Apple’s “Windows 95″ Problem

The stock pretty much always falls after Apple announce something. I assume the reasons are complex — anything new is a risk, anything old is a lower-margin version.

Historically, you cannot make any accurate predictions of Apple's success or failure based on The Market's reaction to a keynote.

That leaves the other point: "Meh". Yes, I'm sure everyone wants Apple to announce something groundbreaking and industry defining. I'm sure Apple do too.

Maybe they will again or maybe they won't. Either way I'm sure Tim Cook has a better idea of how to do it than the bloggersphere.

Keep in mind what Apple has been doing with the proceeds of its amazing cash cow:

- smart moves to economize the supply chain

- attempting to simplify/unify its various OSes.

- hinting at a lower price point future (inevitable).

- focusing on patented industrial design (lightning connector, new mac pro, etc.)

- taking away carrier margins (iMessage)

- notably ignoring "enterprise users" and focusing on making consumers happy.

In the next year or two I expect Apple to start gunning for market share. It's amazing how much Android has lagged, and Apple has decided to err on the side of profits while Android has blundered along releasing phones with 4 hour battery life and jittery screens.

Apple envisions a future in which you can seamlessly move between mobile, web (iCloud), and desktop/laptop experiences and you get the same high quality experience.

I expect Apple to push boldly into the gaming market as well as (somewhat ironically) into web or web-enabled app ecosystem.

> Apple in time will need to move away from the iPhone and iPad, as they will become a commodity.

As someone who already owns a Nexus 4 and a 1st gen Nexus 7 they are already a commodity, I bought my N4 for half what an iPhone 5 costs.

The only thing that keeps Apple even remotely price comparable on the iPhone is that people mostly buy a smart phone on contract so they see roughly the same price per month (but the carrier takes a much bigger cut with Android).

For someone old enough to just remember the 80's and the Mac vs PC wars it's like watching history repeat itself again, the completely backwards commodity platform vs the well engineered but more costly platform except this time Google is in IBM's place and they aren't doing it by accident like IBM did they know exactly what they are doing (look at the nexus line, top of the line hardware, always the newest version of the software and price that hurts other companies using Android, they risk hurting their own suppliers to drive the price of high end hardware down as rapidly as possible) the problem is that the commodity platform gained ground very very quickly and something like the Nexus 4 at 200 quid with Android 4.3 is now the equal of the iPhone 5 at 500 quid.

The next 5 years is going to be fun to watch whichever side of the divide you are on.

It's bizarre to lump Win XP in with duds like Me and Vista. Isn't XP, by most measures, an unmitigated success?

(You might not think it's great personally, but it's certainly not the case that MS has had no blockbusters since Win 95.)

I doubt the market sell off yesterday had anything to do with how well the products will sell (I'm guessing we will soon hear that it is "The best selling iPhone ever").

Rather, it is more likely to do with downward pressure on profit margins of the iPhone. Sure the plastic cover of the 5c will help, but there are still a bunch of expensive components inside.

Actually, Apple did catch a lot of these "once in a lifetime" waves. It's true they don't have a Steve Jobs, but it's also true nobody else has.

Apple stock dropping after a keynote is not uncommon. I hear this dismissal of Apple products from techies nearly every time they announce anything. It's such a common phenomena that John Gruber calls it "claim chowder". People at one time thought the iPod mini was too expensive and that nobody would want it, and they considered the iPad little more than a "big iPod touch" that sounded like a feminine hygiene product (seriously). Apple is pretty good at understanding what regular people want, and techies tend not to be so understanding. The claim that reaction to the presentation was a "collective meh" is unfounded.

I don't understand why people expect Apple to release a market-shaking new product every year and are actively disappointed and say things like 'Apple are done innovating' when it doesn't happen.

This is not how it works.

Firstly, products that go to new places take a long time to get right. Apple worked on the iPhone and iPad for years before they were released. In fact Apple started on the iPad before the iPhone.

Secondly, if there's too many changes too quickly any impact each may have is lessened. If in 2007 after releasing the iPhone Apple's management said 'Right, we've done this touch screen stuff. Let's come up with a different interface method', the iPhone (and touchscreen computing in general) would not be the force it is today.

Implications of each change need time to sink in and be explored properly.

Thirdly, it's not how Apple works. They come up with a new product category once or twice a decade and iterate on it annually year until it becomes mature.

Fourthly, who knows what else Apple's been working on over the last few years? The attitude assumes that there's nothing more going on, that some of the world's brightest people with practically unlimited resources are just watching cat videos all day.

Now Apple may well be done innovating, but for the author to say that without any actual knowledge seems hasty, and more like he's disappointed he didn't get a pony.

It used to be I bought Apple products at a premium price to be ahead of the curve in technology. For instance, Retina Screens on Phones, Thunderbolt ports, lightweight quad core notebooks. Now I find myself waiting for Apple to play catch up and release NFC on an iPhone, or HASWELL MACBOOK PROS/Retina (that I can't believe we don't have yet). The Macbook Pros used to be the first of popular laptops to use the latest processors. Now what am I paying the premium price for again?

It is very similar to the problem they faced against Windows 95 with the macintosh. Microsoft was focusing on building a commodity OS and not worried about the hardware while commodity hardware vendors were able to focus on their strengths without having to fuss to much about hardware. Apple, being so vertically integrated will probably lag behind somewhat. Its just way more complex to design end to end, even if the final product is better integrated and more "finished".

However, I am not really sure that the Android or Windows Phones are really all that more innovative. Sure they can throw in a 50 core chip and a 15" screen, but in the end there is little real differentiation between phones right now. I think apple should allow for larger screens, as my hands are larger than the average person so I can still use one hand on a Galaxy, for example.(but just barely) This is really everyones "windows 95" problem. The market is pretty mature and at this point there is only room for iterative improvement. In fact many of the latest mobile innovations seem to have frightening privacy and security concerns- mobile payments, NFC, location context are difficult to do well and securely.

> The market is telling Apple that it is not innovative enough

Which market? The smart phone market? Because I think the new iPhones will sell as well as the prior models.

Or does the author mean the 'stock market' ... which to me is more a casino than a real market.

If people buy iPhones and Apple makes truckloads of money then ... well ... fuck the stock market gamblers.

Apple's challenge is that they have been iterating by adding features to the iPod for more than a decade. Adding a phone, and touch, and software and a bigger screen have worked because they have found a way to do so profitably and at scale. They sold because they provided new kinds of uses.

But in the end, it's the electronics industry and the efficiency of supply and manufacturing pipelines is increasing faster than Apple's demand - i.e. the companies which make up the pipeline are growing their businesses beyond meeting Apple's demands and Apple's competitors are able to utilize that capacity to make their operations more efficient.

The seed change is that Apple is increasingly marketing their products on specifications rather than differences of kind. Retina was the first example of "now with more of what we already have." Adding a quad-core processor is just a faster horse not an airplane.

Since when has "the market" had any clue about innovation?

I heard that the sell off was due to the lack of a deal with China Telecom which the markets were expecting to be announced, and had already priced in.

I love how a 4 hour sell-off somehow means "the market" has uttered its final pronouncement on Apple's latest product lineup.

Why is iOS 7 being perceived as "not innovative?" If your innovations are only in software, do they not count?

has there ever been an apple product announcement that didn't cause the stock to dip immediately afterwards?

I have yet to see a "commodity" smartphone or tablet that was nearly as stable or reliable as an iOS device, didn't have the UX destroyed by manufacturer customization, and wasn't abandoned by its manufacturer and never updated again just a few months into the two-year upgrade cycle.

Has the Android ecosystem actually solved these problems yet?

"The market is telling Apple that it is not innovative enough and that its need to do much more"

The stock market might be saying that but the "people who buy phones" market seems to be pretty happy with what Apple is doing.

This has been the reaction to every iPhone announcement after the inital iPhone - "Meh, it's like the last iPhone with 2 new features". Remember the reaction to the first iPad? Yep, "Meh". These reactions are noise.

That's how marketing people think.

I care more about the closed nature of the platform. I want to change many things without having to root the device.

A more open platform in technical terms would be awesome. More peripherals, more software, more freedom.

Windows 95 problem? Did Apple make an overhyped system that was a steaming, crashing, pile? You remember: "Start me up! ... You'd make a grown man cry----y!"

I guess 95 sold, but man it was awful. I switched to Linux about 6 months earlier. The real innovation for MS was earlier in NT, but MS wasn't pushing that to consumers. Comparing iOS to Win95 just seems like a totally off comparison.

Maybe comparing iOS to XBox would be a better comparison from a tech standpoint, but I'm not sure MS made so much money from XBox. XBox grew quite a bit at first, but now seems stalled on dubious increments. That seems a better parallel for iOS to me.