Here’s John Gruber commenting on Shira Ovide’s piece in Bloomberg:

Shira Ovide, writing for Bloomberg:

Here’s what Cook didn’t say: 1) Apple has been misjudging its own business, and that makes it tough to believe what executives say; and 2) The company failed to prepare investors for an inevitable slowdown in growth — even if that slowdown proves temporary. If one duty of public company executives is to under-promise and over-deliver, Apple has flopped in that job.

This is fair and astute criticism of Cook and Apple’s executive team. The problem isn’t the drop in iPhone sales so much as forecasting them accurately.

1. Apple’s guidance has been right, almost hitting directly in the middle, quarter after quarter;
2. Since the iPhone, Apple’s brand is predicated on record numbers and staggering innovation: neither Wall Street nor the blogosphere would have been satisfied with “don’t get excited about this quarter” messaging, and that’s quite the catch-22.

If you’re a publicly traded company on today’s Wall Street, you’re going to need to cater to an audience I somewhat disparagingly call “growth nerds.” These are investors that know the signs of a business that is on a better-than-linear revenue trajectory, and will throw their money at you if you can show them that. There’s nothing wrong with this, it’s just the nature of speculation.

There’s another audience on Wall Street, people an organizations that are looking for long-term, slow growth, or reliable dividends. I’ve heard this called “blue chip” or “value stocks”, and these tend to be big, established corporations. Tech companies today are in a unique place: there’s still a lot of growth and instability in companies like Twitter and Uber, but there’s also a lot of stable, value stocks like Oracle and Google. Where I’m going with this is the obsession with “peak iPhone.” Here’s John Gruber on the topic:

[G]iven that you can almost draw a straight line connecting the other four points in the chart, I’m not willing to call it a peak yet. But even if we see a return to growth, it might take several years before we see another Q2 with over 60 million units sold.

I’m a developer that works on Apple platforms and I don’t care if Apple grows in the sense of number of units sold or average selling price or any of those revenue-based growth metrics. If you want to bet on quarter over quarter growth, Android and the web are better for that, at least in part because of Apple’s average selling price. Apple doesn’t need to grow their phone business in my opinion, they need to keep their phones the best in the industry so that users of their products remain engaged. If you want a compelling reason to believe that Apple is a better value stock (and by corollary a safer technological bet) than Google in the long run, look at the metrics around user engagement and purchases within apps. (These metrics are a couple years old, if you find more up-to-date numbers please share them).

Overall, Google Play continues to post huge global download gains and command 60% higher than iOS App Store downloads in Q3 2014. […] In Q3 2014, iOS App Store’s revenue was around 60% higher than Google Play’s.

Creating value for shareholders by developing great products and services that enrich people’s lives will always be our top priority and the key factor driving our investment and capital allocation decisions.

Namely, that the one “top” priority is creating value for shareholders by creating value for consumers. Of course, creating value for shareholders is often at odds with creating value for consumers in the short term. And while it’s somewhat cliche to say this, but I do get a sense of ethical upstandingness and authenticity from Tim Cook. Considering Apple and Wall Street’s increasingly divergent goals, I recommend considering Chuq Von Rospach‘s recent hypothesis:

Apple announced its dividend and stock buyback programs about 3 years ago. In that time, the number of shares outstanding for the company has dropped almost 15%. That’s a much bigger number than I expected to find.

And that got me thinking… What if Apple has decided to buy a company? But rather than go out and buy a company where integration with Apple’s technology and culture might create their own set of problems, what if Apple decided to buy itself back from Wall Street? What if Apple is planning to go private?

Highly speculative, which is exactly the type of behavior that got Apple here in the first place.

Katie Floyd posts excellent week-in-reviews posts, and I thought I’d offer my thoughts on some of those headlines.

Apple introduced an update to the MacBook Line. The update includes faster processors, longer battery life and a new Rose Gold option.

The MacBook, historically, has been a product which has lower-end hardware and broader appeal than the Pro variant. These MacBooks seem to make a different set of compromises, where the hardware is still lower-end but the price is not, and it’s viscerally appealing (to me and I presume others) but it’s not so broad because of the single USB-C port. I’ve seen a couple in the wild, so I presume they’re popular.

That new MacBook Pro (and hopefully a Retina External Cinema Display) that I’ve been longing for might just be announced at WWDC. Apple has announced the World Wide Developers Conference will kick off June 13th in San Francisco.

It’s difficult not to think about it, but I’ve prepared my bank account for purchasing a refreshed MacBook Pro for 6 months now, so I’m trying to go into this WWDC without any expectations. But I assure Apple executives my bank account is ready for a MacBook Pro!

With regards to WWDC, I haven’t received word about my ticket status yet so I hope they’re are still tickets to be had!

Last week the iTunes Movies and iBooks store suddenly went dark in China.

China and Apple must have such a complicated relationship. China wants to keep Apple’s manufacturing in China, but likely resents an American company putting a camera, microphone, and Internet-connected device into Chinese people’s lives. Similarly, Apple saves a lot of money manufacturing in China and makes a lot of money selling their devices there, but likely resents the privacy compromises it has to make to do business there and the control the Chinese government retain over Apple’s business there.

In legal news this week, the Justice Department has dropped its New York case against Apple in an effort to obtain a passcode for an iPhone 5s. … This news comes on the heals of a report that the FBI paid in excess of $1 million for the hack that was used to access the San Bernardino shooter’s iPhone 5c.

This is a PR battle that I’m pleased Apple to have won. The Feds and government officials must be so embarrassed to have learned nothing from the San Bernardino iPhone, and Apple have been schooling them on the facts about encryption. I’ve been so accustomed to government getting what they want that it’s almost unusual to be happy with this result.

MacRumors:

During the hearing today, which was entitled “Deciphering the Debate Over Encryption: Industry and Law Enforcement Perspectives,” Apple’s General Counsel Bruce Sewell continued to defend the need for strong user encryption. He also clarified, however, that Apple has refused requests from China for source code.

Can we compromise and make it open source?

More seriously, this is more evidence that Apple is taking the moral high road (never mind the functional high ground) instead of seeking publicity.

I’ve been speculating for some time that the Macs were due a refresh. Admittedly, I’ve had my trigger finger ready to move on a new Apple notebook for 6 months or so. When The rumor mill saw Best Buy pull the MacBooks from their shelves, I thought maybe something was coming! From Apple this morning:

“MacBook is the thinnest and lightest Mac we have ever made and it’s our vision for the future of the notebook,” said Philip Schiller, Apple’s senior vice president of Worldwide Marketing. “Customers are going to love this update to MacBook, with the latest processors, faster graphics, faster flash storage, longer battery life and a beautiful rose gold finish.”

Not quite what I’m on the market for in a professional notebook, but Schiller is absolutely right that those notebooks are beautiful. I bet the rose gold will be a hit. Here are some facts for nerds from MacStories:

The MacBook now comes with the sixth-generation dual-core Intel Core M processors that go up to 1.3GHz, with Turbo Boost speeds up to 3.1GHz. It also now comes with faster PCIe-based flash storage and faster 1866MHz memory.

These are luxury consumer-grade notebooks, because they’re expensive, undeniably thin, and equally undeniably underpowered considering other (admittedly bigger) options. I hope that the MacBook Pro update retains this aesthetic (including the color options!) but offers a state-of-the-art graphics card.

Fingers crossed for WWDC!

If you submit your app to the App Store, Apple can do what they want with it. Will they approve it? Maybe, if you follow the rules. Will they promote it? Maybe, if you adopt the latest technologies, but probably not. Will you be removed from the store when you try to submit an update? Maybe, if your reviewer is in a bad mood. Here’s John Vorhees of MacStories on this issue:

I don’t know a developer who hasn’t had a run-in with App Review and wondered, ‘Maybe this is it. This is where my my app dies.’ That may sound a little dramatic, but read the results of Graham Spencer’s poll of developers– the feeling is real.

I can imagine that some at Apple may roll their eyes at this as an overreaction, or be a little offended at the implied lack of trust, but step into developers’ shoes. In the absence of meaningful communication by Apple of its intentions, it’s stories like the Reddit client take-downs that shape developers’ behavior. And as Federico noted, it’s not like this is an isolated story, it’s one of a long string of similar stories that make developers jumpy.

I was recently at a developer meet-up where the speaker was talking about external dependancies, like third-party libraries and services, like Parse or Facebook. The audience figuratively nodded in easy approval. But when this transitioned to “Who here trusts Apple?” and the claim that “Apple is our biggest dependency”, the uneasiness was palpable.

The App Store is not open-source or ruled by public committee: it is Apple’s. By and large, they do any excellent job in moderating quality and exercise fairness in enforcing the rules. But as with all rule enforcement, it can’t be done perfectly. If you want fair and equal, you should make your app open-source. If you want to charge money, Apple are taking their cut. And this is fair, considering their investment and effort in creating the platform.

But it would be nice to get paid upgrades and a Mac App Store that works.

Ever since Big Money came to the App Store, it’s become harder and harder for independent developers to make a living selling software there, and I believe this should concern Apple. Here’s Craig Grannell from Revert to Saved:

Given that Apple doesn’t comment on rumours, take Bloomberg’s story Apple Pursues New Search Features for a Crowded App Store with a pinch of salt. The claim is that Apple has

constructed a secret team to explore changes to the App Store, including a new strategy for charging developers to have their apps more prominently displayed

For me, the key paragraph in the story is this:

If Apple goes through with the idea, “it’s going to be huge,” said Krishna Subramanian, the co-founder of Captiv8, which helps brands market using social media. “Anything that you can do to help drive more awareness to your app, to get organic downloads, is critical.”

Subramanian is right in one sense: if Apple does this, it will be huge. It’ll be huge in eradicating any sense that the App Store is a meritocracy when it comes to app visibility.

I doubt this is true, because I don’t understand this move at all. Apple makes their biggest margins on selling their hardware, and any potential revenue from App Store pay-to-play will be dwarfed by profits from their products. The App Store needs some work done on discovery, but it’s not to make discovery less egalitarian towards Big Money.

The hardest part of launching and running a platform is convincing developers to create things for it. It’s a classic marketplace problem, and the more you have one the more you get the other, and the entire system becomes more valuable for each member. Part of what kept the Mac alive in Apple’s troubled 90s was the market for indie, professional, and often design-orientated applications. Keep this in mind when reading these from Michael Tsai’s blog:

Mayur Dhaka:

According to the study, the top 5 categories where money is being spent are, in order: Games, Music, Social Networking, Entertainment and Lifestyle.

[…]

I, like Michael, would love for indie developers (at least the one who make productivity apps and the like) to see their apps climb the charts too. But an excellently designed calendar app just doesn’t make enough users feel the same way as winning a game against a friend. So when it comes time to choose between spending $5 on a better calendaring system or spending those five dollars in beating a friend at a game, which developer you think is buying themselves a coffee that evening?

See also: Jim Dalrymple, who talks about what he sees being promoted in the App Store.

It does worry me that what is at best trivia and at worst gambling is so foundational to the marketplace of the platform I develop on. While professional, productivity, and utility applications aren’t #1, I get the impression its still a huge market. Stranger still, the recent Game Center white-screen bugs seem to indicate that Apple’s incentives haven’t particularly swayed to providing to the needs of game developers, but the amount of new graphics APIs recently somewhat counter this. While worrying, this is likely more an expression of our (iOS users) own values over-and-above the values of iOS as a platform. So support indie apps!

After a fierce public debate, the U.S. government has dropped it’s court order and court case to compel Apple to create a new version of iOS to access a phone. Here’s Bloomberg:

The U.S. said it has gained access to the data on the iPhone used by a terrorist and no longer needs Apple Inc.’s assistance, marking an end to a legal clash that was poised to redraw boundaries between personal privacy and national security in the mobile Internet age.

It’s the nature of government abuse of power that these debates are never “won” with any permanence, but when a power like this is ceded, it is never returned. So while I hesitate to call this a victory, I’m certainly pleased with the result.

The U.S. government continues to do the right thing after all other options have been ruled out.

Users of older iOS devices were experiencing issues updating to iOS 9.3, but Apple have fixed this, as MacStories reports:

As reported by MacRumors, Apple released an update to iOS 9.3 (build 13E237) a short time ago that addresses the activation problem on older devices. With the new build of iOS 9.3, people with older devices who didn’t previously update to version 9.3 should be able to do so now via an over-the-air update.

I used to think that only the paranoid wait to upgrade, but now I’m either paranoid or realize the wisdom in waiting.

Apple have appointed a security VP one day ahead of their next product launch, here’s Fortune via Jim Dalrymple:

Apple appointed George Stathakopoulos, formerly vice president of information security at Amazon.com and before that Microsoft’s general manager of product security, to be vice president of corporate information security, the people said.

I was curious about him, so I searched his name in Google and it yielded his LinkedIn, with this self-description:

Vice President of Amazon Information Security and Corporate IT responsible for the programs that protect Amazon and its customers, as well as directing the company’s IT infrastructure and other technology resources.

Prior to joining Amazon, George led Microsoft’s global Microsoft Security Response Center and Global Security Strategy & Diplomacy teams responsible for proactively detecting and responding to threats, and partnering with governments on technical and policy security issues.

I’m would speculate that this hire is two-part, where (1) it’s pre-emptive against the chance of needed to logistically manage GovtOS; and (2) looking into how iCloud Backups and similar services aren’t presently end-to-end encrypted.

In the ongoing fight between the federal government and the world’s most valuable company, a previously quiet voice emerges: the engineers at ground. The New York Times reports (via John Gruber):

Apple employees are already discussing what they will do if ordered to help law enforcement authorities. Some say they may balk at the work, while others may even quit their high-paying jobs rather than undermine the security of the software they have already created, according to more than a half-dozen current and former Apple employees.

I knew this was going to come up when I first covered it a couple weeks ago. Here’s John Gruber’s comment:

… [M]any, if not most, security engineers at Apple would quit rather than comply with this order — and they’d have no difficulty finding jobs elsewhere in the Valley in today’s market.

The problem with this is that if not them then who? This is a task that must be placed in the most trustworthy hands, and Apple might be compelled to find someone to do it. The alternative to Apple building GovtOS is the government building GovtOS, and I know who I’d pick. But perhaps expressing the desire to quit is good: it reinforces that this is an undue burden on Apple, as it would hamper their ability to retain top talent in a competitive hiring market.

How can I turn my idea into a business? This question underlies the recent discussion in the Apple blogosphere with regards to indie developers on the App Store. Some apps are developed out of love, some apps are developed accidentally, some for fun … there are many motivations. But the grand unifying motivation for everything is usually money, and developers that want to go indie or are indie have some issues with the way that Apple runs the App Store. What underlies this is that the only thing you can trust a rational agent to do is what’s in their interest, in many instances “in their interest” translates to “earns them money”, and I’ll show how this plays out with the App Store.

But first, before I seem like an apologist, there are some undeniable problems, and not just for developers; for instance: the Mac App Store is bad. It takes a long time to load, it requires restarting your computer because of certificates occasionally, and it’s hard to find apps. The search-ability problem is especially bad on iOS, where I usually rely on a Google search to take me to an App Store page, probably infuriating both companies.

The iOS indie scene

But even given this, and maybe in part because these problems have kept some developers from joining at all, the Mac’s indie software scene has been and still is pretty good: anecdotally, I love Sketch and Omnigraffle and Sublime Text and many more indie Mac apps. But iOS’s indie scene doesn’t quite live up to that. Here’s Rene Ritchie on the “popification” of apps on the App Store:

Day in, day out, some gamers drop tens or hundreds or even thousands of dollars on in-app consumables so they can feed their need for instant and ego gratification by clashing clans, crushing candy, and going Hollywood. Likewise, enterprise and individuals sign up for software-as-a-service that they also use on iOS.

There’s still ungodly amounts of money to be made in the App Store, it’s just not the same money or made in the same way as it used to be.

The article’s point is largely that the big players and apps we (power users, or akin) don’t care about (namely pay-to-play games) make all the money on the iOS App Store, de-incentivising more niche productivity apps. I think this is true but not necessarily surprising and perhaps not bad.

The reason it’s true is, well, simply look at the “top grossing” apps in your App Store: for me it’s Candy Crush, 3 different versions of Clash of Clans, Spotify, and Pandora. Almost by definition, no indie productivity app is going to find itself there, but this little slice is a brush stroke in a big picture: major studios and multinational corporations make most the money on the iOS App Store.

It’s not surprising because the iOS App Store has always been this way: if you were on the App Store on day one, things weren’t necessarily different, it’s that you got some free marketing. Because that’s what it takes to be big on the App Store: marketing. Anecdotally, I’ve seen many more advertisements for Clash of Clans than any other app. What we have today is the App Store from day one, just with many more titan’s shipping their app and clogging up the attention that would be paid to indies back on day one. With more apps, more marketing is required, and you cannot rely on Apple for your marketing anymore.

Acting in their own interest

The reason this isn’t necessarily bad is that I think this means Apple is doing something right: I’ve heard stories around the campfire that back in the day, apps were hard to come by on the Mac. There were RSS readers and task lists, but not necessarily a word processor or internet browser. But today on the App Store, Mac or iOS, there are probably 12 of each of those categories. And while we can have a discussion about quality, that signals to me that there’s something right. Chuq Von Rospach makes this point in response to Rene Ritchie:

I don’t think the App Stores are broken; I think they’re doing exactly what Apple wants them to, because Apple’s interest is in supporting the corporate app developers and the larger studio developers. They care about the NetFlix app and Adobe’s applications and what Gameloft is doing, not about what the small indie developers want or need.

Perhaps it used to be in Apple’s interest to get lone developers to develop on their platform, creating a grassroots campaign for Mac software, but it increasingly seems that this is no longer the case. Perhaps this is the reason for the change in tone of the App Store? However, I think Chuq misses something crucial that Rene’s piece shows: people interested in indie apps are vocal and drive the platform forward. It’s great for Apple when Federico posts about how he’s converted his workflow to be all-iPad, and indie apps are what enable that. I think Apple should care about indies.

What could be different?

And even if Chuq is right, I think Apple can care about indies. The goals of allowing indie developers to make money and allowing multinationals to make money aren’t mutually exclusive, though one does make the other harder. Here’s Brent Simmons on what he thinks Apple can do to help indies, and not that I don’t think corporate clients would complain about any of these provisions:

And indies would do better than they are right now — possibly much better — if the App Store had trial versions, upgrade pricing, and a faster and better review process. (And the Mac App Store should make sandboxing either less onerous or, preferably, optional.) (And — since I’m listing the ponies I want — it would help if Apple took something like 10% rather than 30%.)

And given that Phil Schiller was recently given control of the App Store, I wouldn’t be surprised in the event on March 21st had some news about the App Stores. But in many ways, the state of indie development is better than it’s ever been: it’s easier to build and ship an application than it’s ever been. But with this comes some changes: there are more apps, so the expectation of quality is higher and price is lower, and these, and other platform realities, are just the various factors you have to consider when you’re trying to act in your own interest.

Marc Gurman of 9to5Mac speculates:

Apple yesterday officially sent invites to its much-anticipated event to be held at its Cupertino campus with the tagline “Let us loop you in.” The event, which was originally internally scheduled for a week earlier, will focus on Apple’s new 4-inch iPhone SE, a smaller, 9.7-inch iPad Pro, and new Apple Watch bands.

No new MacBooks? But please.

The FBI have made the point that Apple should comply with the order because they’ve apparently done something similar in China:

If Apple can provide data from thousands of iPhones and Apple users to China and other countries, it can comply with the AWA in America.

I read this as:

Hey! No fair! Other governments get to trample their citizens rights and so should we!

The argument should be instead that maybe if an authoritarian government insists on Apple’s subjugating users that this behavior has no place in the land of the free and the home of the brave.

There’s a lot of buzz regarding Apple’s upcoming March 21st event, in particular about an expected smaller iPhone. Dan Moren writes for Macworld:

To me, the iPhone SE is an important move for Apple because, like the larger-sized Plus models before it, it indicates that Apple has passed the idea that the iPhone is a monolithic, one-size-fits-all device. And while I don’t think that the addition of the SE to the lineup will send iPhones sales back into the stratosphere any more than the iPad Pro did for sales of the tablet line, I do think that it adds another leg to hold up the stool that is the iPhone platform.

This is another hallmark characteristic of Tim Cook (along with being a stalwart on privacy, of course), that all of Apple’s core products have versions that are bigger and smaller: iPhone SE, iPhone 6s, iPhone 6s Plus; iPad Mini, iPad Air, iPad Pro; MacBook, MacBook Air, MacBook Pro Retina 13 & 15 … I rather appreciate the degree of choice, but there is a mystique with the “any color as long as it’s black” strategy. I think, uncontroversially, that the supposed iPhone SE will be great, it won’t transform Apple and the way we think about computers, and it won’t be a flop, but it’s no iPhone, if you know what I mean.

Chris Welch of The Verge reports:

As Apple and the FBI head to another hearing on the San Bernardino iPhone case, both sides are growing more aggressive — and the exchange is quickly turning negative. Hours ago, federal prosecutors filed a motion that said “Apple’s rhetoric is not only false, but also corrosive of the very institutions that are best able to safeguard our liberty and our rights.” The government also pushed back against Apple’s concerns over the “backdoor” to iPhone making its way to the wrong hands. “Far from being a master key, the software simply disarms a booby trap affixed to one door.” Well, Apple isn’t very pleased with the government’s latest filing.

The company just held a conference call with members of the press, describing the prosecution’s motion as a “cheap shot” brief that takes away from the debate over consumer privacy and encryption’s role in preserving it. But Bruce Sewell, Apple’s general counsel and SVP of legal, had harsher words still. He accused the government of trying to “vilify Apple” on unsubstantiated theories.

Earlier today, Russel Brandom of The Verge reported:

Apple just pulled off a major scheduling coup. After months of rumors, the company announced today that its next product keynote will come on March 21st, just one day before the company defends itself against government efforts to break security on a phone linked to the San Bernardino attacks.

We’re absolutely going to see this issue mentioned at the keynote. It’s one of Apple’s most public and influential means of communicating with their customers. I hope they’re a specific call to action, i.e., “go to apple.com/privacy to find a list of congressman and senators to contact.”