There are two huge topics of discussion in Silicon Valley right now. The first is “Who will win the level 4 autonomy race, Tesla or Uber?,” and the second is “Is Apple in trouble?”
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One of the greatest parts of my life, and boy do I lead a charmed life, is that, for some crazy reason, the smartest kids in the class have decided they like to hang out with me.
I’ve been asking my investor, founder and journalist friends what worries them about Apple, and I’ve been giving it a lot of thought myself. Here are the top six (valid) reasons I’ve compiled:
1. iPhone 7 announcement fell flat
2. Project Titan is anything but
3. The Underwhelming Watch
4. How is Apple MIA on VR & AR?
5. Machine Learning & AI
6. Jobs said he solved TV, but we can’t see it
We wanted VR, we wanted a new form factor and Howard Stern wanted holographic phone calls. We got Samsung’s waterproofing from two years ago, a new color (or lack of color), a camera upgrade and they took our headphone jack.
I’m actually excited about the camera upgrades, as I’ve got kids and I like taking pictures of food, but I know that I’m in the minority of people who will upgrade a 12-24 month-old phone just to take slightly better pictures.
Those of us who drop our phones into the toilet, or who spend too much time emailing in the hot tub, will certainly appreciate the waterproofing. I’ve started to see friends making videos underwater on the Cape with the Samsung waterproof smartphone and it’s cool, but the iPhone 7 is rated just under the Samsung in terms of water protection.
As an aside, it’s kind of cool that there is actually a rating system around “immersion protection,” with the iPhone 7 being resistant and the Samsung being able to operate underwater for 30 minutes (more).
Is this Apple’s shortcoming, or simply a sign that we’ve hit Peak Smartphone? Probably 50-50, and that’s a huge problem for Apple, either way.
More importantly, Android’s operating system continues to get tighter and easier to use, and don’t get me started on how much better Google’s Project Fi is than AT&T or Verizon’s offerings, providing a real reason to switch to Android: less carrier pain!
Apple really should make their own Project Fi, as the best part of Android is kicking out Verizon.
Reports are they’ve rebooted away from making their own car, and earlier this year we heard they couldn’t find a partner for the project (i.e., BMW or Mercedes). The car is the missing piece to the puzzle, and the facts that they can’t get a partner, and have decided to not release their own project is really sad — or it’s a diversionary tactic!
Seriously, it’s completely possible Apple is making the car and is doing a MASSIVE head fake to the industry by leaking that they will simply be a software provider.
The Underwhelming Watch
Everyone I know bought the watch and very few are still using it. They added GPS and made it swim proof in version 2.0, but that is basically a catch-up move. My Fitbit Surge lasts for a week on a charge and has had GPS for a couple of years.
Clearly Apple missed the mark with a timepiece and now realize they need to specialize and win over the athletes. I give them credit for that.
My prediction: The smartwatch is DOA until they can put a 4G connection into it and make it a standalone device. Imagine being able to call an Uber, check your email and make a phone call on your watch while leaving your phone at home — that’s compelling!
How is Apple MIA on VR & AR?
If any company should own the VR & AR space, it’s Apple, which has a massive App Store with loyal developers, sexy hardware and made-to-use chips that are exceptional at graphics. Yet, here we are, with Oculus being bought by Facebook and leading the pack along with…. HTC’s Vive. Samsung, Google, Sony and Microsoft have really compelling products in the market as well.
Heck, Snapchat is making some AR glasses as we speak, which I’m predicting will feature people’s Snapcodes above their heads while allowing you to “blink three times quickly” to publish the last seven seconds of your life.
Yep, Snapchat will release a “Life DVR” before Apple even announces something.
[ If you missed it, here is the video from the tiny startup they bought, and their public demo. ]
That’s seven major competitors out there getting it done and we don’t even have a rumor about an Apple product. Now, VR & AR are very new and there is no clear winner, so it is possible that Apple could come from behind — like they did in smartphones and tablets — and lap the competition. But given their recent track record, it is strange we’re not even hearing rumors.
Machine Learning and AI
Apple took forever to figure out the cloud and now it looks like the same pattern might be playing itself out again with machine learning and AI.
The sexy features in products we’ll be using in the coming years might not be measured in design and hardware specs, but rather in intelligence. Do you care about what the car looks like or the fact that it doesn’t let you get in a fender bender (or lets you sleep on the way to work)?
Will you care about the UX of your next email app and calendar, or the fact that it prioritizes your email perfectly, and finds the perfect cafe, time and people to invite to solve your latest business meeting needs?
All the good stuff coming will be based on machine learning and AI and that doesn’t play to Apple’s strength — but boy does it play to Google’s!
Jobs said he solved TV, but we can’t see it
Famously, Steve Jobs told Walt Mossberg that he had solved the TV issue, and that he was going to do an actual physical TV — not just the current hockey puck device called “Apple TV” that you plug into your Samsung TV. (The one that comes with a kickass Smarthub built in that does 90% of what Apple TV already does, and some things it refuses to do, like support Amazon Prime!)
There has been no word on a physical TV in a long, long time, and Apple can’t seem to figure out how to do a skinny bundle for an OTT (over the top) service.
The Big Question People Aren’t Asking Publicly — Yet
It’s super annoying when folks say “Steve Jobs would have gotten this done” and “Jobs would never have stood for this,” but the reason folks say it is because Jobs was that good at getting the final 10% or 20% out of product — and Apple.
Without Steve, Apple seems to be getting by just fine, but these six red flags are leading folks to believe that maybe, just maybe, it’s time to start thinking about putting a visionary product person in the top seat and having Cook move back to the more natural position of COO.
Tim Cook has kept the ship tight at Apple, but there is a growing sense among the most elite and informed people I talk to that someone with a bold product — or corporate M&A — vision needs to take over.
Founder authority, which is driving Tesla, Google, Netflix, Uber, Amazon and Facebook to dizzying heights of audacious innovation, is what’s missing at Apple today. Cook has managed the transition exceptionally when you look at the stunning balance sheet, but someone has to step into the driver’s seat and prepare Apple to compete with Elon, Larry, Reed, Travis, Jeff and Mark — who are just getting started.
In my follow-up piece, I’ll outline “the Path to a Trillion,” but for now, what do you think are the biggest threats to Apple out of those six? Are there any other issues that belong in the top six?
All the best, @jason
PS – I’m writing this on my iMac Retina, while my iPhone 6s and iPad Pro charge on the desk, but I’m wearing a Fitbit Surge and have my Nexus 6 in my pocket. I just bought my first Windows machine in years to power my Oculus headset. I’m 80% Apple, 20% other right now — and the Apple part is shrinking fast.
PPS – Our next event will feature speed dating with the 100 founders who are the most ready for their Series A, pitching to the 50 top investors in the world. You get 10 minutes to quickly meet, so this is super efficient for everyone. Founders and investors apply here.