On the eve of earnings and the “It’s been way too long” special event, it’s time to look back a few years and forward a few quarters. The instrument chosen is Apple’s income statement viewed in Perspective flows.
Show #1: The Future of the Internet and Everything
Part 1: The Internet is dead, long live the Internet
The data shows the Internet growth will go through an inflection point. Should we panic or celebrate?
In this inaugural episode we open with the biggest question facing the biggest technological innovation of our time: the limit to growth of the Internet. The Internet is the backbone of our post-industrial society as much as the railroad was the backbone of the industrial revolution. Even more so, the diffusion of internet consumption is the fundamental engine of growth at a time when industrial economies are all mired in syndromes of underinvestment and misallocation of resources.
And so it matters greatly if and when the Internet will “inflect” in growth, going from acceleration to deceleration. Mobile computing sustained this acceleration, bringing computing and connectivity to the billions for whom the PC would always be beyond reach. But even with the expansion of device-based usage limits are in sight.
The implications could be profound. Frothy valuations and optimism could evaporate. Venture Capital could find few exits and the “second Internet Bubble” could burst. On the other hand, maybe the data shows that opportunity is largely unmet. Quantity of users is but one proxy. How can growth and business model innovation continue?
Stay tuned for four more parts:
- Part 2: Browsing vs. Apps The HTML5 vs. Native debate and the jobs the Internet is hired to do.
- Part 3: Monetize This The problem with business model innovation. When the ad dollars run out, what will take their place?
- Part 4: Random How discovery is changing and the value of irrationality.
- Part 5: Glass is half full How can we screw this up? Privacy, Surveillance and The Internet Citizen’s Bill of Rights.
Significant Digits is a talk show where we take time to recognize patterns in the lives of technologies.Notes:
Fresh off of back-to-back AirShows, Horace discusses the future of his “cinematographic” presentation style and announces Airshow World Tour. We also look at episode #103’s prescient prediction of Amazon’s move into delivering their own products.
Using interactive graphics and narration, this latest Apple Earnings Review discusses Apple’s performance in relation of its historic performance as well as to expectations (published in the Preview) on the following topics:
- Guidance vs Actual performance: Now that Apple changed the way it provides guidance, are we seeing a new degree of precision in their signaling. We look at the history of earnings guidance and how effective (or not) the current method is in helping predict performance.
- Gross and Operating Margins analysis: What is the pattern of margins and how important are margins to the perception of competitiveness?
- Margins by product. How are margins allocated by product?
- Average selling prices for each product. Any surprises in Pricing? What was the magnitude, cause and significance of iPhone ASP drop.
- iOS product shipments. Comparison with expectations, trends and explanations. Overall iOS growth story.
- Cash balance and the effect on cash of share re-purchase.
- Sales growth and Earnings growth, a long term retrospective.
Duration is about 1hr.
As a reminder, the Padcast can be reviewed interactively users can access to the underlying data.
It’s available for download on the iPad for $19.99. Those who already bought the Preview will be receiving an updated version soon that includes the Review at no extra charge.
Anders Brownworth and I got together on a Perspective airshow and recorded our conversation about Apple’s performance this quarter. We packaged it as a downloadable Padcast which you can listen to while looking at the motion graphics. After listening you can peruse the graphs and estimates at your leisure.
Requires an iPad of relatively recent vintage, the Perspective App and $19.99.
Horace investigates asymmetric organization structure, and how Apple’s functional vision of careers and jobs differ from most tech companies.
2013 will see two billion phones shipped to over 4 billion consumers. Contrary to the common assumption that larger markets sustain more competitors, this rapidly growing market is profitable for only two device vendors. Horace Dediu seeks answers to this paradox at the Harvard Business School Technology and Operations Management Digital Seminar Series. Self-recorded live on March 7, 2013, 45mins, 22.5Mb.
In addition to the video (On Capital Spending’s Transformation of the Electronics Industry – YouTube), you can download the presentation used as an iPad Perspective story here.
It is a featured story on Perspective App on the iPad and now on iPhone and iPod touch.
Steve Jobs once joked that engineers think Hollywood writers do their work by drinking beer and telling jokes and Hollywood thinks building software is as easy as writing a check for the tech. In reality creating software and creating art are more similar than they are different. The phenomenon of mass market software in the form of entertainment has blurred the lines even further–making software has become more like making movies than making machines. There are lessons to be learned by all developers.
File Size 14.9MB, Talk duration about 30 min. Requires iPad.