Mobile Forward

Apple, Stanford, Defense Dept. among Investors in Flexible Electronics Initiative

Troy Wolverton, for the San Jose Mercury News:

On Friday, Secretary of Defense Ashton Carter will announce the creation of a new institute in San Jose to develop manufacturing techniques and new applications for flexible electronics. The Defense Department will invest $75 million over five years in the initiative. The institute will receive an additional $90 million from a coalition composed of Apple and other tech companies; the city of San Jose and other local governments; and academic institutions, including Stanford and San Jose State. […]

While prototypes of flexible electronics have been around for years, manufacturers are still trying to figure out how to mass produce them, said Malcolm Thompson, who will be the executive director of the new institute. That’s where the institute will step in.

Advances in flexible electronics are critical if we want to get past the tension between display size and pocket-ability. To-date, we have nice “segmented” electronics, like this LG keyboard, but we don’t have truly foldable electronics, where the display, circuit board (at least portions), and perhaps other components bend.

On the Apple Watch “Smart Bands” Rumor

Mark Gurman, for 9to5Mac:

Last week, Europe-based news website letemsvetemapplem.eu reported that Apple is preparing “Smart Bands” to add additional health tracking sensors to the current-generation Apple Watch. The article went on to say that Apple would release the bands starting next year instead of refreshing the Apple Watch’s core hardware, with speculation that Apple does not believe people will upgrade their Watches annually like iPhones. […]

The Apple Watch and its diagnostic port were actually designed with the possibility of bands with sensors launching in the future. These potential sensor bands could also integrate with the Apple Watch over Bluetooth, and Bluetooth-based health accessory connectivity is already an option in the Apple Watch’s Settings application […]. […] 

We are told that the potential presence of “Smart Bands” will not deter Apple from annually upgrading the Apple Watch’s hardware.

First, it’s fascinating to imagine Apple considering a range of peripheral devices, essentially, connecting to Apple Watch. Including some that it might make. And if the Apple Watch gains cellular connectivity someday, the combination of the two (connected watch + peripherals) is interesting.

But back to this article: If we think of Apple Watch as a tool, adding additional modules or extensions of sorts is a plausible development of the product. On a smartphone or tablet, it’s somewhat easier to absorb new hardware into the “base”, but smartwatches offer less flexibility in that regard. It’s reasonable to assume they would have to still be aesthetically appealing, otherwise that defeats the purpose. Those who really the value additional health sensors may care less about aesthetics, but the device still has to appear reasonably pleasing to observers.

At this early point, I’d guess (the obvious, which is) that only some will opt for such smart bands, for reasons of need, fashion, and price. And smart bands, as Mark reports, won’t reduce the need for an annual update to the Apple Watch. Why? As a hybrid fashion/utility device, its industrial design needs to stay current, whatever that actually entails. And new designs increase the odds that first-time customers buy the watch. So, as Mark indicates, any “smart bands” aren’t likely to change the annual launch cadence.

IDC: Apple Sold 3.6M Apple Watches in 2Q 2015; #2 in Wearable Shipments

IDC estimates for wearable shipments in 2Q 2015:

Mobile Forward 00377 2015-08-27

Source: IDC Worldwide Quarterly Wearable Device Tracker, August 27, 2015

Note that this is analogous to showing Apple’s share of the overall handset market (i.e., not just smartphones); Apple doesn’t sell the most handsets, either. But what really matters is profit share. If IDC or any analyst firm estimated operating profit from wearables, Apple would be in first place. And it’s just getting started, in terms of distributing Apple Watch and, more importantly, in terms of capitalizing on Apple Watch’s hardware and software platforms (you may need to scroll down a bit).

Car Consumers are Primed to Value a Better Experience

I know, I know – you’ve seen this. (But if you haven’t, it’s an interesting read.) J.J. Martin, for WSJ, talks with designer Marc Newson. Specifically on cars:

My design pet-peeve is: the automotive industry. There were moments when cars somehow encapsulated everything that was good about progress. But right now we’re at the bottom of a trough.

Hold that thought. Now combine it with Alexandria Sage’s piece for Reuters, titled Many U.S. drivers ignoring new tech features in cars: survey

Carmakers are adding everything from remote car unlocking to self-parking systems in their newest models as they try to make vehicles more connected to the Internet and more automated.

But the 2015 Drive Report from market research company JD Power found that 20 percent of new car owners had still not used approximately half of the technology features available in their vehicles after three months of purchase – the period after which drivers are less likely to adopt new features, researchers say. […]

“Customers say, ‘I have a competing technology that’s easier to use, or I’ve already paid for it – so why do I need it again?'” said Kristin Kolodge, executive director of driver interaction at JD Power.

Here you have a situation where:

  • Many mobile devices (cars) are poorly-designed, and
  • Overloaded by technology (that is poorly communicated), and
  • A context where people use smartphones and find them helpful.

… if only there was a company well-positioned and willing to think different about what consumers really value out of the entire car experience.

I highly recommend reading both pieces.

Intel: Yes, They’ll Sell Modems to Apple, Says Raymond James

Tiernan Ray, helping us get the latest analyst perspective at Tech Trader Daily (both highly recommended):

Writes Mosesmann, Intel’s comments mean the company will probably get some “low-end” business from Apple starting next year:

We got multiple Valley datapoints that support Intel’s success at Apple with the new 7360 LTE mobile chip for 2016. At IDF, the Street got the opportunity to meet newly promoted GM of the Communications and Devices Group, Aicha Evans, who refreshingly and bluntly told the audience of analysts and investors that if Intel couldn’t get to scale in modems, it would basically be done. Our sense is that she knows it will have scale and Apple is that avenue. Tavis McCourt, who covers Apple and Qualcomm for Raymond James, views any Qualcomm competitor incursions into Apple as coming at the low end of the iPhone portfolio in 2016, and calls for flagship penetrations in 2017, at the earliest.

Why flag rumors, speculation, or developments like this? Anything related to processors (baseband processors in this case) and Apple is interesting.

Processors, in the abstract, are dense bundles of capability. They drive a large range of performance, efficiency, and design decisions in mobile devices.

Apple competes on many levels, and a primary one is hardware. In the context of processors, Apple advances the practical leading edge, in CPU, GPU, sensor hub and, potentially, baseband performance (think Apple Watch modem).

Any bit of information therefore, about what Apple may be ruling in / ruling out is interesting. Sometimes because it’s accurate. Other times because it simply gets you thinking or keeps you aware.

Most Electric Car Makers Use Others’ Batteries. What Might Apple Do?

Mike Ramsey, for the WSJ, in an article titled Auto Industry’s Ranks of Electric-Car Battery Suppliers Narrow:

Few companies so far have shown they can meet the challenge of building advanced batteries with the quality, weight and cost expectations that auto makers demand. And the technology is moving so fast that few auto makers have tried to master the exotic chemistry required.

Few companies indeed. I anticipate, though, that if Apple builds a car, it will seek to control the battery chemistry. In a car, this would give Apple the ability to control these types of factors*:

  • Design: Size, shape, construction of the battery compartment. This, in turn, can affect the weight, size, and handling of the car.
  • Performance: Range, battery longevity, power available for supporting systems, etc. These directly affect user experience, enjoyment, anxiety, and even safety.
  • Cost: Ability to reduce chemistry, manufacturing, recycling, and other costs.

To a limited degree, Apple customizes its battery chemistry today, in its laptops and other mobile devices. I wouldn’t be surprised, however, if Apple pursues more intense customization (i.e., in-house technology) in the case of auto batteries. 

With regard to smartphones, it’s frequently said that users won’t notice a battery improvement unless it’s 2X – 10X better than existing technology. With electric cars (and presumably Apple’s would be), even a 1.25X improvement (e.g., from 400 miles to 500) is very meaningful, especially if recharging infrastructure rollout lags car production.

Simply put, in entering a new industry where even modest differences in battery performance could matter, Apple has more incentive to innovate. That said, even if Apple does design or very heavily customize its own batteries, it might not do so with the first version of the Apple car. That will depend Apple’s overall priorities for the car.

For more, see these related posts: on batteries and on Apple trailing Google in cars.

The Nature of Google’s Lead in Autonomous Cars

Chunka Mui, at Forbes:

It would tell us that Apple is millions of miles behind Google, and falling further behind every day.

As one of the few companies in the world richer than Google, Apple can match the cars, sensors, processors, navigational systems and other pieces of hardware that Google might deploy. It can replicate the sophisticated maps that Google has compiled. It will have a very hard time, however, catching up with Google’s on-the-road learning.

Google’s lead in autonomous cars is certainly very meaningful and very impressive. Very. It’s based on great talent, foresight, timing, and hard work. It’s one of the many reasons I respect and really like Google (/Alphabet). And, even if there’s a much more gradual, prolonged shift to autonomous cars — i.e., via semi-autonomous cars – Google is in a strong position to capitalize on that.

And Chunka Mui is right to say that Apple will have a “very hard time” catching up. By definition, the nature of the problem that Google, Apple and others aim to solve is “very hard”. And, more to Mui’s point, it’s true that reaching Google’s level of proficiency will be, again in his words, “very hard”.

But, so what? It would be a mistake to equate “very hard” with unlikely.

First, it’s very, extremely, immensely early in the shift to autonomous cars. And, as an aside, it’s so early that even if Apple’s first car isn’t a fully autonomous car, it might be *exactly* the right product for that moment in time.

Second, to generalize, the one thing Apple (like Google and Tesla) is good at is solving “very hard” problems. And, unlike Google, Apple has, for years, solved ones that combine computing and physical interaction; bits and atoms, integrated.

Third, there are many dimensions of competition. (The contrast between Google’s approach to mobile devices and Apple’s illustrates this perfectly.) In the context of cars, Google has amassed a lead in one major one: autonomy. In smartphone terms, that’s like mastering the very essential aspect of — pick your analogy – connectivity, sensing, imaging. Each one is an essential-but-not-sufficient condition for success. (I’ll highlight other conditions or dimensions in upcoming posts.)

So, Mui’s article is well worth reading. But, to beat the smartphone analogy to death, it’s the year 1995, in smartphone terms. And yes, some will say “Time moves ‘faster’ now; competitors learn at an accelerated pace. ‘1995-to-now’ will happen rapidly”. In some ways, that’s true. But there are also key differences: regulation, consumer psyche, and a very high-stakes environment, where quality, privacy, and security matter at — to use a Google term — a 10X level. It’s too early to discount Apple.

Intel Unlikely to Get iPhone Modem Business, Says Bernstein

Tiernan Ray, writing for Barron’s Tech Trader Daily, fills us in on Bernstein’s latest analysis:

Bernstein Research’s Mark Li […] offered up a skeptical view of recent speculation that Intel (INTC) may be poised to win as much as half of the business supplying the wireless modem chip for Apple’s (AAPL) next iPhone model, at the expense of current supplier Qualcomm (QCOM).

On Intel’s modem, he outlines the shortcomings:

INTC does not have a mature modem […]. […] The first one, XMM726x, has only gained adoption in a few low-volume models since 2014 and field test track record has been spotty. The chip is made with 28nm and hence is not most competitive in power efficiency. The second chip, X3-C3440 (SoFIA LTE), is an SoC with an integrated processor, but Apple has its own processor & needs just a standalone modem. Plus, the chip is not yet ready. The third chip, XMM7360, despite featuring Cat 10, is not ready for mass production either. […]

We won’t hold high hope on INTC getting the business in the future but won’t rule that possibility out completely either.

Wednesday Assorted Links

1. Samsung Pay and Apple Pay Are Only Fighting Over 20 Percent of the Smartphone Market Perhaps… but it’s a 20% that likely has ~80% of the most valuable consumers. And it won’t stay 20% for long. Being there first, with a better solution, matters. And, as @eric_analytics points out on Twitter, Apple Pay vs. Google Wallet would have been a better comparison.

2. Qualcomm still supplies modem chips for next iPhone, sources claim

The sources believe that Intel is unlikely to obtain modem chip orders for the upcoming iPhones. However, Intel could win orders for the 2017 iPhone models as Apple is searching for additional modem chip suppliers apart from Qualcomm, the sources noted.

Sparks the question: would an Intel baseband processor appear on the iPhone, Apple’s current core business, before it appears on any other product (e.g., iPad)?

3. Xiaomi Bakes Opera’s Data Compression Tech Into Newest Version Of MIUI Android

4. Apple Working on Large Glass Something or Other, Says Global Equities

  • A device which is 27″ to 50″ Curved Glass somewhat resembling a car windshield or a curved display
  • The whole surface area acts like an HUD (Heads Up Display)
  • The various sensors are built right into the Glass

Impossible to tell how accurate this is, but it is interesting. Dimensions (if accurate) don’t appear large enough for a car windshield. Unless it’s a small prototype. This sort of glass assembly is probably something Apple can’t build in-house (i.e., for a prototype). So, with a supplier involved, the odds of a leak are higher. “Leak” isn’t quite the right word, though, since it implies a certainty that this information is accurate.

Quality Products and Recurring Revenue: Variations on a Theme

From focus, to fundamentals, to financials:

I have two quotes up on my wall: One is mine, “Quality and consistency creates the addiction.” Zane Lowe Talks […] (Jem Aswad; Billboard)

Apple is perceived as a hit-driven business. That’s not as attractive as a business that collects rent. Of course, the logic has not sunk in that having 1 billion loyal customers is a recurring revenue business. Devices are a recurring revenue model too. Not yet appreciated as perception lags from consumer electronics era. Horace Dediu, on Twitter. (First, second, third Tweet.)

Sprint unveiled Monday a new leasing plan called iPhone Forever that starts at $22 a month for an iPhone, in addition to the monthly service fee. Customers can upgrade to the latest iPhone each year as soon as it is available. That is an improvement over Sprint’s current leasing offer, which only lets customers upgrade to a new iPhone every two years. Sprint to Abandon Two-Year Contracts (Ryan Knutson, WSJ)

Monday Assorted Links

1. LG bets that OLEDs are the future of displays

It’s investing the equivalent of $8.5 billion into developing OLED technology over the next three years for everything from TVs to cars to wearables.

2. Project Ara delayed until 2016, looking for new locations in US

3. Leaked iPhone 6s schematics hint at the same 16-128 GB storage options, new SiP architecture

Drawings indicate that Apple would indeed be employing a System in Package (SiP) technology along with a Printed Circuit Board (PCB) architecture. The SiP technology is used by Cupertino in the Apple Watch, and it allows for faster production of more compact and more efficient circuitry.

4. Sprint CEO hints at plan to turn old iPhones into new customers

“Used phones and, the iPhone in particular, have tremendous appeal,” Claure said. “We have a surprise in terms of what will happen to these used phones.”

5. Sprint to Abandon Two-Year Contracts

6. Charts Not Playlists

The future is TRUSTED filters directing the audience where to partake of desirable music.

Applies to more than music.

The Guardian: Documents Confirm Apple is Building Self-Driving Car

Mark Harris, for The Guardian:

Apple is building a self-driving car in Silicon Valley, and is scouting for secure locations in the Bay Area to test it, the Guardian has learned. Documents obtained by the Guardian show the oft-rumoured Apple car project appears to be further along than many suspected.

Self-driving? We haven’t heard that before. And the article doesn’t explain the basis for that thinking.1 I do take it with a grain of salt. But if an Apple car does launch by 2020, and if Google, Tesla, and others have self-driving models (or nearly-so), then … it’ll be an interesting situation.

Key things to remember: early reports are often wrong, plans change, and competition happens along many, many dimensions.

______

1. Credit to John Gruber for quickly pointing that out.

On Apple’s Stewardship of the iPad

Khoi Vinh, writing on his blog, Subtraction.com:

Apple’s stewardship of the platform has had an air of distractedness for too long, in my opinion. In the absence of true innovation, both consumers and developers have come to regard the iPad as inessential, a deadly combination. The fact of the matter is that Apple will need to take a much more aggressive approach to innovating both hardware and software to turn this situation around.

That’s a good summary. I do think iPad Air 3 is going to be a great improvement and that many consumers will upgrade in the next two product releases. The question about “distractedness” raises the question whether the “distractions” — Apple’s other priorities — are going to turn out to be worth it. If Apple successfully shapes (and profits from) the future of wearables (Apple Watch and related products) or the future of transportation (Apple Car) then the answer will be “yes”. Much has to happen, though.

Do We Need New Designs for Mobile Devices?

Several interesting bits today, loosely related to new form factors. Most of them evoke a need, rather than a solution, but they’re still interesting.

[With the Galaxy S6 Edge display] Samsung discovered a latent appetite for new, interesting mobile designs, even ones without a lot of practical value. Samsung Has Two Big New Phones, and Even Bigger Ideas (David Pierce; Wired)

The mobile phone in general and the smartphone in particular are designed to be carried first, and spoken into second. […] They’ve fallen out of favor because using the telephone feels mechanically ungainly as much as socially so. Don’t Hate the Phone Call, Hate the Phone (Ian Bogost; The Atlantic)

Language like “interface-free” and “invisible UI” point up just how stuck we are on the idea of VISUAL interfaces. (Josh Clark, @bigmediumjosh; Twitter)

Beyond the antenna designed for a smartphone, Apple notes that the design could also relate to Apple Watch, a MacBook an iMac, an iPad, iPod, gaming device or health monitoring device, and so on. Apple Designs Advanced Wireless Antenna with Unique Sapphire Structure for Killer iPhone Form Factor & Beyond (Jack Purcher; Patently Apple)

That second snippet sounds a bit obvious, in that everything needs to be carried before it’s used. More broadly, though, it prompts ideas about other form factors, including wearables.

Monday Assorted Links

1. On recent rumors of an Apple MVNO: two thoughts, from John Gruber and Jean-Louis Gassée, sum up the reality perfectly, in my view:

Apple is a partner with all the carriers around the world that support iPhone. They can’t compete against them while partnering with them. (link to Gruber’s post)

“[Apple’s] one and only goal is selling devices. Everything else is in support of that goal. Would [an Apple wireless carrier] sell twice as many iPhones? Probably not.” (link to Gassée’s post)

2. Samsung Invents another Round of Concepts for future Smartphones with Multiple Displays. Exciting. Glad to see someone tackling this problem. This is one of many patents Samsung has filed. The specifics of this one don’t matter as much as the notion that Samsung (and others) are working to make this a reality. Someday.

3. Xiaomi ties up with Taiwan’s Foxconn to assemble smartphones in India. This aligns with Xiaomi’s focus on cost reduction (because it sells at razor thin gross margins) and helps it pursue the hearts and minds of consumers.

4. HTC stored user fingerprints as image file in unencrypted folder. Lovely. Reminds me of one of the six reasons I’ve used an iPhone since the 3GS: industrial design, ease of use, camera, apps, software updates, and … security.

6. Back to the future: Nokia prepares for mobile comeback. Increase in hiring / activity, in preparation for 2016/17 brand-licensing comeback.

6. Graava is a new action camera that does the editing for you. Watch the two minute video. I like the idea of it. I don’t need the actual product, though. Will we ever see something comparable in a smartphone? It reminds me of HTC’s “Zoes”.

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