Does Apple Hack Its Own Products?

Axios: “Every time Apple releases its newest iPhone or OS, there are significant spikes in searches for terms like ‘iPhone not working,’ ‘iPhone slow,’ and ‘iPhone problems,’ according to data from Google Trends.This has led to a conspiracy theory that has been revived almost every year, claiming that Apple intentionally slows down old phones to entice iPhone users to upgrade to their newest, often more expensive product. But the phenomenon can also be explained by a few other reasons.”

For example: “Older models have to work harder to run everything the newest, superior OS provides, and therefore consume more energy and battery life.” Also: Patrick Moorhead, an analyst for Moor Insights Strategy comments: “One very important thing to consider is that at the same time of an OS upgrade, application developers upgrade their applications. Therefore at the same time the new OS is indexing for Spotlight, it is updating applications, which temporarily would slow down the phone.”

And: “Most iPhone users are quick to update to the newest OS, and tend to be critical of every included change. This critical mindset might cause some to feel like like their phone is working slower than before at first … Nothing has been ‘proven’ here, but there are many logical explanations for why iPhones might not run quite as smoothly after an OS update that don’t include Apple maliciously hacking their own products.”

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5 Ways Best Buy Beats Amazon

The New York Times: “Best Buy’s rebound has been surprisingly durable. Revenue figures have beaten Wall Street’s expectations in six of the last seven quarters … How do they do it?” Highlights from a conversation with Best Buy CEO Hubert Joly: 1) Price. “Price-matching costs Best Buy real money, but it also gives customers a reason to stay in the store, and avoids handing business to competitors.” 2) Humanity. “The associates in our stores are much more engaged now, much more proficient,” Mr. Joly said.

3) Showcase & Ship. “Mr. Joly realized that with some minor changes, each of Best Buy’s 1,000-plus big-box stores could ship packages to customers, serving as a mini warehouse for its surrounding area … Best Buy also struck deals with large electronics companies like Samsung, Apple and Microsoft to feature their products in branded areas within the store. Now, rather than jamming these companies’ products next to one another on shelves, Best Buy allows them to set up their own dedicated kiosks … Even Amazon has set up kiosks in Best Buy stores to show off its voice-activated Alexa gadgets.”

4) Quiet Cuts. “Under Mr. Joly, Best Buy has used the scalpel as quietly as possible … he has never announced a huge, public round of layoffs, which can crater employee morale and create a sinking-ship vibe.” 5) Luck. “It’s lucky that the products it specializes in selling, like big-screen TVs and high-end audio equipment, are big-ticket items that many customers still feel uncomfortable buying sight unseen from a website. It’s lucky that several large competitors have gone out of business, shrinking its list of rivals. And it’s lucky that the vendors who make the products it sells, like Apple and Samsung, have kept churning out expensive blockbuster gadgets.”

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Hitting Home: Best Buy’s Traveling Salespeople

The Wall Street Journal: “Best Buy is hiring hundreds of salespeople to sit down with consumers inside their homes and recommend electronics to buy, part of a free service it has been testing in several cities and plans to roll out across the U.S. this fall. The company hopes its in-home salespeople will help drive sales of TVs and gadgets at a time when fewer people are visiting shopping centers, as well as drum up business for Best Buy’s Geek Squad, which provides tech repairs and in-home installations for a fee.”

Best Buy Chief Executive Hubert Joly comments: “What we’re finding is people in the home tend to spend more because we address a bigger need for them compared to what they spend in the store.”

“Unlike its Geek Squad workers who fix gadgets, Best Buy’s in-home advisers are traveling sales consultants who are paid a salary or on an hourly basis, not commissions. Based on the customer’s needs, they provide product recommendations, ranging from HP and Apple laptops to Amazon Echo and Google Home devices. The prices cited are the same as in the company’s store or website.”

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Ambient Computing: Invisible & Omnipresent

Steve Vassallo: “Slack and Airbnb—like Pinterest, Instagram and Kickstarter—are recent successes founded by designers, people who are devoted to the practice of building impeccably considerate technology. Design is the key to building the next great wave of companies.”

“I think we’re entering the age of ‘ambient computing,’ when personal technology will become invisible and omnipresent. Augmented reality, artificial intelligence, robotics, drones, the Internet of Things, and other nascent tech will fade into the background of our lives. Technology will no longer come in the form of gadgets.”

“In this new era, design will be ever more critical to how we build and use our technology. The 21st century will be the century of the designer founder, when core value for businesses is created by entrepreneurs who have a deeper, more intuitive sense for the human condition.”

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$1,400 iPhone & The Veblen Effect

Christopher Mims: “The launch of a pricey new iPhone has big implications for Apple’s financials, and it also bodes well for Apple’s continued dominance in mobile phones. Here are five reasons for Apple to go big, price-wise:” 1 Halo Effect: “An ultraexpensive edition of the iPhone makes sense as a shot in the arm for the whole brand … 2 Crazy New Tech: A big reason companies have halo products is that they give them a way to test new technologies.” 3 Supply & Demand: “If Apple’s high-end iPhone is aimed at a new segment—people willing to pay more than $1,000 for a phone—Apple can charge whatever it likes to balance supply and demand for the device, rather than worrying about whether increasing the price will hurt its overall market share.”

4 Average Selling Price: “With a phone priced upward of $1,400, Apple would have the opportunity to move the single most important metric on its balance sheet: the average selling price of a new iPhone.” 5 The Veblen Effect: “The final reason a pricey iPhone makes sense is that, paradoxically, the more expensive Apple makes the device, the more people will lust after it. Conspicuous consumption was first described in ‘The Theory of the Leisure Class’ by the economist and sociologist Thorstein Veblen, who singled out products that, contrary to logic, sold better when their prices went up.”

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Surprise #2: Microsoft is Leading PC Innovation

Farhad Manjoo: Microsoft “is making the most visionary computers in the industry, if not the best machines, period. In the last two years, while Apple has focused mainly on mobile devices, Microsoft has put out a series of computers that reimagine the future of PCs in thrilling ways … perhaps because it’s way behind Apple, Microsoft’s hardware division is creating products more daring than much of what has been coming out of its rival lately.”

“Under Panos Panay, Microsoft’s Surface chief, the company has given its designers and engineers license to rethink the future of PCs in grand ways — to sit in an empty room, dream big things, and turn those visions into reality … The mind-set has resulted in several shining ideas. For Surface Studio, Microsoft built a brilliant companion device called Surface Dial — a palm-size knob that sits on your drafting-table screen, creating a tactile interface with which to control your computer.”

You can use Dial for basic things like turning up the volume. But in the hands of a designer, it becomes a lovely tool; you can scrub through edits in a video or change your pen color in Photoshop with a turn of the wheel … Dial is one of those interface breakthroughs that we might have once looked to Apple for. Now, it’s Microsoft that’s pushing new modes of computing … it’s unlikely that Microsoft’s PC hardware business will beat Apple’s anytime soon. But anyone who cares about the future of the PC should be thrilled that Apple now faces a serious and creative competitor.”

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Open & Closed: The Key to Apple’s Success

The Wall Street Journal: “There are intriguing parallels with the development of the iPod music player in 2001 and the Macintosh personal computer in the early 1980s. None of Apple’s three signature products (Mac, iPod, iPhone) was exactly original, but each represented a quantum jump over existing products. And each flirted with failure at first, mainly thanks to (Steve) Jobs’s penchant for closed systems.”

“When Jobs introduced the Mac in 1984, it was incompatible with other computers and ran hardly any software; after his dismissal in 1985, Apple veered in the other direction, licensing it to clone-makers in a move that proved disastrous. The iPod struggled for years before Jobs’s executives persuaded him to make it compatible with Windows computers. The iPhone didn’t take off until he finally agreed to open its app store to outside developers—to people like Dong Nguyen, whose Flappy Bird game proved so addictive that he succumbed to guilt pangs and pulled it.”

“Each of Apple’s three inventions became successful only after the company struck a balance between open and closed—between accommodating a wide range of people and keeping them in a carefully controlled environment.”

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Report: Best Buy To Trial ‘Test Drive’

Retail Dive: “Best Buy is trying harness something that’s already common practice among consumers — the concept of buying something to figure out if you really want it, knowing full well there is a decent chance you will eventually return it. It’s perhaps a cumbersome way to find out if a purchase is really worth making, but it has become a culturally acceptable method.”

“With a try-before-you-buy program, Best Buy is looking to divert that sort of activity, and convince a customer who normally would buy and return later to pay an additional fee to rent an item for several days to decide if they really want it. The retailer recognizes that such a fee might not be attractive on all products, and for now seems to be reserving it for a handful of bigger-ticket tech products.”

“The program could also help Best Buy capture a prospective customer’s attention earlier in the buying process while they are still researching a purchase. Amazon has done very well in making itself essentially a shopping search engine to be used by consumers in the earliest phases of their product hunts, and Best Buy may feel it can get in on that action by enticing customers to try products without a full commitment.”

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How Best Buy Engages Shoppers

The Wall Street Journal: “Best Buy, the electronics giant left for dead a few years ago, is bucking America’s retail slump by turning its cavernous stores from a potential drag on its business into a way to fend off Amazon.com Inc.”

“To fend off digital competition, Best Buy gave up efforts to charge consumers more in stores than online. It promised in 2013 to match online competitors’ prices and brought its prices in line with Amazon’s—a move that has paid dividends now that shoppers can instantly check prices on their smartphones … The price guarantee made a loyal shopper out of Anton Robinson, a 34-year-old lawyer in New York City. He buys his music equipment from Best Buy because he prefers to test products in person and doesn’t have to compare prices.”

“Best Buy also found a way to get more out of its giant stores. The company eliminated much of the floorspace once dedicated to DVDs and other media and has given it to brands such as Samsung, Verizon and Microsoft , which both pay rent and provide staff with expertise … Best Buy plans a nationwide rollout of in-home advisory services, in which consultants will visit consumers to field technology questions. Says CEO Hubert Joly: “Having these conversations in the home unlocks all sorts of discussions with the customers. There’s some needs that people never talk about in the stores.”

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Dyson: The Apple of Appliances?

The New York Times: “Not many consumer electronics brands would spend almost two decades — and tens of millions of dollars — building a vacuum cleaner that retails for more than a top-of-the-line laptop. But combining an almost obsessive eye for design and engineering, the privately held Dyson has cornered the nonglamorous market of high-end vacuum cleaners, lights and hair dryers — and in the process bucked the technology truism that companies rarely make money in the difficult arena of hardware.”

“Dyson has shown an uncanny ability to mint money. Its latest robot cleaner, which is selling briskly, exemplifies that and puts Dyson in rarefied company alongside Apple as one of the few tech companies worldwide to consistently profit from consumer gadgets Dyson is moving beyond vacuum cleaners, hair dryers and air purifiers. The company said it would spend more than $2 billion on battery technology, machine learning and other high-tech wizardry to create new products, many of which remain under wraps behind tight security at its headquarters.”

“At Dyson’s headquarters … prototypes were covered in tarps while large areas of the open-plan offices were off limits. Photographs of engineers’ computer screens were prohibited, and machinery in some of the research labs was obscured with black trash bags.” Mario Cosci of Dyson comments: “It’s a little like a brainwashing atmosphere. When you work every day with people who are driven, you can’t swim against it.”

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