Sunday, July 31, 2022

Apple: Moving Beyond China's Unstable Market

At first glance, you might think that the title of this article is a clickbait considering that China is the second biggest economy in the world and Western countries have made tens if not hundreds of billions from Chinese consumers. However, this access to the Chinese market really can end overnight - either at the whim of the totalitarian government in Beijing because perceived slight by the company or another zero-COVID lockdown as the rest of the world adjust to living with the pandemic.

Like any government or organization that has grown to a size that is too big for its own good or to be able to be effective, Beijing is no different. However, it is controlled by one man at the top and has only a few individuals who get together to set policies. Control is absolute and dissent is nowhere to be seen on the surface. Mention Tibet or truthfully state that Taiwan is an independent country, you can find your company suddenly under the microscope of the state controlled media and social media that immediately called for banning the company from the company.

While a company like Apple with Tim Cook at the helm has been very good at navigating Chinese politics and kowtowing it its demands, it is inevitable that Apple will have to choose how far it will go to placate the Chinese Community Party. 

To be fair, China also needs Apple. Without Apple and other Western tech companies, China's economic growth and is technical advances would be nowhere near where it is today. The benefits to all parties cannot be denied. The hope, from the perspective of the West, is that as China went from a third rate economy to one that everyone knows that eventually become the largest in the world, it would also open up its society and some form of democracy would thrive as a result. Well, that did not quite happen. If anything, China has become more closed off and other Western governments are taking cues from it.

A day of reckoning is coming. Whether this could be the result of Speaker Nancy Pelosi's trip to Taiwan or something else down the line in the South China Sea. The question for Apple, other companies, and the West is that before any flashpoint, do companies like Apple time left to decouple from China as it is no longer the low hanging fruit that it is?

Even before the supply chain disruption based by COVID and China's zero-COVID policy, Apple with its partners has begun to trying to ship manufacturing away from China for years. And just as it has taken decades for Apple to develop its supply chain in China, it may take just as long for Apple to do the same elsewhere so that if anything happens in China that is worse than what Apple experience with the COVID disruption, the effect would be mitigated.

If there is going to be pain beyond the ones caused by COVID, that will slowly go away as Apple's supply chain in India, Brazil, Vietnam, and even the US matures.

The more important question is Apple's access to the Chinese market and what happens if Apple loses it completely one day. It can happen over time as Chinese nationalist sentiments become even more extreme than it is today and kick out Western companies or make unreasonable demands that even Apple cannot accept. This is the most likely scenario for Apple to leave. War between China and the United States is another. 

For Apple, it makes sense to spend additional resources and pay more attention to markets outside of China. Doing this would make sense for any company. However, it is even more important for Apple because China has been its profit and revenue growth engine for more than a decade. To replace that is paramount for Apple. 

Apple's total revenue in 2021 was $365.8 billion. China came in at $68.3 billion. It is probably going to be the same for 2022 given the economic and political challenges. It is unlikely that 2023 and the foreseeable years will be any different. Apple's growth will have to come in forms of new products and services and working harder in regions where I think it is underperforming. 

The key question is what to do if that $70 billion a year from China suddenly disappear. While Apple or anyone else for that matter will not publicly suggest that will happen out of fear of angering China, it has to be something that keeps Tim Cook up at night. How do you replace 20% of your revenue?

You cannot do that just like that. However, in the short term, Apple will try to diminish the size of that China's contribution to its bottomline.

  • Double down growing the size of its services revenue. Apple services generated nearly $20 billion in the latest quarter and it will hit $100 billion annually. Getting it to $150 billion if service revenues continue to grow at a steady pace will help a lot. Wall Street seems to suggest that China will stagnate in the coming years. 
  • New products. Apple Watch has done well and as Apple's focus on health for the wearables continue to improve the watch, greater number of upgrades and new users will pick it up. New products will still be needed. Augmented reality is going to be big bet for Apple. 
  • While promising, Apple's future may well be its auto ambition. We have not seen a new car from Apple or anything like that but Apple's latest CarPlay "play" from its World Wide Developer Conference this June has folks very excited. No one knows for sure if Apple is making any money from auto makers that have incorporated CarPlay into their vehicles. Some suggests that Apple charges manufacturer no cost to incorporate CarPlay. If that is the case, Apple is using it as a halo effect for its other products and services. Apple will eventually release its own car. That alone can generate tens of billions in additional revenue that alone rivals the size of Apple's China revenue. The global vehicle revenue is projected to be nearly $4 trillion. Telsa's 2021 revenue is $54 billion. Volkswagen and Toyota generated $254 billion and $250 billion respectively. Ford came in at $127 billion and GM generated $123 billion. If Apple takes only 1% of the global auto market, that means $40 billion of additional revenue. A more apt comparison for Apple is Porsche which is doing quite well with only $35 billion in 2021.
Those points above is a roadmap that many know about given the number of articles about services, augment reality, and car plans from industry analysts, Apple focused news sites, and Apple itself. There is one other area that Apple can spend more energy on. 

With a GDP greater than even the United States, Apple seems to be underperform in Europe. And Asia is more than just China. And I have yet to hear anything about Apple's business plan for Africa. Putting all of this together, Apple can continue to grow regardless what happens in China.

And let's face it - doing business with China means losing a bit of yourself. I don't want to quite cross the line and suggest it is like selling your soul to the devil but it is close. You cannot ignore the human rights violations indefinitely for both Chinese citizens and minority groups like the Tibetans and Uighurs. Apple executives and boardrooms in other companies will one day have to decide of doing business in China under the current condition which will worsen in years to come is worth it. If they are asking themselves this question now, it's time to prepare to go on without China.

Saturday, July 30, 2022

Time For Mac to Give Back To the iPhone and iPad

We have seen quite a number of iOS and iPadOS features that have migrated over to the Mac. Perhaps, it is time that the Mac give a little back. After all, if not the for Halo effect of the iPod and, later, the iPhone and iPad, perhaps the Mac might not be as successful as it is today. 

Let's see what some of the great features that the Mac gain from the iOS/iPadOS. First off, the App Store quickly comes to mind. The proliferation and success of the app economy with the App Store meant that Apple has naturally would duplicate the App Store on the Mac. While the success of the Mac version of the app store is somewhat dubious, I have not bought any app from outside of the App Store in years. 

And of course, this next revolution function that people today are taking for granted: multi-touch. It first appeared on the iPhone in 2007. And now, it is common place on the trackpad for the MacBooks and Magic Trackpad. 

I am sure if we dig back, we can find a dozen or so more - Books, messaging, sharing, Siri, etc. Perhaps it is time that the iPhone and iPad gain some of the Mac. 

One of the first features I want to have on the iPhone is the studio quality microphones that Apple put on the MacBooks. I've never had a chance to do my own recording and listen to it. I don't have one of the new MacBook Pro and trying it out at the Apple store just is not practical. The best I can do is listen to samples on Youtube. Honestly, it does sound better than the regular microphones on the iPhones and iPads. Professional podcasters and producers will still want use their own dedicated studio microphones but I think for on the go recording and for videos, it would be a welcoming addition. For the iPhone 13, Apple featured the new cinematic mode that allows iPhone 13 users to shoot video that looks like those in the movies. 

We have seen demos of this feature, some are professionally done. And what I noticed that the sound should have been a lot better. Perhaps this is where Apple can give the iPhone studio class microphones, focusing on sound as it continues to improve both video/photo qualities. 

Another feature I think the Mac should share with the iPhone and iPad improved battery life. As Apple improve efficiency of its own chips, the battery life should start to go beyond the 10-hour limitation that has been around since the original iPad. To be fair, I think for daily uses, the iPad, particularly the bigger ones, has gone beyond the 10 hour mark with some tests going as high as 13:42 hours for the new iPad Air (Tom's Guide). However, the rest of the iPad lineup come in just a bit over the promised 10 hours. I like to see Apple improve that by 10-15% per upgrade cycle until it reaches parity with the MacBooks. Honestly, it is not a big ask as Apple is placing the iPad Pro as a productivity machine. A pro tablet with a pro battery life. The 18-hours you can get on the MacBook is nothing short of astonishing. And we already have great battery life on the iPhone Pro and Pro Max.

The next one is something that I think some Mac users with iPads would like to see the the ability of the iPad to run Mac apps. The iPad Pro and iPad Air already have the same M1 chips inside the MacBooks, Studio, and Mini. What is keeping the iPad from running Mac apps? Perhaps not with iOS 16 but with a future iPadOS, Apple can bring together an environment in which Mac apps can also run on the iPad as well as it does on the Mac. Developers can already code for the iPad and Mac at the same time. Perhaps it is the developers who should make sure their Mac apps run on the iPad. 

I believe that while Stage Manager in iOS 16 and on the Mac, it is Apple attempt at doing just this. It could take another round of iPadOS and MacOS updates but I do believe that Mac apps will eventually run on the iPad. And yeah, the iPad will get the M2 (and M3 and every subsequent Apple silicon).

And finally, speaking of Apple silicon, would it not be wonderful if Apple upgrade the iPhone Pro Max with the M2 and, later, M3 chips. It makes sense that Apple would make sure the flagship iPhone is the most powerful mobile computing device. Consider this, with an iPhone Pro Max with M-series chip inside that is hooked up to a monitor or HDTV via Airplay, it can go into the Stage Manager mode and instantly becoming a desktop computing device.

What other Mac features or hardwares would you like Apple to bring over to the iPhone and iPad?

Friday, July 29, 2022

Health Sensors On the iPhone - Great Ways for Apple To Get Users To Upgrade Than Annual Processor and Camera Improvements

 I can go for a year or two without a new iPhone because I think I'm not missing much when it comes to the incremental upgrades between one iPhone and the subsequent one. Better processor is great as is improved camera but for my daily needs, I just do not see the difference. However, I believe that Apple can get users to upgrade more often if Apple upgrades the iPhone with health related sensors. 

I am sure you already know that there are apps that can measure your heart rate - press your index finger up against the flash on the camera and it is able to read how fast your heart is beating. I've also seen one done through the selfie camera. 

However, I think there are other sensors that Apple can add to the iPhone that can make the iPhone a health companion the way the Apple Watch is for me and tens of millions of users. I am not expecting a Baymax when I mentioned companion. At least not yet. Perhaps one day.

But until that day, I think I can settle some health sensors that are already on the Apple Watch, even some that Apple might have working but have yet to incorporate them into the Apple Watch because of technical reasons because the Watch is so small where as the iPhone could potentially have more room for Apple to fit in biometric sensors.

  • A dedicated heart rate sensor would be nice but I feel that would be redundant since we can already use the camera and the flash for that reason.
  • An oximeter would be great. Given the importance of blood oxygen level as it is related to COVID pandemic which shows no sign of abating, I imagine this would be a must have feature for iPhone users. 
  • Temperature - there are rumors that the next watch may include temperature sensors. I'm not hopeful that Apple will add a new health feature this year. However, having temperature sensor that allows the iPhone to act as a thermometer would be pretty cool. Rumors suggest that Apple's current idea of the body temperature gauge can only tell if you have an abnormal body temperature (like a fever) as opposed to the actual body temperature, I think adding something like this to the iPhone would be perfect. And because the iPhone is larger, maybe Apple can add a bigger sensor that is able to tell the temperature of the users' bodies.
  • I'm lump these features in together because we only know that Apple is working on them but are no where near ready: blood pressure, glucose level, more advanced heart monitoring, and possiblydiagnostic tools that might detect early signs of health related issues. The last one is where the iPhone is more like Baymax.

I can imagine more than a few doctors who would not mind having an iPhone that can help them with basic diagnosis or gather health data on their patients for the sake of saving times, costs, and, not to mention, lives. 

I do my basic breathing, check up on my blood oxygen, and, once in a while, use the ECG app on my watch. If I did not have an Apple Watch and Apple added those functions to the iPhone, it would entice many iPhone users to upgrade their iPhones just to get those functions. Plus, many Android users would probably want to switch. It would not preclude these iPhone owners from also buying an Apple Watch as well. 

On top of that, Apple would be saving a lot of lives as well. And if Apple wants to make sure that an iPhone with health functions do not prevent users from buying Apple Watches, Apple can limit it only to the iPhone Pro Max. 

Could this happen? I think so. On top of the rumors of what Apple is doing with health for the Apple Watch, there is rumblings that future AirPods could also gain health related functions as well. 

What do you think? Do you want an iPhone that also keeps you healthy?

Wednesday, July 13, 2022

Everyone Wants a 12" MacBook with Apple's M-Series Chip So Just Make It Happen Already

I do not know if Apple will ever release another 12" MacBook (regardless of whether it is an Air or a Pro but there has been a lot of attention focused on it recently. As someone who will need a new MacBook soon, but not immediately, I can afford to wait at least a year. 

I am currently writing this post on a 2016 12" MacBook that I bought for the purpose of writing and some light professional work. The professional part is debatable but I definitely have gotten a lot of milage out of this MacBook. I love the size and for a while the battery life. The keyboard is fine though the right shift key is giving me issues. And the speed is fine enough for browsing the Web, coding at a beginner level, and, of course, writing.

In a year, should my coding turn into more than just a hobby and other professional needs arise, I will be have to start the upgrade process. And by then, a 12" MacBook? 

I'm hoping Apple just make it happen already in a year or so. Arguments for it are there. There are those who argue that the new M2 MacBook Air is perfect already. And if in a year, perhaps that is what I will upgrade to if there still is not a 12" MacBook on the market.

However, I think users who have never owned and used a 12" model have to understand that those of us relishing for a 12" laptop have our reasons. One quickly comes to mind - it just feels different when I am on my 12" as opposed to the Air that my wife has. I'll be fine with an Air but the portability of the MacBook cannot be matched by anything else. Whenever I read user comments to related articles and on Twitter, some even goes as far as to mention the 11" MacBook Air from 2015. 

There is a market for a high quality, well spec-out 12" MacBook. There has been rumblings that it could be a Pro model. So be it. I think it is worth a premium if Apple can give up a bit more speed than the lower powered Intel versions. Many have forgotten but in decades past, light and small commanded a premium price even if it was underpowered at times. 

MacBook Air M2 - I Love It And Any Laptop You Get Will Always Be Right For the Time

The 2016 MacBook sitting off to the side still has some value as I gleefully starting using my MacBook Air M2 that I got for a decent price ...