The Captain is on the Bridge

| Editorial

Yesterday's earnings report reminded us of some fundamentals about Apple that reflect objective reality. While an increase in U.S. average unemployment from 4 to 8.5 percent has dire domino effects in general, it doesn't impact Apple in the same way. A good understanding of that leads to better Apple product predictions.

Some functions are strongly coupled and some are not. A significant rise in unemployment, for example, has domino effects. Add a little bit of slant from the media to get our attention, and things look pretty bad.

There is no doubt now. Apple's brand and products have weathered the worst recession in memory. Tim Cook must be feeling pretty good these days that the principles Apple has lived by have proven valuable. Record non-holiday earnings are just simply phenomenal in this economy and should put to rest once and for all the whining of observers who have seduced themselves into thinking that Apple is just another computer company.

More valuable are the insights we can obtain from remembering these principles when we hypothesize about future products. Those principles are, namely,

  • There is no need to diminish Apple's brand.
  • There is no need to reduce prices or offer special "sale" prices.
  • There is no need for a cheap Apple netbook. (However, see Bryan Chaffin's editorial from Wednesday.)

While it's a national tragedy to have so many people unemployed, what Apple knows is that their customers reside on the upscale side of the 91 percent who are still employed. These consumer customers who have their own purchase authority are much more likely to replace a computer when necessary than a business that can dictate to its employees: NO NEW COMPUTERS FOR YOU!

What we're reminded of is that Apple has inserted itself into a unique economic niche of upscale consumers who expect to use the best. Ignoring that virtually mathematical reality of Apple's economics leads us to view Apple in impractical ways - and make bad product predictions.

Concept: MacBook touch (Credit: Gizmodo)

For example, some writers like to believe that in the bell curve of income, there is an even distribution of Macintosh customers. So whatever happens to the bottom half is going to affect Apple. However, Apple's customer base is weighted towards the top half of the income scale, and that's what makes Apple more recession proof than other companies.

On top of that, when people do buy a computer, out of necessity, during a recession, they realize that it may have to last them for awhile. Buying crap isn't a good idea. It's a time waster too.

Microsoft, having decided a long time ago, that appealing to the masses is the way to go, has a unique perspective on the profile of Americans, and that colors their perceptions about how to confront Apple with their ad agency. For example, the "You Find It, You Keep It" campaign currently running on TV appeals to the cost conscious, not the value conscious.

ST:NG Tablet

Star Trek:Next Generation Tablet (Already dated!)

Finally, all this allows me to make a prediction. Apple will introduce a product, some kind of iTablet or iPod Super touch, that fits (in size) between an iPhone and a MacBook. We know it will embody Apple's unique vision. What we'll have to remember is that it will be a product that appeals to Apple's own customers, a different breed of customer.

It's miniaturization, utility, technology, and quality will cost a lot more than we'd secretly hoped for. It will end up costing more than a basic MacBook which has, more or less, industry standard PC components. But guess what, we'll drool, save and want one so badly, it'll drive our families crazy. But, having no starship bridge to work on, we'll figure out how to get one anyway.

ST:NG Bridge

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2 Comments

Jeff

I’ve been wanting a FatTouch for a long time, but the one shown in the figure is a little too big. I need it to fit in my cargo pants pocket. So a FatTouch around 3 iPhones wide by 1 tall would be about right. I would hope Apple would stay with the the 163 ppi resolution and stretch the screen vertically to make it about 1060 pix x 600 pix (?16/9).

KenC

No, no Fat Touch, it’ll be an iTab.

The only two possibilities are a 5” or a 7.2” screen. Basically, two iPhones side by side would create a VGA sized screen, 640x480 that is 5”. A 2x2 matrix of iPhone screens would create a 7.2” 960x640 screen, which is close to Jeff’s Fatty. Not only that, but it’d actually be slightly larger than a Kindle screen in both dimensions. Since the Kindle has roughly the same pixel pitch as an iPhone between 166 and 163ppi, then the Kindle will give you a good idea of the size I’m talking about.

While most seem to think Apple needs something the size of a netbook screen, I beg to differ. A multitouch screen does not have to be as large. As a multitouch screen, it’s virtually resolution independent, with its smart zooming. Like the Kindle, most stuff does not need to be wider than 600 pixels. Unlike the Kindle, the iPhone and the iTab can be turned for a wider screen, when necessary.

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