The iPhone and Apple's Services Strategy

So pay up front on the more expensive phone is $149 for 24 months or $7.99 monthly. 24 x $7.99 = $191.76 (42.76 more than up front). But what for the American Express customer, buying the phone. He or she gets the Apple 2 years plus 2 years from Amex so 48 months of coverage for the original $149 vs $383.52 paid via subscription (a $234.52 savings).

Someone keeping the phone the full 60 months it receives support from Apple would pay a total of $479.40 in AppleCare+ premiums. They did get an extra year of support from Apple vs that of the American Express customer paying up front at an effective aggregate cost of (479.4−149)/12 = $27.53 per month in the final year for coverage.

The American Express customer must of course also be saving for the replacement of his or her iPhone in 48 - 60 months. Presuming he or she wants to have the cash ready if the phone dies in month 49, they must be setting aside (999 × 1.08) ÷ 48 = $22.48/month for 48 months and then can coast for the final 12 months maybe earning a little interest before buying the new phone released in September 2024.

"it is believed that game developers will receive ongoing revenue based on how much time users spend playing their games"

So it looks like they're paying advances (significant - $1-$3M) against some kind of royalty agreement based on time spent playing their game. So not a fixed cost (but perhaps not everyone gets the advances against royalties deal?)

Edit: I just looked over at the Stratechery forums and it seems like others are questioning this as well

"For it to truly be a fixed cost, the participating game developers must be commoditized. Otherwise, they will demand increased payments as Apple’s revenues go up.

That may well be the case for games, but I think it’s worth noting because Ben has repeatedly made the same claim respecting Netflix, where talent is not commoditized, and has a history of negotiating a fairly consistent share of revenue over time. There, it’s not reasonable to characterize Netflix’s costs as fixed, in the big picture. So it’s importantly to look more closely, rather than to assume that outright purchases of content translate to a long-term fixed cost structure independent of subscriber count/revenues."

Every large commercial ML system works this way. Google for years has paid people to manually score and categorize search results pages, to provide training data for ML web search systems.

It would have been better if companies were up-front about this when talking about "artificial intelligence" in their voice products, so it doesn't look like a nasty surprise.

And in the long run, everyone will benefit from some consistent regulations on ML data scoring, like HIPAA for health care (another industry where for-profit companies handle very sensitive customer data).

a) It's supposition presented (somewhat aggressively) as fact.

b) It's the same old trite "Apple is doomed" prophecy that is trotted out every time there is a product announcement.

As to your comment;

"Please don't comment about the voting on comments. It never does any good, and it makes boring reading."

Those mirrorless camera-phone things you linked look like Microsoft tablets before iPads came. Microsoft had the idea, just not the execution chops, for many many years.

It's only confirming my conviction that it is an unbelievably potent idea, that needs a few billion poured into it to do it right.

Regarding PC vs tablet vs phone - that is not what I'm thinking at all. It is not a matter of dummies wanting OSes for 7 year olds as their primary device, it's that computation will not be done on your hardware, it'll be displayed on your hardware aka pretty lcd/oled screen. Cameras are the one exception to this rule which is why I predict it'll be regular thin screens with super fast internet, and more bulky (size of current iPhones) with replaceable lens and specialized GPUs for processing raw camera input.

This is more obvious with games - instead of everyone having a 2k gaming rig, everyone will have a 200$ monitor with a fast internet connection, connecting to super-computers run by Google. It's basically Unix multi-user, except now done via 'the cloud'. That's the future - and Apple has no place in it with its 30% profit margins on hardware.

I think Apple knows it in the long term too, which is why they're slowly and awfully, getting into content aka games and tv.