Friday, 09 March 2012 11:16

Apple's New iPad Launch the least of their Worries

Written by

Reading time is around minutes.

steve-jobs-think-different-1024x768Momentum is an amazing thing. When an object or company has it, it can seem like nothing can slow it down and indeed is can be hard to stop something that has built up momentum. For example, Apple has had a massive movement behind their company and products their momentum had built up over years of careful marketing and catchy products. To many analysts it seemed like nothing could stop Apple. However; when you are driving along passing cars with ease and you suddenly shift from fifth into third you will quickly find out how much of a bad day you are going to have and how easy it is to lose that momentum.

Apple just launched the “new iPad” with the tag line “Resolutionary”. This tag line is meant to highlight the impressive resolution of the new iPad which has some very nice hardware specs to back up the resolution behind the new display. The problem is that the press, investors and even many consumers appear to be unimpressed by the new iDevice from Apple. The last group will be argued against by Apple fans saying that demand was so overwhelming that Apple’s servers were overwhelmed. Well to that I will say this; as a company, Apple has not done their job in maintaining their servers for events like this and there are multiple reasons for this little fact. If you take a look back in history Apple’s servers have gone offline due to “demand” at each launch. This gives the impression that demand is so high that they have overloaded the servers and makes people rush to try and get whatever device it is that Apple is pushing. The problem is that if Apple was really concerned about their customers they would increase the capacity of their servers on launch day to accommodate demand. It is easy to do actually, a good formula for predicting demand is to multiply past pre-orders by 150% and ensure that your connection and servers can handle that load. As Apple’s servers are in multiple data centers around the US (and the world) this should be no problem at all. Yet for some reason it is at EVERY launch.  However, I am getting off of the topic here.

Apple’s New iPad has impressive specs, but that is not all that it needs to keep Apple’s momentum. Looking over the listing there is not all that much that is new. You get a better display, quad core GPU (which is where Apple got their 4x claims by the way which were wrong in any case as Tegra3 has 12 GPU Cores and 5 CPU Cores), updated iOS, new camera on the back, iPhoto, 4G LTE (Sorry Sprint Customers)… and not all that much more. Now some have said that this list is amazing! It is great and the iPad is the best thing since sliced bread (the same thing that has been said about every iPad). But are these really all that amazing?

An updated iOS was (and should be) expected so that is not that big of a deal. Apple left out Siri on the iPad and has also ignored the requests for Haptic Feedback on the OSK (On Screen Keyboard) that people have asked for time and time again. iPhoto is a paid app, it is not a stock app that you get when buying the iPad so that really doesn’t count there either. It is nice, but it is not truly an iPad feature. The quad-core PowerVR GPU does not mean you are automatically going to get 4x the performance as the law of diminishing returns shows. In fact the little slide that Apple used for that part of the presentation has received quite a bit of criticism over the past few days and is one thing that is sure to be tested by in the near future.

This leads us to the display; with a 10-inch 4:3 screen the 2048x1536 resolution is will make things sharper, but what happens to all of the apps that were made for 1024x768? They will need to be up sampled somehow which usually causes a loss of quality. Just take a picture from the internet and change its PPI from 72 to 144 and see what I am talking about. There are ways to deal with this like Anti-Aliasing etc., but you will still lose some quality and also use up some GPU power in the process (which is one of the reasons they need those four GPU cores). Still you could argue that because of the up sampling this argument is moot.

Looking at the stock prices we see the usual upswing in Apple stock before the event and even during the event (which is not uncommon) however the trading and price changes were not that amazing compared to other launches Do not get me wrong at the time of this wiring Apple stock is $546.04 per share which is very high, it is just that the stock prices did not go up the way we have seen in the past. At the start of the even at 10:00am PST Apple’s stock was worth 541.43 which was an increase of about $6.50 per share from its opening price of $534.88.This is normal for Apple stock leading up to a launch even, now after the launch at 10:20 the stock dropped a little more than a dollar and began a little roller coaster for a while with Apple stock ending at $541.84 for the day. That is only a net change of .41. Compare that to the almost $10 change for the iPad 2 launch and something it not quite right. Even this morning the price of Apple stock has only gone up a few points.

Apple has more than a lackluster launch to worry about

Still as we have said Apple will sell a ton of these and make lots of money so even though we can see the changes happening, it will take a while to filter to the consumer. Apple has more things to worry about than just the New iPad and what some in the press (even press that used to support Apple) area saying about it.

Apple, as we have mentioned before, is undergoing an identity change. Although I was not a fan of Steve Jobs he did have a flare about him that allowed him to understand and communicate with Apple’s customer base. He was seen as a visionary and was well liked in the market. Tim Cook, on the other hand is a business man. He is less interested (and it shows) in the consumer than the business side of Apple. So far the majority of his actions have been to keep the stock holders happy. Cook has not learned how to balance things just yet. He is keenly aware that he is not the same type of leader as Steve Jobs and in order to prevent stock holders from leaving he is working to keep them happy and in place. Of course we could tell Cook that the way to keep stock holders happy is to keep that market happy, but that might be lost on him.

Apple’s aggressive legal campaign has had its ups and downs this week as well. They lost their bid to sue a company that is already in Chapter 11 Bankruptcy and appear to have lost their petition blocking Kodak from selling their Patent portfolio as well. The judge presiding over the hearings did say that Kodak and Apple will have to work these things out, but in the end if Kodak Sells off their patents to someone else to help pay their creditors it could all be a moot point.

Apple’s case against Pro View has stalled, as the Chinese manufacturer has issued an open letter threatening all distributors (including e-trailers) with legal action if they sell the New iPad. Granted this is not a court order, but Pro View can enforce any band they have received in many provinces and also drag retailers into court to enforce their trademark (which could cost the retailers money and time they do not want to spend). Apple has appealed the original decision by the Shenzhen Intermediate Court, but they have not won the battle by any means especially considering they might have to face legal action in the US over the use of IP Application Development Limited to originally acquire the iPad trademark.

Meanwhile back on the home front Apple is again coming under fire for the claims that updating to the latest iOS will magically give your iPhone 4S “4G”. The iPhone 4S does not have an LTE of WiMAX radio and HSPA+ is not 4G. This claim has upset a number of Apple customers and in a couple of cases resulted in FTC complaints over the claim. When you add that to a US Department of Justice Investigation into Price Fixing for e-Books Apple has quite a bit on its plate. It is very clear that Apple is losing momentum. I am not saying they are dead or dying, they will still make money and sell products, but under Tim Cook there have been and will be very obvious mistakes in product launches along with a tendency to concentrate more on the business and logistical side than on the consumer experience.

Although Apple’s campaign in Germany against Motorola and Samsung is going very well for now, there are some things in the work there that could derail even that successful campaign.

As other manufacturers move more firmly into the tablet market with comparable yet less expensive products we could see Apple’s grip on the tablet crown slip considerably and this is not even taking into account the pressure that Windows 8 on Arm and x86 tablets will bring to the table later this year. The market’s love affair with everything Apple is fading (not rapidly but still fading) and will continue to do so as more and more choices hit the streets. Apple has at least one more big launch this year if the rumors are true so how Tim Cook handles the fabled launch of the iPhone 5 (if that is really the name) will be a big indicator of where Apple could be heading for 2012 and beyond.

Discuss this in our Forum

Read 2683 times Last modified on Friday, 09 March 2012 11:36

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.