iOS 9, Apple releases the first iPad Pro, boom, iPad

00:39:40 ◼   ► cells are off the roof again. And I think it's gonna take a long time for kind of change

00:39:49 ◼   ► the perception. Because what you haven't done in two years, in three years, it's gonna take

00:39:55 ◼   ► you twice as much to fix your mistakes. That's the way that I see it. So if Apple really

00:40:00 ◼   ► thinks this is the future, we're gonna make things right, it's gonna take a long time.

00:40:04 ◼   ► it's going to be a long road. Because there's still people using an iPad 2, and I can only

00:40:11 ◼   ► imagine if people who bought an iPad Pro last year are going to be using an iPad Pro in

00:40:17 ◼   ► four years. So understanding the refresh cycle, bringing more features to iOS, and kind of

00:40:25 ◼   ► bringing the pencil and the better hardware and the kind of experience of the Pro to the

00:40:32 ◼   ► more affordable iPad, it's going to take a long time.

00:40:36 ◼   ► Tim Cook made two statements about the iPad, which I want to try and see if we can look

00:40:41 ◼   ► at these from a common sense perspective to try and understand what he's saying. He said

00:40:45 ◼   ► that the June quarter, so the next quarter, we expect to see our best iPad revenue compare

00:40:52 ◼   ► in over two years. And then also said we expect seasonal sequential decline in iPad sales.

00:41:00 ◼   ► So if I'm reading this correctly, like reading between the lines, what he's saying is the

00:41:05 ◼   ► next quarter Q3, there are going to be more iPads sold than the previous quarter, but

00:41:14 ◼   ► there's going to be a seasonal decline.

00:41:16 ◼   ► So I'm very confused about how this is going to work out, but are they saying it's going

00:41:20 ◼   ► to fit somewhere between those two figures?

00:41:24 ◼   ► It's weird because if you're saying there's going to be seasonal decline, it would indicate

00:41:30 ◼   ► that there is going to be a decline from Q2 to Q3, right? But Q3 2015, there were more

00:41:40 ◼   ► iPads sold than Q2 2016. So if they're saying it's going to decline from Q2 to Q3, but

00:41:47 ◼   ► yet there's going to be a better comparison from year on year, that doesn't add up, right?

00:41:52 ◼   ► I don't know. Also the way that he phrased it…

00:41:55 ◼   ► Jason tries to break this down at six colors,

00:41:58 ◼   ► which is where I'm getting these quotes from.

00:42:01 ◼   ► And what Jason's tried to work out from this,

00:42:05 ◼   ► because he's also struggling with it as much as we are,

00:42:07 ◼   ► he says, "So I suspect Cook is really saying

00:42:10 ◼   ► "that iPad revenue will be down by single digits

00:42:13 ◼   ► "for the first time in two years,

00:42:14 ◼   ► "as opposed to double digits."

00:42:16 ◼   ► So the actual numbers sold might still be down,

00:42:21 ◼   ► but the revenue might be better,

00:42:23 ◼   ► 'cause they're probably selling the iPad

00:42:25 ◼   ► at a higher ASP than they were before.

00:42:29 ◼   ► Which if that's all it is, that's not good.

00:42:33 ◼   ► The real key I believe when I'm looking,

00:42:38 ◼   ► so this is the thing,

00:42:38 ◼   ► this is one of the main difference about us

00:42:41 ◼   ► and looking at this to the way that analysts

00:42:43 ◼   ► and Wall Street people look at this.

00:42:45 ◼   ► We look at numbers of products sold,

00:42:47 ◼   ► not the revenue generated from the products.

00:42:50 ◼   ► That's what we care about, right?

00:42:52 ◼   ► and me and Jason have spoken about this before an upgrade.

00:42:56 ◼   ► The idea being that however many product numbers are sold

00:43:01 ◼   ► says something about the direction of Apple

00:43:03 ◼   ► and its ecosystem.

00:43:04 ◼   ► If Apple made more money from the iPad

00:43:09 ◼   ► than they do from the iPhone,

00:43:10 ◼   ► and they were still selling 50 million iPhones

00:43:15 ◼   ► and 10 million iPads, but just in some random way,

00:43:17 ◼   ► they made more money from 10 million iPads,

00:43:20 ◼   ► that wouldn't change the way that we look at Apple

00:43:22 ◼   ► because there's still 50 million iPhones.

00:43:24 ◼   ► So the ecosystem is very different, right?

00:43:26 ◼   ► Are you following what I'm saying?

00:43:28 ◼   ► Like the revenue generated by product for us

00:43:32 ◼   ► is not the point here, it is the amount of that product sold

00:43:35 ◼   ► because it says something about Apple's direction

00:43:38 ◼   ► as a company, I think.

00:43:39 ◼   ► So look, whatever Tim Cook is saying,

00:43:42 ◼   ► I don't think that what he is saying

00:43:45 ◼   ► is there's gonna be 20 million sold net quarter.

00:43:47 ◼   ► - No, me neither.

00:43:50 ◼   ► I think the reason I'm struggling is looking at these numbers from a people perspective,

00:44:00 ◼   ► if you will. Like, I understand there's really complex stuff going on, and analysts do a

00:44:07 ◼   ► much better job at understanding ASP and seasonal trends, that kind of stuff. But from my simple

00:44:16 ◼   ► point of view, I wonder, what can Apple do to make things better, to make a better product

00:44:23 ◼   ► and to make more people understand the iPad? Because in the end, that's what drives sales,

00:44:28 ◼   ► making better products.

00:44:29 ◼   ► Yeah, of this product, definitely. Like the iPhone, they can't do anything, I think. There's

00:44:34 ◼   ► not really a lot they can do with the iPhone to push against.

00:44:38 ◼   ► Maybe a new design wouldn't hurt, you know?

00:44:41 ◼   ► Yeah, maybe, but I mean, I think if they're just looking on year-on-year trends and stuff,

00:44:45 ◼   ► The idea is they've just sold too many of them.

00:44:49 ◼   ► So they can't keep selling it

00:44:51 ◼   ► because they're just running out of people.

00:44:54 ◼   ► For example, if you look at Q1 2015,

00:44:56 ◼   ► that was a new design, and the larger phones,

00:44:59 ◼   ► they sold 74 million of them.

00:45:01 ◼   ► Q1, they sold 74 million again

00:45:04 ◼   ► because they had to pent up demand.

00:45:05 ◼   ► I don't think Q1 2017,

00:45:09 ◼   ► you're gonna see 74 million iPhones sold again.

00:45:12 ◼   ► I just don't think that's gonna happen

00:45:13 ◼   ► because both of those times,

00:45:17 ◼   ► the reason that they jumped those 20 million

00:45:19 ◼   ► over the Q1 2014 in my opinion,

00:45:22 ◼   ► is because there were factors of people

00:45:25 ◼   ► that hadn't bought an iPhone before for a certain reason.

00:45:28 ◼   ► And I would be very surprised

00:45:30 ◼   ► if they could do something in 2017, which is the same.

00:45:33 ◼   ► Finally, they gave larger phones

00:45:36 ◼   ► to people that wanted larger phones,

00:45:38 ◼   ► and then they were able to sell iPhones

00:45:39 ◼   ► to people that couldn't buy iPhones before.

00:45:41 ◼   ► I don't think they're gonna have that in 2017.

00:45:43 ◼   ► I just don't see what that could be.

00:45:45 ◼   ► But that's why it's not my job.

00:45:47 ◼   ► - Is it too crazy to think that eventually

00:45:50 ◼   ► the iPhone won't be on a one year cycle?

00:45:54 ◼   ► - No, I don't think that would be the case.

00:45:58 ◼   ► I would be very surprised because there are,

00:46:02 ◼   ► if typically phones are on two year cycles,

00:46:06 ◼   ► then you want it on a one year cycle

00:46:10 ◼   ► so you get people above years.

00:46:12 ◼   ► Am I making sense?

00:46:14 ◼   ► Like say you sign up for a contract at 6S,

00:46:17 ◼   ► then you won't be ready until the 7S.

00:46:21 ◼   ► So it makes sense to kind of sell them every year

00:46:25 ◼   ► because you get people every year.

00:46:27 ◼   ► - I don't know, I just wonder if this kind of constraint

00:46:31 ◼   ► of having to come up with a new phone every year,

00:46:35 ◼   ► it's sort of becoming a problem

00:46:38 ◼   ► now that the market is so saturated with so many people having an iPhone and it's so difficult

00:46:43 ◼   ► to, at this point, it's so difficult to come up with something new every year. I mean,

00:46:47 ◼   ► what you gonna do? You cannot do a new design every year.

00:46:50 ◼   ► No, but people will buy them every year though, so why not keep selling them every year? Like

00:46:54 ◼   ► me and you, we're gonna buy a new iPhone every single year and there are so many people that

00:46:58 ◼   ► do that, so why not do it?

00:46:59 ◼   ► I don't know, I guess it's just strange to me that this year, the rumors we've heard

00:47:05 ◼   ► about the iPhone 7 are so kind of strange because people are talking an iPhone design

00:47:11 ◼   ► refresh next year, so for the 7s, but if it's a design change are you going to call it the

00:47:16 ◼   ► 7s or the iPhone 8? And people are talking about the iPhone 7 being mostly similar to

00:47:21 ◼   ► the 6s, which I think, I don't know how it would resonate with people, you know?

00:47:26 ◼   ► I think this is what people said about the 5 though. That it was going to be similar

00:47:32 ◼   ► to the 4. But it was still different. It was bigger but the overall design was very similar.

00:47:39 ◼   ► I just think that that sort of stuff is second hand. I just don't take that until I see it

00:47:46 ◼   ► to be honest. Like the idea of how it's going to look the same. Because there are some people

00:47:50 ◼   ► that just think all these phones look the same anyway. Alright so I just want to go

00:47:56 ◼   ► back to looking at all of these numbers. Looking at them all in one, right? Looking at iPhone,

00:48:01 ◼   ► Mac, iPad being down, I just think there's no real spin you can put on this.

00:48:05 ◼   ► It just doesn't look good.

00:48:06 ◼   ► I don't know what you say, right?

00:48:09 ◼   ► Again, we'll go back to like, they sold tons of all these products.

00:48:13 ◼   ► They made millions and millions and millions, billions of dollars, right?

00:48:18 ◼   ► Which is fantastic.

00:48:19 ◼   ► As I say, but you look at those trends going down, the fact that you and Jason have had

00:48:23 ◼   ► to adapt your charts because you didn't have downtrend charts.

00:48:31 ◼   ► It just doesn't... it just feels weird, right?

00:48:34 ◼   ► Like, I just don't see that anybody inside of Apple is really going,

00:48:39 ◼   ► "Yeah, but we made so much..."

00:48:41 ◼   ► They don't like that this is happening, surely.

00:48:43 ◼   ► They don't want to see this.

00:48:44 ◼   ► You never want to see a downtrend in any kind of work, I think.

00:48:49 ◼   ► But, I mean, of course, the sky is not falling.

00:48:54 ◼   ► It's not a big problem for Apple right now.

00:48:57 ◼   ► of a perception problem, maybe, to have people think that Apple is in trouble. Even if they're

00:49:04 ◼   ► not really in trouble, but to have the kind of message, you know, it sort of becomes a

00:49:11 ◼   ► self-fulfilling prophecy, maybe. That's my fear, that people are going to start thinking

00:49:16 ◼   ► Apple is in trouble, maybe I shouldn't buy a phone, and people are going to buy different

00:49:20 ◼   ► phones, people are going to buy different tablets. I know it's a sort of apocalyptic

00:49:24 ◼   ► scenario maybe, but that's the biggest problem that I see is the perception of trouble, not

00:49:29 ◼   ► necessarily the trouble, which is there.

00:49:31 ◼   ► Yeah, because of the headlines, right?

00:49:32 ◼   ► Yeah.

00:49:33 ◼   ► Because the headlines are not reporting things incorrectly, they're just sensationalizing

00:49:37 ◼   ► parts of it.

00:49:38 ◼   ► Because this is different.

00:49:39 ◼   ► Usually when people, every earnings report will pick out something to try and be like,

00:49:44 ◼   ► "Apple is doomed," and it's always just rubbish.

00:49:46 ◼   ► But this time, there is stuff that you can pin on, not to say that they're doomed, but

00:49:50 ◼   ► to say that you know you can if you want to it's not as difficult to write an

00:49:55 ◼   ► Apple is in trouble story this time when they're clearly not but you can write it

00:50:00 ◼   ► because you have a chart that proves it. You have the numbers. You have the

00:50:03 ◼   ► numbers and again right Apple is predicting between 41 or 43 billion for

00:50:08 ◼   ► the next quarter which will be a decrease from the 50 billion sales in Q3

00:50:11 ◼   ► 2015. They're not doomed but this is a change. It's change and I guess

00:50:18 ◼   ► Wall Street doesn't like change for Apple in this sense?

00:50:22 ◼   ► Why would they though? I mean, I know that Apple is judged on a different scale to other

00:50:27 ◼   ► companies and the reason is because they have been like a rocket ship for the last 13 years.

00:50:34 ◼   ► So like, the reason Wall Street looks at them in the way that they do is because Apple does

00:50:38 ◼   ► things that you could never imagine from a financial perspective. So when that stops

00:50:42 ◼   ► happening, they have to be judged differently.

00:50:44 ◼   ► Yeah, maybe even rocket ships eventually have to stop to refill.

00:50:49 ◼   ► Yeah, let's be honest here, right? Let's look at this.

00:50:53 ◼   ► Apple's meteoric rise has helped everyone that cares about it, right?

00:50:58 ◼   ► So everybody at Apple has made lots of money because the stock went up so crazily,

00:51:04 ◼   ► and people like me and you have built businesses on the back of the fact that Apple has been such

00:51:09 ◼   ► an incredibly successful company. Yes.

00:51:11 ◼   ► So now that it's changing, we kind of just have to accept that, and just accept the fact that now

00:51:18 ◼   ► Wall Street is unhappy, because it's been so incredibly good for such a long time.

00:51:22 ◼   ► And I know, I think that as I'm saying all this stuff, I sound like I'm trying to spell doom and

00:51:29 ◼   ► gloom, which I'm really not attempting to do. I'm just trying to get my head around the fact that

00:51:34 ◼   ► the company that I follow so closely, and have been for such a long time, is now in a different

00:51:41 ◼   ► world to what I've seen it at before.

00:51:43 ◼   ► The side effect of that is that if this trend continues, Apple has a chance to be seen again

00:51:52 ◼   ► as the underdog, and people love underdogs, people love companies who are in trouble.

00:51:56 ◼   ► Yeah, I mean, they're not going to be in trouble, but...

00:51:59 ◼   ► The perception of trouble is just as strong, maybe.

00:52:03 ◼   ► Part of Apple's problem in this is its history.

00:52:06 ◼   ► knows they were the company that nearly went bankrupt. You know? So that's why the Apple

00:52:14 ◼   ► is doomed stories exist, because it existed once before. Like Nintendo just posted a loss.

00:52:21 ◼   ► Nobody's saying Nintendo is doomed. People are saying Nintendo is in trouble, but no

00:52:25 ◼   ► one's saying that they're going to go out of business. And Nintendo is in way worse

00:52:28 ◼   ► shape than Apple. Because Apple is one of the most profitable companies in the entire

00:52:34 ◼   ► world. But it's easy to poke at Apple and point at Apple and say that they're going

00:52:40 ◼   ► to go out of business because it happened once before.

00:52:45 ◼   ► But there are things that are up. Services and other products are up. The Apple Watch,

00:52:50 ◼   ► it falls in other products. Tim Cook said that it met expectations for the quarter and

00:52:54 ◼   ► also said, this is very interesting that he said this, that they believe that the Apple

00:52:59 ◼   ► Watch will be a seasonal product like the iPod was with a lot of holiday sales.

00:53:03 ◼   ► Yeah, it makes sense.

00:53:05 ◼   ► How is that going to factor in for the way they market and push the product?

00:53:09 ◼   ► Who knows?

00:53:10 ◼   ► But what we do know is if you were fed up of paying for things in September, well, sorry.

00:53:15 ◼   ► It's another thing to pay for every September.

00:53:17 ◼   ► Yeah, you're going to be paying a lot of money in September.

00:53:20 ◼   ► So I think one of the things that we're going to see is that the iPhone and the Apple Watch

00:53:24 ◼   ► will always be unveiled together.

00:53:27 ◼   ► And I think what that's going to do is as Apple is struggling to find new things for

00:53:31 ◼   ► the iPhone to do, they will be able to say new things that those products together do

00:53:36 ◼   ► as marketing.

00:53:37 ◼   ► Oh yeah, that's a good idea. Especially when the Apple Watch will gain independence from

00:53:44 ◼   ► the iPhone, they will be able to focus, I guess, instead of technologies to make the

00:53:50 ◼   ► watch work as an accessory, when the watch is independent from the phone, they can just

00:53:55 ◼   ► work together. They can do stuff together, they can be faster, communicate faster, do

00:53:59 ◼   ► things together with sensors and stuff. So I think we're going to see, I mean the Apple

00:54:06 ◼   ► Watch makes sense as a holiday gift. You know, I've heard from a lot of people buying Apple

00:54:11 ◼   ► Watch sport models for their families, you know, their significant others, so it makes

00:54:17 ◼   ► sense to me to have it be a seasonal kind of product. What's interesting to me is the

00:54:24 ◼   ► The App Store revenue being up 35% and the way that it said Apple Music, which is our

00:54:30 ◼   ► first subscription service, crossed 13 million paying customers.

00:54:36 ◼   ► Why do you think it said first?

00:54:38 ◼   ► Because they will do more of them.

00:54:40 ◼   ► One of the ways that you make more money is selling to your existing customer base.

00:54:47 ◼   ► They have millions, tens of millions of iPhone customers.

00:54:52 ◼   ► Sell them subscriptions.

00:54:53 ◼   ► There's gonna be other stuff, whether it's gonna be TV or apps, they'll do other subscription

00:54:59 ◼   ► services.

00:55:01 ◼   ► Because look, Apple Music, 13 million, that's pretty good, because lots of people don't

00:55:09 ◼   ► like it.

00:55:10 ◼   ► And it's in a market that Apple were really late to, and quite frankly, in a lot of ways,

00:55:14 ◼   ► they have a worse product.

00:55:17 ◼   ► But they're able to sell 13 million subscriptions because it's on the phone.

00:55:23 ◼   ► Now Apple, if they continue to go down this road, might bump up against the European Union

00:55:28 ◼   ► and this is something that they're going to need to consider because the European Union

00:55:32 ◼   ► gets very upset about things like this.

00:55:35 ◼   ► But I think that as time goes on, Apple will continue.

00:55:38 ◼   ► I mean, there's so much TV stuff that they're talking about, right?

00:55:42 ◼   ► Like I think that these shows are not going to appear in Apple Music.

00:55:46 ◼   ► They will be an Apple TV thing, but you'll be able to also watch it on iOS devices.

00:55:51 ◼   ► I believe that the subscription service that they bring out for the Apple TV will not just

00:55:56 ◼   ► be on the Apple TV.

00:55:57 ◼   ► It will be an Apple TV like they'll call it something else.

00:56:00 ◼   ► I don't know like Apple, how's it gonna call it Apple Watch?

00:56:03 ◼   ► No you can't do that.

00:56:04 ◼   ► That name's taken.

00:56:05 ◼   ► But you know like it will be like a video service.

00:56:07 ◼   ► It'll probably be Apple Video, right?

00:56:09 ◼   ► And you'll be able to watch their own unique programming and blah blah blah stuff from

00:56:15 ◼   ► Disney, you know?

00:56:17 ◼   ► The way they've done it before, they'll have some movie stuff.

00:56:19 ◼   ► I think that's where they're gonna go with this and it'll be another streaming service

00:56:23 ◼   ► for them. Because look, frankly, they need to push up the revenue and one way they can

00:56:27 ◼   ► do that is to sell things to their existing customer base. Their existing customers are

00:56:32 ◼   ► not buying iPads, so you may as well sell them things that don't cost as much to produce.

00:56:39 ◼   ► Digital things, content.

00:56:42 ◼   ► Or maybe they could sell like a fitness program, subscription, people to get in better shape.

00:56:48 ◼   ► it all. Like Weight Watchers done by Apple. Apple are looking at Amazon, right? Amazon

00:56:57 ◼   ► do all of these things. I think that's what they're looking at. They're like, Amazon has

00:57:02 ◼   ► found a way to tie a subscription service to everything. Now admittedly Amazon's is

00:57:09 ◼   ► one subscription service, which I don't think Apple will do. I think that there would be

00:57:14 ◼   ► a few different subscription services for different things, but I think that's the route

00:57:18 ◼   ► that they will probably end up taking.

00:57:21 ◼   ► I think so because you want to make money on existing customers, you know?

00:57:29 ◼   ► You want to make more money out of people who are already your customers and what's

00:57:32 ◼   ► the best way to, you know?

00:57:34 ◼   ► If they're not buying iPhones every year from you like you want them to, have them give

00:57:38 ◼   ► you a little bit of money every month, which is also the iPhone upgrade program, that's

00:57:41 ◼   ► what that's all about too, you know, we were talking about that earlier.

00:57:44 ◼   ► What I wanted to ask you, Myke, to kind of close this sort of segment, is looking at

00:57:50 ◼   ► the future.

00:57:51 ◼   ► So we've talked about the iPad, we don't know what Apple can do, there's a bunch of things

00:57:55 ◼   ► Apple can do, but I guess we'll talk about it later when we do our iOS 10 episode.

00:58:03 ◼   ► Do you think, so in addition to video subscription services, more stuff on the App Store, do

00:58:10 ◼   ► Do you think Apple is going to place their bets on VR eventually?

00:58:14 ◼   ► Could it be a nice, maybe money generator of course, but a nice complement to the iPhone

00:58:21 ◼   ► as a product, to have the iPhone become the VR machine?

00:58:28 ◼   ► I don't know.

00:58:29 ◼   ► I don't know, I'm struggling with understanding mobile VR and how that's going to work, because

00:58:36 ◼   ► the Gear VR works because it's an extra thing you put the phone into.

00:58:40 ◼   ► I can't imagine how a device could have VR without you needing to put it into something

00:58:46 ◼   ► or connect it to something.

00:58:50 ◼   ► I think that Apple are going to be late to VR unless they surprise us in the next year.

00:58:57 ◼   ► I don't see what they're going to do there but they should do something.

00:59:02 ◼   ► I also don't think that as it stands right now, VR is enough of a thing to make a big

00:59:08 ◼   ► dent.

00:59:09 ◼   ► an Apple VR product would make about as much of a dent as an Apple Watch product.

00:59:14 ◼   ► You think so?

00:59:15 ◼   ► Yeah.

00:59:16 ◼   ► Hmm.

00:59:17 ◼   ► I really think if they eventually do VR, it'll be an iPhone thing.

00:59:21 ◼   ► It'll be some kind of iPhone accessory or based on the iPhone.

00:59:25 ◼   ► Just because we've talked about this on our video game show, ReMaster, but I do believe

00:59:29 ◼   ► that eventually all VR is going to be mobile.

00:59:32 ◼   ► It's going to be the same screen that you carry around all the time.

00:59:35 ◼   ► Just because it's the right size of a screen to put in front of your eyes, and VR is going

00:59:40 ◼   ► to be based on that.

00:59:42 ◼   ► But that's years down the road, you know?

00:59:44 ◼   ► Especially with Apple, they like to wait for new technologies to take off, but I do see

00:59:50 ◼   ► VR, potentially, you know, two, three years from now, as a new kind of addition to the

00:59:56 ◼   ► iPhone.

00:59:57 ◼   ► I don't even know if three years from now it'll be called the iPhone, but I guess

01:00:01 ◼   ► so.

01:00:02 ◼   ► So that could be an idea.

01:00:04 ◼   ► But in general, I feel like... I look at these numbers, right, and it's objective. A downtrend

01:00:13 ◼   ► is happening, it's going to happen again, and it's not good news. And there's no way

01:00:17 ◼   ► to spin this positively. You could say, "Well, we're doing bad now because we've done so

01:00:24 ◼   ► much better before and it was an anomaly." But again, negative numbers are negative numbers.

01:00:29 ◼   ► There's nothing to argue about those.

01:00:31 ◼   ► But I do wonder, as I told you, is this Apple to blame?

01:00:38 ◼   ► Yes, partly.

01:00:39 ◼   ► I think Apple is to blame here.

01:00:42 ◼   ► Especially with the iPad.

01:00:43 ◼   ► And especially with the Apple Watch.

01:00:44 ◼   ► I don't know what kind of impact it's having on, you know, what meeting expectations means,

01:00:50 ◼   ► but from my perception it doesn't seem to be the kind of crazy success that the first

01:00:55 ◼   ► iPhone was.

01:00:57 ◼   ► But I do wonder, what can Apple do to make things better?

01:01:01 ◼   ► And the things that I believe Apple can do will take time, will take a long time to steer

01:01:09 ◼   ► the ship, especially with the iPad.

01:01:12 ◼   ► So I think we're in for a long period of changes, Myke.

01:01:17 ◼   ► And it's going to be, I'll tell you what, it's going to be fun to observe.

01:01:22 ◼   ► It's not fun because there's people going crazy with these negative numbers and it puts

01:01:28 ◼   ► a lot of pressure on the financial departments of Apple.

01:01:31 ◼   ► I find it interesting.

01:01:33 ◼   ► It's interesting.

01:01:34 ◼   ► It's fascinating to observe.

01:01:36 ◼   ► And I think the next couple of years really are going to be interesting with the iPhone

01:01:42 ◼   ► upgrade program expanding to more countries, with this iPhone 7 and iPhone 8 refresh, with

01:01:48 ◼   ► the new versions of Apple Watch with the iPad finding a new soul again, it's really fascinating

01:01:55 ◼   ► to observe, if only from a blogger and a podcast perspective.

01:01:58 ◼   ► If you want to catch our show notes for this week head on over to relay.fm/connected/88.

01:02:06 ◼   ► Thanks to the lovely people over at Smile with PDF Pen Pro for supporting this week's

01:02:11 ◼   ► show. If you want to find Federico online head on over to macstories.net and also check

01:02:17 ◼   ► out our podcast from Remaster that we do which is all about video games at relay.fm/remaster

01:02:23 ◼   ► and also Federico hosts a show on relay.fm about iOS productivity with Fraser Spears

01:02:30 ◼   ► and you can find that at relay.fm/canvas. You can find me online, I am @imike, I-M-Y-K-E.

01:02:37 ◼   ► Federico is @vittici, V-I-T-I-C-C-I. I host a bunch of other shows at relay.fm. You can

01:02:42 ◼   ► find them at relay.fm because there's lots of them. Thank you so much for listening to

01:02:47 ◼   ► this week's episode. Steven is at ISMH. He'll hopefully be back next week with another iMac

01:02:52 ◼   ► in hand, fresh from the plains of San Francisco, I guess, is where you'd find them. We'll be

01:02:59 ◼   ► back next time. Until then, say goodbye, Federico.

01:03:01 ◼   ► >> Allez, urchie.