Category: Silly Pundits

The teaser of Rex Crum’s piece titled Apple bulls start looking beyond the iPod caused the Macalope’s furry ears to stand up today.

Steve Jobs will need more than a phone to sustain growth

What?! Can it be that the iPhone – which, if you’ve been paying attention, you’ll note has not been announced yet – is not even enough to save our beleagered Apple?!

No, this is simply a case of teasers gone wild because, while there is some other silliness, this particular assertion is not in the piece. Teasers are often not written by the reporter but by a copy editor who may or may not have read the whole piece and may or may not have understood it. Even the lede belies the implication of the teaser.

Money managers who own shares of Apple Computer Inc. — and the Wall Street analysts who follow the company — believe firmly that Chief Executive Steve Jobs has more iPod magic up his sleeve.

And what the piece says, which is true, is that Apple will need more than the iPod to sustain growth.

Yet even those who are bullish on prospects for the technology giant say Apple’s reliance on its handheld music player to power sales and profit growth cannot sustain it forever.

Fair enough, but Crum’s just begun to display his firm grasp of the obvious.

If Jobs is out of tricks, and Apple’s sales start to slow, many of the growth-fund managers who’ve bought its stock may become sellers.

Indeed! And if Steve Jobs eat an infant on live TV, it could adversely affect the company’s share price!

Crum provides some cause to be concerned about future iPod sales, mostly due to the maturation of the market, but lays it on a little thick.

And it’s not like Apple will have the media-player market to itself.

Like it does now.

Uh, what?

Microsoft plans to spend heavily to market its new player, which it rolled out in November. While the product didn’t exactly set the world on fire at the beginning of the key holiday-shopping season — its sales through Amazon.com lagged well behind those for a half-dozen iPod models and even an iPod adapter — Microsoft has a history of tenacity and is expected to produce 10 million of the devices next year.

Two points about this:

1. “Produce” != “sell”.
2. In the last year, Apple’s sold an average of almost 10 million iPods a quarter.

“We think Microsoft will be Apple’s most formidable competitor,” said Prudential analyst Tortora, who has a neutral rating on Apple shares.

Truthfully, it remains to be seen if the Zune will be able to make much headway in 2007. With a starting price point of $250, it’s simply not in a position to take on “the iPod”, which consists of three (soon to be four?) separate lines, starting at $80.

But ask the Macalope again when the Zune 2.0 comes out.

Tortora, apparently, is not one of the bulls mentioned in the title. It does seems a bit odd that in a piece ostensibly about bulls, the first two quotes from analysts are rather bearish. It’s not like the bullish opinions on Apple should be hard to find. The Macalope took a look and of the last 21 firms to change their rating or initiate coverage on Apple, 17 have above-average recommendations and four are neutral.

Several analysts have already noted their expectations that iPod sales will be strong this quarter and may even beat the prior year, which was really, really big.

Crum’s point, muddled by some silliness, is about growth. Apple’s been a Wall Street darling of late because of it and it might be concerning to you if you lived in a cave and hadn’t heard anything about what Apple might have on the drawing boards for 2007. But between the iTV and rumors of the iPhone, the “true” video iPod, a lightweight laptop and a tablet device, there’s little reason for growth-fund managers to start selling Apple now.

Note: the title is the punch line from an old joke about what Adam said to Eve.

Disclaimer: the Macalope holds an insignificant number of Apple shares.

Others have opined about the general silliness of how sure everyone is that Apple will be announcing an iPhone. And an iPhone 2. And an iPhone mini. And an iPhone nano. And…

Well, CNET’s Michael Kanellos has lowered the stupid bar so low that the Macalope is doubtful anyone will be able to limbo under it.

Not only will Apple announce an iPhone, Kanellos says, but he knows it will fail.

This is like the flip-side of Tuesday’s Crazy Apple Rumor. Sadly for Mr. Moltz, the Apple rumor world has become self-parodying.

Michael Kanellos is not psychic. He’s not a time traveller. He’s not able to bend reality to his will. So, what he’s saying is that he thinks he’s considered all the possible alternative entrants that Apple could make to the cell phone market and he’s determined that none of them will work.

Oh, and it’s his birthday and as a little present to himself he wants to “antagonize Apple fans.”

Well, at least we know where we stand.

Mike, just a hunch, but did you get your ass kicked a lot in high school?

If Apple got into medical devices, people would come out of Steve Jobs’ speech proclaiming “The iBag is the easiest, most user-friendly colostomy device I’ve ever encountered.”

Ha-ha! Those silly Apple fans and the way they value ease of use! It’s so funny! Ah, Apple fans! Will you never learn?

Sales for the phone will skyrocket initially. However, things will calm down, and the Apple phone will take its place on the shelves with the random video cameras, cell phones, wireless routers and other would-be hits.

Can we dissect, for a second, how little sense that makes? If the iPhone is going to be a flop, chances are it’s going to be a flop from the get-go. People are either going to buy into the proposition – unlocked GSM, Apple’s own service, VOIP, whatever it is – or they’re not. It’s not like they’re going to rush out and buy one, get it home and suddenly realize they have to swap SIM cards or something and start posting angry missives on the Internet causing others not to buy one.

Unless Apple makes wild promises about it that it can’t deliver on (and so far the only ones making wild promises are Apple analysts), sales are unlikely to “skyrocket” but ultimately amount to not much.

Remember the Mac Mini? It was supposed to ignite a revolution for small computers.

It was? Who said that?

Oh, some other jackass at CNET.

It didn’t. The flat-panel iMac? Some predicted that Apple’s price tag would drive other prices higher. Whoops.

That’s it? That’s Kanellos’ list of Apple trend-setting failures?

Because if it is, that is awesome. Both of those products are quite successful and – just because they didn’t live up to the hype his own publication attempted to create – it doesn’t mean they’re “would-be hits.”

He could have listed the Newton. He could have listed OpenDoc. It’s not like Apple’s never had a much-hyped technology fail before. But he just doesn’t seem to be trying that hard. Well, it’s his birthday and maybe CNET has a policy where you can phone in a column on your birthday.

But the iPod looks like it may turn out to be a non-repeatable experience. Look at the historical record. When the iPod emerged in late 2001, it solved some major problems with MP3 players.

…

Unfortunately for Apple, problems like that don’t exist in the handset business. Cell phones aren’t clunky, inadequate devices. Instead, they are pretty good. Really good.

Well, now, there’s the rub. You’ll get a whole range of opinion on this but, in general, the devices themselves aren’t that bad. The Macalope’s more inclined to stop at “pretty good” than “really good”, but the hardware’s not the main problem. It’s the interfaces that are tied to service providers that suck so badly.

It’s ridiculous that the Macalope has to point out the linear nature of time, but it remains to be seen if Apple has a solution to this problem that will work with multiple carriers.

Kanellos notes that users conflate their satisfaction with their phone to the capabilities of their carrier’s network. And, unless Apple’s been secretly constructing their own network, this will always be an integral piece of the user experience the company won’t own. But, still, it’s a problem faced by all hardware manufacturers.

The issue Kanellos doesn’t mention at all is support. When a user has a problem now, he or she calls the cellular provider who sold or gave them the phone. The service and the hardware is supported by one entity. If Apple does go the unlocked GSM route, are customers going to be able to diagnose whether their problem is hardware or network related? Will they know who to call?

But Kanellos has got a rash that says “Apple is style over substance” and he’s gonna scratch it no matter what the doctor said!

Apple, in other words, won’t be competing against rather doltish, unstylish companies like the old Compaq.

Uh, wait, are we talking about computers now? The Macalope thought we were talking about the iPod, where Apple competed – not against Compaq – but against Rio, Sony, Creative, etc.

Kanellos believes the iPod succeeded because Apple chose to use 1.8-inch hard drives and made it easier to use than the competition. However, because he’s unable to see how Apple might be able to leverage new hardware and ease of use again, he declares that the iPhone will be a failure.

The phone the company hasn’t announced yet.

That phone.

Granted, Apple will use contract manufacturers to assemble their phones, but designing these phones takes experience and talent. And the cell carriers are far deeper into it here.

Mmm, yes. Creating a cell phone is a special kind of alchemy that only fifth level druid mages with plus five hit points can perform.

There’s really not much point in going through this exercise. Kanellos has already admitted that the point of the piece is to be contrarian, which absolves him of any responsibility to actually make sense.

But someone should really throw a bucket of cold water on the whole collection of silly pundits who already think they know what the iPhone’s whole product life cycle will look like.

Because the Macalope doesn’t know if you’ve noticed, but…

Apple hasn’t announced an iPhone yet.

Silicon.com’s Jo Best just can’t come up with a convincing argument why an iPhone wouldn’t be cool.

But it doesn’t stop her from trying.

My iPod needs charging every day to play music for an hour or two.

Ah, yes, the Macalope has that same model. It looks like this.

Apple’s DRM is, well, awful.

When discussing Apple’s DRM, it is only really useful to compare its implimentation to anyone else’s. It is not useful to compare it to no DRM. It is self-evident that any DRM will be inherently worse than no DRM.

Because, honestly, the worst you can say about Apple’s DRM is that it’s at least as good as anyone else’s. Most people would argue that it’s better.

I’ve spent hours of my life convincing iTunes I should be allowed to play songs I either ripped from lawfully bought CDs or purchased from Apple itself on my laptop or my iPod.

Hours? To play songs you ripped? Then you are doing something seriously, drastically, idiotically wrong and need to seek professional help immediately.

Get thee to a Genius Bar.

I know Apple isn’t stupid and probably won’t put copy protection on my PIM-type content but I do not trust them in this area and would inspect closely their DRM policy on the iPhone before considering a purchase.

Sooo, you don’t fear that Apple will try to copy-protect your contacts, but somehow you don’t trust them… not to copy-protect your contacts? Wha-huh? You should really sort out your stand on these issues before you sit down and just start typing willy-nilly.

But I’ve got an iPod and a mobile and it hasn’t bothered me yet, despite the plethora of phones with built-in music players flooding the market.

The Macalope is in agreement here. His original shuffle probably has about as many songs as an iPhone would be likely to have, hardly takes up any extra space and acts as a USB drive to boot (well, not to boot… er… well, you know what the Macalope means).

Best then goes on to say what she likes about Apple products and why an iPhone might really be cool, but ultimately concludes she wants Apple to partner with Nokia on a phone that…

… take a deep breath…

…runs a mobile version of OS X.

Jo, dear, you haven’t been in Jason O’Grady’s meds, have you?

Much of Best’s piece is quite reasonable, which is what makes the conclusion so dunderheaded. It is an absurd truism that workers in the “marketplace of ideas” frequently feel the need to provide a contrarian opinion just for the sake of it.

“Hmm. No one has said that puppies and kittens are a blight upon our society. Quick! To the keyboard!”

Possibly they do it because it drives hits from, well, sites like this.

But is that the kind of business you want to be in?