The Critics 'No More Magic' Theme

 

One of the key points that were echoed by several Asian reports last week was that there wasn't any more magic coming from Apple. The first such report came from China's Sina under the title "Apple's iPhone 5 bigger, faster but lacks 'wow'. In their report Michael Yoshikami, chief executive of Destination Wealth Management stated that "There is not a wow factor because everything you saw today is evolutionary. I do think they did enough to satisfy," however. The Sina report was actually tame and well balanced by recognizing the entire Apple event line-up of innovations including the complete redesign of the iPod nano.

 

In a second account, Feixiangwang Xiangligang writing for Sina Weibo, China's most popular microblogging site, was quoted by China Daily as stating that "Apple used to be a piece of artwork. The mystical expectation has faded into 'everything known' with the latest iPhone 5."

 

The third and final source that pushed this 'no more magic' theme is considered a different category of critic altogether. The Korean Times is a staunch supporter of Samsung. We exposed one of their reports last week that twisted the facts in an effort to tarnish Apple's brand by insinuating that the Cupertino Company was a patent troll. Of course the facts proved otherwise.

 

This time around, the Korean Times struck with force with two new hard hitting articles. The first simply titled "No More Magic" tries to remove Apple's mystical media power by basically stating that without Steve Jobs pulling a rabbit out of a hat "Apple has no figurehead who comes remotely close to his ability to mesmerize an audience."

 

In The Korean Times second article titled "Is it worth an extra 100 Bucks?" they turn to John Park, an analyst at Daishin Securities in an effort to diminish Apple's leading market position and the new iPhone 5. "There were no remarkable features in the new phone. User interfaces were not surprising, while hardware specification was not much different than competitors."

 

Park went on to state that "The iPhone 5 marks the end of innovation for Apple and the whole industry. Starting next year, as the standard of high-end phones is equalized between companies the competition will come from price. Apple will no longer be on the offensive with innovations, but will be on the defense against rising rivals."

 

Samsung, the Fantastic Soap Maker

 

It appears that Mr. Park is basically conceding that Samsung just doesn't have much more than pricing power to beat Apple with. On that point we may agree, as Samsung is considered a company that is little more than "a fantastic soap maker" – according to Christian Lindholm, chief innovation officer of service design consultancy Fjord based in Finland.

 

In Reuters March article, Samsung themselves acknowledged that they have "yet to attain Apple's innovative spark. And Lee concedes he is no match - yet - for Jonathan Ive, the genius designer behind the distinctive look and feel of Apple's range of phones, tablets and other must-have consumer gadgets." Lee Minhyouk is Samsung's youngest senior executive in their mobile division's design center.

 

Clarifying Christian Lindholm's soap making analogy, he went on to state that Samsung's "products get you clean, lathers well. However, they do not know how to make perfumes, an industry where margins are significantly higher. Perfume is an experience. Perfume is meant to seduce, make you attractive and feel good. You love your perfume, but you like your soap." He went on to state that "designing something people can love is an art, which requires risk taking and is based more on experience than data. "Samsung needs to learn to lead more. They analyze all creativity to death, they lack self-confidence."

 

Apple's Army has a Strong Commander-in-Chief: Tim Cook

 

The Korean Times and most of the Asian press are still under the impression that Apple was a one man band: Steve Jobs. Yet they fail to understand that Steve Jobs created an army and its name is Apple Inc. Apple's new Commander-in-Chief Tim Cook, while being a quieter leader, certainly delivered a knock-out blow last week, even if the foreign press failed to report on it. I'll review the specifics for those that missed it.

 

 

Tim Cook, pacing the stage stated that Apple sold 84 million iPads through to June 2012. "This is absolutely shocking when you think that this is a product category that didn't even exist two and half years ago. Now our competitors have taken note of this and over the last year they've launched hundreds of tablets to compete." Tim Cook asked the question: "And so how has iPad faired?"

 

 

Cook continued by stating that "If you look at a year ago, the iPad had a 62 percent market share. So what happened over the last year with hundreds of tablets coming to market? Well, the latest data for iPad is 68 percent share. It actually went up. And the gap is even more staggering when you look at usage statistics.

 

 

The iPad accounts for 91 percent of the web traffic of all the tablets. Now, I don't know what these other tablets are doing. They must be in warehouses or store shelves or maybe in somebody's bottom drawer!" This drew considerable laughter from the crowd as you could see from the event photo.

 

 

So where are Samsung's cheaper tablets on Apple's noted chart, Mr. Park? Yes exactly, lost somewhere in that infinitesimal 9 percent shown in the chart noted above. How is your pricing theory standing up now Mr. Park? I guess you missed the memo on that one Mr. Park because Apple's US competitors thought the very same way you did years ago and where are these competitors today? Exposed by the facts, The Korean Times rhetoric has fallen short once again.

 

Tim Cook hit a homerun with his simple charts and observations and he delivered it with as much class and style as Steve Jobs would have. More importantly, he struck Samsung between the eyes using simple humor. Well done.

 

Building More Fan Bases

 

Like a good Commander-in-Chief, Tim Cook reported on how Apple is building out more fan-bases overseas. Cook told us that there are now 380 stores around the world in 13 countries. Further, Apple Store traffic hit 83 million visitors between April and June alone. That's a tangible factoid Samsung can't even imagine, let alone copy. How do you copy enthusiastic and loyal fans around the world? How do you copy a high energy community? They can't and never will.

 

Here are a few photos from the latest Apple Store that just opened in Barcelona Spain. It's another stunner and yes, it was crafted to inspire a city, to respect its people and to be a contributing economic force.

 

 

CEO Tim Cook walked us through the new Apple Store that took two and half years to design and develop. Apple rebuilt the storefront by using limestone from a local quarry. "No one would have done this but Apple," said Cook.

 

Here's a view of Barcelona's Apple Store before opening day …

 

 

Here's a picture of the store in the evening of opening day.

 

 

Here are a few photos of the interior, including one showcasing their Classy Glass Staircase: a design envisioned by the late, great, Steve Jobs.

 

 

 

The Barcelona Apple Store: Opening day Jubilance!

 

 

Here's one of their typical cheery Apple Store Troopers.

 

 

And finally, here's a group photo of the entire Barcelona Apple Store Staff taken from the second floor.

 

 

The iPhone 5

 

 

One of the points that The Korean Times article made was that the iPhone 5 marked the end of innovation for Apple and the whole industry. A second point they made was in the form of a question being is the iPhone 5 worth an extra $100.

 

Last week we pointed to Apple's inevitable iWallet and the problems Google was currently having with it. The point being that Apple's eventual entry into the iWallet micro payment market with a future iPhone will blow the market away because they'll get it right. Apple is also working on a projection system for future iDevices including a future iPhone. A great number of other projects are on the drawing board as well. So this notion that the iPhone 5 marks the end of Apple's innovation is not only shear folly, it's the dumbest line ever delivered from an analyst anywhere on the planet.

 

To the question: Is the iPhone 5 worth $100? Are you kidding me? Then again, in context, it's a typical question from a mind that champions the copycat culture. For them, price is all that matters. Yet I'll reiterate: The PC industry tried and failed with this old and tired tactic against Apple who actually defied marketing-gravity. But instead of arguing the point, let's just see if Apple's iPhone 5 is worth $100 more.

 

 

Whose smartphone changed the industry forever? Time Magazine acknowledged that fact on the day the iPhone debuted. The modern smartphone as we know it today was invented by Apple – even if Androiders pull their hair out of the heads like zombies at this fact. Any of Apple's original classy device upgrades are worth $100 but let's quickly look at just the hardware features presented last week to see its true value.

 

In Describing the new iPhone, Phil Schiller stated that "It is really easy to make a new product that's bigger. Everyone does that. The challenge is to make it better and smaller.

 

Schiller went on to make an obvious point that Samsung forgot: "What is the design center for a Phone? It's this: it's your hand. A phone should feel great in your hand and more importantly it should be easy to use with a magical device we all carry called the horizontally opposed thumb. It does most of the hard work for us. So when you carry your phone it should feel beautiful in your hand."

 

 

It should be easy to send messages, type emails, surf the web – and it's just how we designed iPhone 5. And all of the software that comes on the iPhone 5 was updated to take advantage of the [taller] display." Of course that was a direct slam against Samsung's big and sloppy Galaxy phone and other designs.

 

Continuing, Schiller stated that "The engineering team went much further. They've done some breakthrough work and have integrated touch sensors right into the display itself," referring to the next generation in-cell display. This makes the display 30% thinner than the iPhone 4S while making the image sharper with less glare in sunlight. It's truly the world's most advanced display," said Schiller.

 

Schiller also pointed out that the iPhone 5 has 44% more color saturation than the iPhone 4S which brings the iPhone 5 up to full RGB color specification. It's the most accurate display in the industry.

 

One of Schiller's most powerful statements of the event was Apple "updated every aspect of iPhone 5. Everything has been enhanced, re-engineered, re-designed over iPhone 4S."

 

The photos that are illustrated below demonstrate just some of the many refinements and new technologies that are going into the iPhone 5: a next generation speedy connector, console quality graphics, superior sound via a completely new audio technology called Wideband Audio, new noise cancellation technology so others could hear you better, faster graphics, faster CPU, and a ton of new camera technologies including the all-new Panorama. If you love photography, you're going to love the new iPhone 5.

 

 

And that's just the iPhone's hardware upgrades. For software the iPhone 5 will be getting a complete new iTunes makeover so that it matches its desktop and iPad versions. Then there's all new mapping capabilities with satellite 3D modeling and turn-by-turn navigation for your car. For the first time, Apple's FaceTime will be available over LTE and 3G (though there are some minor politics at play in Korea at the moment).

 

 

The iPhone 5 in its totality packs a powerful punch with phenomenal advancements and refinements to both hardware and software that Apple fans will come to love over the coming months. No one brings hardware and software together like Apple can.

 

Apple fans also appreciate the finer details of their iDevices. The attention to detail like only Jony Ive and his team could provide. It's the finer touches that make the iPhone so cool, so very rich when compared to all competing offerings. Here's what Apple's master industrial designer said about his team's latest design. .

 

Jony Ive: On the iPhone 5

 

 

Along with the experience of actually using it, what makes iPhone 5 so unique is how it feels in your hand. The materials it's being made with; the remarkable precision with which it's been built. Never before have we built a product with extraordinary level of fit and finish. We've developed manufacturing processes that are the most complex and ambitious. Starting with the aluminum, we machine all of the surfaces of the enclosure. We then polish and texture them. We then use crystalline diamonds to cut the chamfers. It's so exact that you're left with a near mirror finish. These techniques create a dramatic distinction between the product's lightly textured back and its highly polished chamfered edge. This manufacturing precision extends to how these many pieces seamlessly come together. The inlay of the product is matched to the housing through a highly sophisticated process.

 

 

With the part on a conveyor, two high powered cameras take pictures of the housing. An instantaneous analysis is done and then the best match out of a possible 725 cuts is determined. The variances from product to product we now measure in microns. We believe going to extreme lengths is the only way that we could deliver this level of quality.

 

To create the new iPhone, we began with a design that we really loved. But to build it, to implement it we had to look way beyond what we knew to be possible. It took all our learning, our best thinking, to realize something so simple, so clear and yet so truly extraordinary. 

 

They Still Don't Understand the Magic of Apple's Crazy Ones

 

At the end of the day, Apple's critics don't and may never understand the greatness embodied by the Crazy Ones of Cupertino. Steve Jobs was the greatest talents of our time. But Steve Jobs created a core team around himself to make Apple what it is today. He fed off of some of the best talent in the industry to make his presentations explosive. But we must never forget that Steve Jobs created an Army of talent. Apple's domineering force came from Tim Cook's incredible logistical talents. Scott Forstall was the man that Steve Jobs looked to in order to push iOS to what it is today. Eddy Cue is the man behind iTunes and Phil Schiller is the marketing guru behind how Apple was perceived around the world. The real magic was in the team Steve Jobs built and dubbed the Crazy Ones. That hasn't changed and if anything all have stepped up their game in memory of Steve. Apple is an army, and its Commander-in-Chief, Tim Cook, is leading the charge. And if you don't get that, you don't get Apple.

 

When all is said and done, it all comes down to Apple inspiring people around the world to dream and to push their creativity to higher ground at work and at play with some of the coolest computer devices on the planet. Is it worth a $100 more for any Apple product? I'll leave you with this:

 

I read a report the other day that was truly humbling. One young teacher by the name of Li Na in Chuangsha, Hunan Province who wanted an iPad 2 so badly that she put $283 down (1,800 yuan) and was willing to pay monthly charges until it's paid for. Li Na said, "I dreamed about it for a long time and now I can use it. It would take me another half a year if I put aside money from my monthly salary of 2,000 yuan to pay for it."

 

Talk about dedication. A young teacher making about $318 dollars US a month saved all that she could to buy an iPad 2 because she dreamed about it. Her new iPad is likely something that she'll use to inspire her students with. She could have saved at least $100, Mr. Park, and gone with one of your cheaper brands. But Li Na didn't do that did because she had a dream of owning the coolest tablet on the planet today, and its name is the iPad 2.

 

Whether it's an iPad 3 or an iPhone 5 it really doesn't matter. Some people – just don't get that customers around the world are willing to pay a little more for an original quality based mobile device that actually provides them with software that they want, such as iTunes, iPhoto, iMovie, FaceTime, Pages, Maps, iBooks and more.

 

In the end, Apple's current competition just doesn't have the depth to take Apple on toe to toe. They're stuck on pushing dead hardware specs alone. So in the end they 'Think Cheap' as being the answer for everyone. Fine, run with 'Think Cheap' as your sales slogan as it's quite becoming.

 

As for Apple, their leadership and magic shone through with the release of their greatest iPhone yet: the iPhone 5. And Macites around the world said, Amen.