Category Archives: Apple

Apple’s value hits 1 Trillion$: what a journey!

As Apple’s stock hit $207.05 today, its value reached one trillion dollars, yes with 12 zeros and the first US company to do so. This is an incredible journey for Apple.

Back in 1992, when I was introduced to Steve Jobs, he was out of Apple and doing Next. He jokingly remarked to me (I had just left IBM to join Oracle), “you better fix this company or else Larry won’t be able to pay for water to fill the lake (in front of Oracle HQ)”. Subsequently I did attend more than one presentation from Steve explaining how powerful the Next computer was.

Subsequently his second coming to Apple happened back in 1997 after Apple acquired Next and Gil Amelio was ousted as CEO. A friend of mine (former Oracle colleague) was a senior advisor to Steve on software back in 2002. I visited him at Apple HQ then and he said that Steve was pondering if Apple should be changed to a software company, in which case, he had to lay off over 70% of employees. How he reshaped the PC business during his first few years is well-known. We were commenting half jokingly that Apple was in the business of painting computers, as they came in varieties of colors. The financial situation was quite bad then. As part of diversification, Steve introduced the iPod as a totally new way of storing music. It’s UI was a great innovation.

Advance the clock to 2007 and then came the iPhone which completely changed the landscape. Sales of the iPhone now account for more than 60 percent of Apple’s total revenue. In 2017, Apple sold 223 million of the devices, earning the slot as the top-selling tech product of the year. Samsung came in second, with combined sales of the Galaxy S8 and Note 8 hitting 33 million.

In addition to profiting handsomely from iPhone sales, the device made possible other Apple revenue streams, including the App Store, Apple Music, iCloud and Apple Pay. Those services created $8.5B in revenue for Apple in the last quarter of 2017 alone ― more than it made on AirPod, Apple TV, Apple Watch, iPad and Beats headphone lines combined.

Steve’s genius is still paying big dividends with innovative design and user friendliness. As someone said, if you can reshape one industry in your life time, you will be remembered for ever (like Alexander Graham Bell). But Steve reshaped six industries – PC (first in the market), Music (iPod & iTunes), Smartphone (iPhone), Tablet (iPad), Store (Apple Store with steel and glass), and Animation (Pixar, now part of Disney).

After his death in 2011, Al Gore had mentioned that someone like Steve Jobs only comes to the planet every 150 years. Today, Tim Cook and team at Apple should be very proud of their achievement in reaching 1 trillion dollar valuation. For perspective, the gross domestic product of the entire U.S. is just over $18.5 trillion.


iPhone’s tenth anniversary – iPhone X

Yesterday (September 12, 2017), Apple celebrated the tenth anniversary of its original iPhone, launched by Steve Jobs back in 2007 at the Moscone Center in San Francisco. It was a big day when Apple opened its brand new Steve Jobs Theater at the new Apple campus. The show began in front of 1000 invitees with a Steve Jobs video from the first iPhone event, thus inaugurating his own designed theater. His wife Lauren and co-founder Steve Wozniak were present. It was a big moment.

Besides introducing incremental upgrades to Apple Watch and Apple TV (4K support), Apple introduced two versions of iPhone 8, basically very similar to iPhone7. The brand new thing was Apple X (Ten, not X). This was a very different design. The screen is bigger (5.8″) using OLED technology for the first time. Ironically the OLED screen is developed by Samsung. The iPhone X is only slightly bigger than the iPhone 7, but its screen is larger than that of the jumbo-size iPhone 7 Plus.

Here are the highlights of iPhone X:

  • A gorgeous screen and beautiful design.
  • Great cameras, wireless charging, better battery life, and water resistance.
  • No home screen, side button is multi-tasked to do few functions.
  • The best mobile operating system.
  • All on a device that you’ll end up using several hours a day.

Facial-recognition is the most prominent new feature. Called Face ID, it will be the primary tool to unlock the nearly $1,000 iPhone X, which is scheduled to start shipping Nov. 3. A camera system with depth sensors project 30,000 infrared dots across a user’s face that computing systems use to create a mathematical model that is stored securely on the phone. Each time users hold the device to their faces, the technology verifies the mathematical model before unlocking the phone in an instant. Considering iPhone users on average unlock their devices 80 times a day, the success of Face ID could make or break the device, analysts says, especially after early users get their hands on it and begin sharing their experiences publicly. This is a crucial function that must be flawless. Yesterday the demo failed and that’s not very auspicious.

If it catches on, the facial-scanning technology in iPhone X could unlock other changes in how we use smartphones. In one small example, Apple also is using the system to capture facial expressions and use them to animate images of chickens, unicorns and other common emojis. Those animojis, as Apple calls them, can be captured and shared with friends.

iOS remains the best smartphone operating system and the iPhone’s biggest advantage over its competition. Apple’s operating system is the only smartphone platform that comes with consistent, guaranteed updates. And it’s the only one that routinely brings cutting-edge features, like augmented reality, to older phones.

Johny Ive’s new design elegance is clearly seen in iPhone X, as also in the round glass auditorium lobby of the Steve Job’s theater.

Technology for a cashless society

I happened to be in India last November when prime minister Modi announced the demonetization program, where 86% of the currency in the form of two paper bills (Rs. 500 and 1000 denomination) were made defunct. People were given time to deposit their existing currencies in the bank. Those who had unusually high volume of such currencies were supposed to declare the legal source or face stiff penalties such as 60-75% tax. The goal was to catch the money hoarders and black marketers who avoid paying taxes on such undeclared money.

Four months later, I happened to visit India last February. Everyone suggested I download an app. called Paytm. I could transfer money from a bank account instantly. What was convenient with Paytm was that I could use it at gas stations, small stores, and even at roadside vendor shops. Everyone seems to have installed the Paytm station where you point the smartphone with a Paytm barcode and the transaction happens instantly. You can check your balance any time. I noticed people are paying for phone, utilities, and other conveniences without having to carry loads of cash. To incentivize more usage, discounts are doled out by many vendors.

Paytm, based in Delhi, has raised $738 million from investors inside and outside India (Alibaba, SAIF Partners, Goldman Sachs, Singapore’s Tomasek, Taiwan’s Mediatek, etc) at a valuation over $5B. Paytm wallet users exceed 200m. Clearly the demonetization has come as a boon in dramatically increasing it’s usage. They have also started their international operation by making the digital wallet available in Canada earlier this year.

Why the digital wallets have not taken off big in the US? We have Apple Pay and Google Wallet for a while, but their usage has not been spectacular. One of the reasons may be the wide use of credit and debit cards that consumers are used to. But in a developing country like India where credit/debit card usage is quite low, a digital wallet like Paytm scores big. The company expects to reach profitability next year and may be one of the new unicorns (>$10B) soon.

The top five most-valued companies are Tech. – almost

On this first day of August 2016, I saw that the top most-valued companies are tech. companies, and the fifth one is almost there. Here is the list.

  1. Apple ($appl): $566 billion
  2. Alphabet ($goog): $562B
  3. Microsoft ($msft): $433B
  4. Amazon ($amzn): $365B
  5. Exxon Mobile ($xom): $356B
  6. Facebook ($fb): $353B

The big move is Amazon’s beating Exxon Mobile (used to be number 1 for many years) to the fourth spot. The switch came after Amazon posted its fifth straight quarter of profits last week as the oil giant’s profits tumbled 59 percent during the same rough period. If Exxon continues its drop, then Facebook will beat it in days.

This is quite remarkable! Other than Microsoft and Apple, the other 3 companies are much younger, Facebook being the youngest one. Their rapid rise is due to the growth of the Internet with its associated areas of search, e-commerce, and social networking. Interestingly Amazon survived the dot-com bust of the early 2000-2001 time unlike Yahoo, AOL, etc. Contrast this to the $4.8B valuation of Yahoo’s core business acquired by Verizon last week! Also, the fastest growing and most profitable of Amazon’s 3 businesses (Books, any commercial items, and AWS) is the cloud infrastructure piece called AWS (Amazon Web Services) with a run-rate of $10B this year. This is way ahead of Microsoft’s Azure cloud or Google’s cloud solutions. 

The importance of cloud is obvious as Oracle just paid $9.3B last week to acquire Netsuite, a company that was funded by Larry Ellison. With a 40% ownership of Netsuite, he gets a hefty $3.5B from this deal. Paradoxically, Amazon lead the way to cloud computing – not IBM, not HP, not EMC/VMWare, and not Microsoft or Google. So no wonder, Amazon is reaping the benefits!

Stack Fallacy? What is it?

Back in January, Tech Crunch published an article on this subject called Stack Fallacy, written by Anshu Sharma of Storm Ventures. Then today I read this Business Insider article on the reason why Dropbox is failing and it is the Stack Fallacy.  Sharma describes Stack Fallacy as “the mistaken belief that it is trivial to build the layer above yours.”

Many companies trivialize the task of building layers above their core competency layer and that leads to failure. Oracle is a good example, where they thought it was no big deal to build applications (watching the success of SAP in the ERP layer initially built on the Oracle database). I remember a meeting with Hasso Plattner, founder of SAP back in the early 1990s when I was at Oracle. He said SAP was one of the biggest customers of Oracle at that time and now Oracle competes with them. For lack of any good answer, we said that we are friends in the morning and foes in the afternoon and welcomed him to the world of  “co-opetition”. Subsequently SAP started moving out of Oracle DB and was enticed by IBM to use DB2. Finally SAP built its own database (they bought Sybase and built the in-memory database Hana). Oracle’s applications initially were disasters as they were hard to use and did not quite meet the needs of customers. Finally they had to win the space by acquiring Peoplesoft and Siebel.

Today’s Business Insider article says, “…a lot of companies often overvalue their level of knowledge in their core business stack, and underestimate what it takes to build the technology that sits one stack above them.  For example, IBM saw Microsoft take over the more profitable software space that sits on top of its PCs. Oracle likes to think of Salesforce as an app that just sits on top of its database, but hasn’t been able to overtake the cloud-software space they compete in. Google, despite all the search data it owns, hasn’t been successful in the social-network space, failing to move up the stack in the consumer-web world. Ironically, the opposite is true when you move down the stack. Google has built a solid cloud-computing business, which is a stack below its search technology, and Apple’s now building its own iPhone chips, one of the many lower stacks below its smartphone device”.

With reference to Dropbox, the article says that it underestimated what it takes to build apps a layer above (Mailbox, Carousel), and failed to understand its customers’ needs — while it was investing in the unimportant areas, like the migration away from AWS. Dropbox is at a phase where it needs to think more about the users’ needs and competing with the likes of Google and Box, rather than spending on “optimizing for costs or minor technical advantages”.

Not sure, I agree with that assessment. Providing efficient and cost-effective cloud storage is Dropbox’s core competency and they are staying pretty close to that. The move away from AWS is clearly aimed at cost savings, as AWS can be a huge burden on operational cost, plus it has its limitations on effective scaling. In some ways, Dropbox is expanding its lower layers for future hosting. It’s focus on enterprise-scale cloud storage is the right approach, as opposed to Box or Google where the focus is on consumers.

But the Stack Fallacy applies more to Apple doing its own iPhone chips, or Dell wrongfully going after big data. At Oracle the dictum used to be, “everything is a database problem – if you have a hammer, then everything looks like a nail”.

2015 – Year of Open Source explosion

Open source software – software freely shared with the world at large – is an old idea, dating back to the 1980s when Richard Stillman started preaching the gospel calling it free software. Then Linus Torvalds started working on Linux in the early 1990s. Today, Linux runs our lives. The Android operating system that runs so many Google phones is based on Linux. When you open a phone app like Twitter or Facebook and pull down all those tweets and status updates, you’re tapping into massive computer data centers filled with hundreds of Linux machines. Linux is the foundation of the Internet.

Cade Metz recently wrote in an article, “And yet 2015 was the year open source software gained new significance, thanks to Apple and Google and Elon Musk. Now more than ever, even the most powerful tech companies and entrepreneurs are freely sharing the code underlying their latest technologies. They recognize this will accelerate not only the progress of technology as a whole, but their own progress as well. It’s altruism with self-interest. And it’s how the tech world now works. This is not just a turning point, but a tipping point – says Brandon Keepers, head of Github.”

Apple, for the first time, decided to offer its Swift programming language (used to build apps for your iPad, iPhone, and Mac) to the open source. That means applications built on Swift can be deployed on machines running Linux, Android, and Windows OS. Previously Apple’s language Objective-C was only meant for Apple devices. This new move by Apple will enable developers to use Apple’s development tools across competing platforms.

Microsoft, another champion of proprietary software during the 1980s and 1990s, decided to open source its .Net software. That way, .Net can be used by developers to build applications for Linux and Apple’s operating system too. Even IBM decided to open source its own machine language IBM SystemML to Apache Spark.

Over the past 15 years, Google has built a wide range of data center technologies that have helped make it the most powerful company on the ‘net. These technologies allow all of the company’s online services to instantly handle requests from billions of people, no matter where in the world they may be. Typically, Google kept these technologies to itself, forcing others to engineer inferior imitations. Map-reduce and HDFS are examples, that grew out of Google’s file system and algorithms. But last year Google decided to open source TensorFlow, the software engine that drives its artificial intelligence services, including its image and speech recognition and language translation tools. Google realized that it could tap into a much larger team of researchers to enhance TensorFlow, much faster than done internally.

Elon Musk went even further. In mid-December, he and Sam Altman, president of Y Combinator, unveiled OpenAI, a $1 billion nonprofit dedicated to the same breed of AI that Google is developing. They have promised to open source all their work.

Yes, 2015 was the year Open Source really reached new heights!

Another Big day at Apple

Apple continues to amaze. Excitement build-up. Total secrecy. Rumor mill in full works. Then the day comes like this morning! A perfectly scripted, 2-hour extravaganza packed with new products and features. The Steve Jobs tradition lives – perfect execution of a marketing event!

Tim Cook started off with the Apple Watch update.  The cool fashionable Apple Watch Hermes with great bands and watch faces. Another sports lineup with gold, rose gold, and anodized aluminum colors plus red band to go with. There were cool demos of new Watch apps, such as AirStrip where a pregnant mother can monitor baby’s heartbeat and transmit that to the doctor instantly. Other apps include Facebook messenger, GoPro, calendar, etc.

Next was the big news of iPad Pro, a large 12.9″ screen with multi-touch and 5.6m pixels. It comes with a full size smart keyboard that can get connected magnetically. The chip is A9X, a 64-bit powerhouse that doubles in performance compared to the A8X. Interestingly this iPad is 22 times faster than the original iPad. Apple also introduced a new smart pencil to draw sketches on the iPad Pro. Due to its large real estate, multiple applications can be parked, as shown by Microsoft Office guys (Excel, Word, and Powerpoint on the same screen). Adobe also demoed its comp, Photoshop Fix, and Photoshop Sketch on the iPad Pro. The iPad Pro comes at a hefty price of $799(32GB) and $949(128GB) and more for the 256GB one. The pencil costs $99 and keyboard is a hefty $169.

The other big news was the Apple TV, a revamped receiver and a brand new remote with cool features such as button for Siri and touchpad to scroll faster. Tim Cook said the future of TV is Apps such as iTunes, Netflix, Hulu, etc. The operating system is called tvOS based on iOS where developers can build new applications. It will be better user experience for sure. I like the remote control with a volume adjustment button. That way, you won’t need another remote control for the TV. This is great for Apple TV users like me who have abandoned cable for ever. This is the future for TV for sure.

Finally there was the iPhone. As predicted Apple introduced two new versions, iPhone 6s and iPhone 6s Plus. The big feature is the 3D Touch where apps can pop up for quick viewing and disappear. It has a better camera with 12 MP power with HD video or 4K video. Tim Cook mentioned that iPhone has grown 35% overall during last one year, but 75% in China. The new operating system iOS9 which is available on Sept. 12. The 6s ranges in price from $199 to $399, and 6s Plus costs $299 and up – no change from existing iPhone6 and 6Plus prices.

As usual, it was a delightful event with many cool innovations complimented with the baritone voice of Johny Ive on video for each new product design.