APPLE AND THE WINDS OF CHANGE?

I don’t usually write stories about individual companies, but this hit me like a ton of bricks in the last 24 hours so I thought it was worth touching on briefly.  Now, I wouldn’t call myself an uber tech nerd, but I am fairly tech savvy.  I’m also generally a first adopter meaning that when some new technology hits the shelves I feel compelled to be one of the first users to test it out no matter how much it costs me (stupid yes, I know).  I bought the original Iphone for however much it was outrageously marked up.  I stayed up til 2AM EST while on vacation so I could order the Ipad when it first became available (sad, yes).   So I wouldn’t say I’ve been ahead of the trend, but I am not exactly out of the loop.

I’ve been in love with all of my Apple products over the last 5 years.  And then this past weekend my Iphone started having some issues.  The touch screen was acting up and the power button stopped working.  I had jailbroken the phone and rigged it up in a way that was very specific to my tastes so the thought of getting a new phone was like breaking up with a long-time girlfriend (ironically, my obsession with technology has often been the greatest threat to my relationships or so they say).  But then the screen’s brightness went out and it was hardly legible.  I was driving home yesterday afternoon and decided to stop at the local AT&T store to order the new 4S.  There was no debate about it.  I was getting the new Iphone.  I was programmed to get it and I would rig it up the same way I loved my current phone.

When the sales guy started his pitch about the new Android phones I thought to myself “buddy, I was in sales for years and I know what you’re doing and why you’re trying to sell me the phone that AT&T wants me to buy”.  But I listened.  And then he showed me.  And then when he realized I didn’t care about how much I was going to spend he quickly pushed the most expensive phone in the store.  I thought to myself: “this guy thinks he’s dealing with a total moron”.   And the moron kept listening.  And the moron kept getting more and more interested.

He went through the Samsung Galaxy S2.  And then his partner came over and said I should get the Motorola Atrix 2.  He said it was better than the Galaxy, cheaper and had just arrived.  I was skeptical because I had messed with some of the Android phones before and never found them as user friendly, visually appealing or as dynamic as the Iphones.  So now I was thrown entirely off my game.  It was like I had walked up to the bar to order a White Russian and they were out of Kahlua.  You have to think quick because you always feel like you’re wasting the bartender’s time if you don’t order quickly.  This is how mistakes are made.  But I wasn’t buying a drink.  So I stopped him in his tracks and said: “look, I have this super nerd friend who knows all of this much better than I do.  I’ll be back in 5 minutes”.   So I consult the friend and he tells me he made the switch from Iphone to Samsung Galaxy and that he had heard great things about the Atrix, but didn’t know much about the Atrix 2.  So I walked back in and said “Can I return this thing when I hate it?”  He said yes.  I told him to ring me up.

So, my relationship with the Iphone officially ended and I became an Android user.   And I have to say – Apple finally has real competition.  I’m still learning how to use the phone, but I am incredibly impressed by the Atrix 2 at first glance.  First, the phone is sleek, light and just as aesthetically pleasing as any iPhone.  This was always a major gripe of mine with the first few Android phones.  They were clunky or felt odd.  Not the Atrix.  It’s very light, has a massive display, but doesn’t feel huge.  You barely even notice it in your pocket.

The touch screen experience is every bit as impressive as the iPhone.  This was always another distinguishing feature on the early Android phones.  The user experience via touch was clunky compared to a super smooth iPhone.  That’s all been rectified.  And the screen is crystal clear as if you’re staring into blue ocean water.

As far as the technology goes – the Andoird OS is really impressive.  It’s every bit as fast as the iPhone, but the Android OS has the potential to outmatch the Apple OS.   The voice recognition is a big plus.  And Google’s built-in voice navigation is a huge selling point.  You are basically buying a Garmin GPS navigator for free.  And this doesn’t even mention all the other benefits of the voice recognition such as talk to text and search.  It’s all seamlessly intertwined with Google so the synergies are obvious right off the bat.

The apps are no different.  As far as I can tell, Android has everything that the Itunes store had.  The web experience on Android is every bit as convenient as the iPhone and the phone is 4G so it’s blazing fast.  One strange thing was navigating to a flash website and having video actually play.  It makes a huge difference.

The hardware appears every bit as impressive as any iPhone.   The camera is a monster at 8 megapixels with HD 1080P video.  It has a powerful LED flash and front and back cameras.  The only real weaknesses I see at this point are the battery life and the memory.  But again, you can actually take the back off of your Android phone and insert larger memory chips (~$30) so that’s not much of an issue.  The battery is a problem on most smart phones and if you’re a nerd you just get over it and make sure you have car chargers, office chargers, etc.

All in all, I am impressed with the new phone.  And I think Apple has reason to finally be scared of the competition.  The Android OS has always had the capability to outpace the Apple OS.  It was only a matter of time before the hardware caught up with the software and created the same seamless experience.

All of this makes me wonder if the Apple fad isn’t getting a bit blown out of proportion.  Back when I bought my first iPhone it was unique.  I would find people staring at my phone in public because it was a rare item.  Today, everyone and their mother owns an iPhone.  It reminds me of the Motorola RAZR when it first came out and everyone owned one.   I am not saying that Apple is ready to be crushed by Google, but they finally have some competition.  The days of 20% annual unimpeded growth might finally be at risk.   And that’s the problem with being #1.  There’s only one direction to go.

Before he passed away, Steve Jobs said he wanted to crush Android:

“I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.”

Unfortunately, Jobs passed away before he ever had the chance.  And from my individual experience, it looks like Android has the potential to go thermonuclear on Apple…..

* Disclosure – I have no interest in shares of Apple.  

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • DanH

    Cool anecdotal. Keep us posted on how you like the new phone. I’ll be interested to see if you feel the same way in a month.

  • Pumpkin Knuckles

    You really are a nerd, Cullen. But I approve of your Android purchase.

  • Jon from Canada

    Hey CR,

    If your having trouble with battery life. Go into the settings and change your e-mail/facebook/news feeds to refresh every 2-3 hours and then just get in the habit of refreshing when you open the applications. If I remember correctly the default refresh is every minute or 5 minutes which is a huge drain on the battery.

  • VII

    (ironically, my obsession with technology has often been the greatest threat to my relationships or so they say).

    CULLEN – you better tell them about us before you enter into any further relationships. WE here are a jeolous lot….you are not allowed time away from our relationship frolick around. NO FROLICKING or relationships..you are taken.

    You don’t need them…

  • goodfriend

    CR, i’d like to have your opinion on this since it seems to be a generalised mechanism, that is quite logical given constraints linked to the system we live in. Still i view them as self imposed and “easy/lazy”.

    Here it goes: my understanding is that there was a trial (class action i think) on Apple due to the fact that, it was apperently proven at the court, battery technical specifications were containing this constraints: max duration 3 years !
    All this in order to have consumer renewing their stock. sadly enough it was settled by paying big money to the people who complained and basta…(“cigarette maker like” decision).

    So genious idea ? scam ? obliged mechanism since all peers do the same (i hate this way of justifying your own actions “gee…all banks are ultra levered so my bank has to do the same or investors will sell my equitie bla bla bla”. When kids do it (“i did this because my buddies did too” you go mad but when corporates invoke such arguments, albeit more complexly in appearance, people buy it !

    What’s your thoughts ?

    PS : Call me a teenager/dreamer but on top of this rip off, it is really detrimental to the environment.

  • Different Chris

    I will most likely never leave the iPhone for no other reason than I listen to several podcasts daily, and since I’m an iTunes user the syncing is so damn easy to set up so you almost don’t have to do anything and bam it’s there on your phone and any finished podcasts are removed.

    Cullen, how does the android OS music player compare to the iPhone’s. Just curious.

  • Phalanx

    Thumbs up for replacing iPhone with Android. Apple is more law than technology company these days, I don´t like the way they are fighting with Android..

  • Alex H

    Siri on the 4S has most of the voice recognition you were talking about and it’s pretty good. I’ve also found that the Apple apps you buy are higher quality, altho you can’t compete with all the free android apps. It’s also nice to be able to write programs for your own phone without having to pay aapl for their developer fee. However, once you’re plugged into apple products, they work well together (ipad, iphone, imac, appletv), so when people buy one product they tend to buy more. It’s refreshing to hear someone who has many of apple’s products that isn’t brainwashed.

  • EconFan

    Steve Jobs decision to go thermonuclear was probably because he realized the potential of Android to do to iOS what Windows did to Apple’s PC business. I think he also skirmished with Microsoft over windows.
    But given the current state of the industry, the lawyers and judges will end up deciding based on patent law which is hopelessly behind the times.
    Which is why I am surprised that the Galaxy is sold here but cannot be sold in some other countries .

  • Jonathan P.

    I’m like you, Cullen, been on the Iphone bandwagon for awhile and instead of going with an Android, I decided to buy the 4s when it came out Friday before last. I really like it so far but the features on the Android products really do look enticing: bigger screen, 4g speeds, open operating system, etc. The thing for me is I don’t have any other Apple products beyond an Ipod Video bought back around Christmas ’04 (pretty ground breaking product at the time). If still use PCs w/ Windows since thats what I grew up with. It’ll be interesting to see how the company hangs with the competition without the Oracle at helm of the Apple ship. I agree with you at this point without Steve Jobs, google working alongside phone manufacturers could really leave Apple in the dust if they don’t focus on thinking differently. Time will tell.

  • quark

    I don’t get it within days of Steve Jobs passing Apple holds a investors call and the market sells Apple.

    I’ve had an android for a few years because I’m a believer in a more open source incubating envirionment. While UNIX has always been an attractive feature of apples OS system I simply could not pay the previum, despite the fact the I think Microsoft is the devil incarnated…after all, corporations are citizens.

  • Aaron

    Android music player takes a different approach. Google hasn’t really done much out-of-the-box work on the music app as far as syncing goes. It’s obvious Google felt syncing was on the way out and streaming was on the way in. So they have the Google Music beta which streams your music from Google’s servers (synced to your pc). Amazon also has their streaming app which is essentially the same as Google. A big difference between Android and Apple is that if you don’t like the stock app (camera, music, email, calendar, etc etc) you can replace it with something from the app store. Some would say that’s a plus, others would say “well if you have to replace the stock app, then it’s not any good.”

    As both an Android and Apple user I’d say I prefer the interface and ease of customization of Android, but prefer the battery life and seamless integration of Apple. I’m hoping Google can continue improving the Nexus line which should help bridge the gap between the two different platforms.

  • Dan M

    I have an iphone4, galaxy s2 and a work provided 4s. I like the galaxy screen, 4g speeds and when I want to tinker with widgets and test some apps my friends are working on. However, being in the eco-system of apple with my original touch, iphones, ipad1/2 & apple tv w/airplay, there really is no better overall experience in my day to day life, wouldn’t want to be without it. Apple is a boutique, maybe not by today’s standards, but eventually it will be just like Tiffany’s. As far as competition is concerned, I can only hope Android, Apple and MS go all out because the end users are the ones that benefit in the end.

  • Zeej2020

    Windows Phone 7!!!

    I’ve owned both Android and iOS and Windows Phone 7 is definitely my favorite… however I really don’t use my phone for anything besides calls, texts, emails/calender (outlook), music, maps, and simple search…

    It doesn’t have Pandora which has been a let down, but Pandora and Spotify are coming with the Mango update so what else could you need!?

    Such a clean and simple interface its lovely.

  • Wulfram

    I had a similar experience. When I attended the live blog on the iPhone 4S, it was a shock since everyone was waiting for the iPhone 5 to drop. As you might be aware, I swapped my 3GS for a Galaxy SII awhile back as well despite using a Mac as my main computer.

    The differences are amazing. Web browsing on Dolphin HD browser (check it out, tabbed browsing on a 4.5 inch screen is amazing), drag and drop media through USB instead of syncing through iTunes (a pain if you have more than one computer), multitasking, the ability to customize it as you see fit, not to mention 4G data speeds. When I first tried Android way back when the G1 first came out, I came away unimpressed. What a year or two will do.

    I think the lesson to take away is that the tech world is a very different beast. It is hard to build and maintain moats. Just look at Netflix, they killed Blockbuster and video rental stores in less than half a decade. They themselves will be killed by Hulu, Amazon, Google, and Apple in a shorter time period as declining revenues, lack of pricing power, increasing debt, and a 40% share price drop suggest.

    Although it may be unpopular to say this, Apple itself may find itself in a similar situation. The iPhone 4S was the first product from Apple in a long time that I and many others felt did not raise the bar. Its biggest innovation was better voice recognition, many features which Android already had at the time, and using it as a  voice assistant. I am willing to bet that before Apple’s announcement was over, engineers at Google and Microsoft had already started working on their own voice assistants. On the tablet front, Amazon just dropped a bomb by undercutting the iPad by $300 and upending Apple’s business model by selling the hardware for a loss. Sure it doesn’t have GPS, a camera, or a microphone but what do I need those on a tablet for. I already have a phone.

    I am not hating on Apple. We need companies like Apple to keep America innovating and creating these new markets. But if Cullen Roche — who just a few months ago argued that Android wasn’t as good :) — can be convinced to switch and even argue the other position, it’s hard to see how they stay on top.

  • Fred

    I unloaded my shares over the last two weeks precisely because AAPL is now playing in the domain of large numbers and competition is going to stress margins as well as the need to deliver the ‘wow’ factor in the form of EPS headline growth. It was a tough decision with a cost basis of $119. Here are some metrics: AAPL has never paid a divvy nor purchased a single share and yet gets a 15x TTM, whereas IBM has been buying 10% of its shares back for three years and pays a 2% divvy. Granted, yes, the FTM has been in AAPL’s favor but they just told us that they are focusing on top line growth at the expense of gross margins. So, kiss that 42% gross margin and expect to see it come down. That is going to slam FCF and while it may or may not show up in the EPS (AAPL is exceptionally good at manipulating earnings), any FCF valuation will leave the stock seriously wanting at these levels. My target for re-entry is $250 to $300, depending on what we see over the next few quarters. And this doesn’t even touch the $81 billion sitting in T-bills nor the fact that it’s been under heavy distribution for a month.

  • Sixx

    The macro-irony: Apple users are like the neoclassical/Austrian economists, stuck to the old ways that have been unchalleneged but engrained into the masses due to the horse blinders pointing towards the commonly accepted. The blinders are off now… and like MMT, Android is gaining momentum. Simply a better fit. Apple’s need to ‘lock’ people into their closed-source system (music, O/S, etc.) may be their downfall if they don’t change. The world is going open & shared, Apple must adapt to this shift or it will become a relic… like RIM. :)

  • http://www.chpc.biz Brian Ripley

    I am closing down a 10 year business of providing inexpensive web management services to 200 clients… http://www.2358.ca

    Why? Too labour intensive and why compete with:

    Free websites, free hosting, free domain registration, free video, free music, free mapping, free analysis, free news, etc etc etc… also labour rates for IT service and support can be had for free or at very low cost subscription rates.

    I suspect that Open Source technologies will expand dramatically in the next 5-10 years and proprietary technologies are going to lose market share.

  • VII

    Speaking of winds of Change….Shut the Front Door!!!!

    Did you catch Rosie this morning…..DID HE REALLY SAY…”and what about the end of the Great Bull Market in Bonds?…it could com pretty soon. You heard right.”

    OMG!!!!!!!!! forget iphone….Willy2s gang of bond vigilantes better load up on some bullets, canned beans and maps. There about to ride….ok not exactly but CR-this is preatty big news.

  • Different Chris

    Too funny.

    I haven’t seen Willy2 or Ocean in a while. Kind of starting to piss the never ending circular arguments….

  • Different Chris

    miss* not piss.

    Really earning my avatar today…

  • making sense

    I am an atrix user and I am happy with the phone. However, the only thing that bothers me is there are several applications I like that are available on iphone but not available on android (or not good enough). namely cnbc, bloomberg on demand, and pbs. Hopefully those companies will eventually write decent apps for android too.

  • jswede

    Cullen, you are comparing a 15mo old iPhone to a brand new Android phone.

  • http://www.pragcap.com Cullen Roche

    I have a huge music database and when I downloaded the Motorola Media device I was concerned. It was buggy and not user friendly. But then I explored the app store and found a number of different apps that sync to iTunes. Google is also developing Music Beta which is basically going to replace Itunes on their phones. After a bit of learning it’s all turned out to be just as simple as iTunes. This is another cool thing about the open source app platform. You don’t have to use all the garbage that Apple forces you to use. There is literally a market of options.

  • Pumpkin Knuckles

    ” Open source or you will get murdered by Android…..And make a deal with Adobe for Christ’s sake…”

    This. I don’t mean to take anything away from Jobs, but I always saw him as a control freak. And whatever issues he had with Flash was the tipping point for me. Enjoy watching videos on your new Android. You’ll never look back.

    FREEDOM!

  • Dee

    Welcome to the darkside. You should be rooting it in no time! I love my droids. :-)

  • VII

    Is that why you left me Trixie and keep changing your name “..a control freak”.

    I don’t think Cullen having a girlfriend is good for the TPC. You have that time commitment thing, possible future wedding etc. All things that take away from the TPC. She’s going to break your heart Cullen…and don’t come knocking on my door to sleep on my couch again.

  • http://www.pragcap.com Cullen Roche

    Trixie will take care of me. I know it.

  • MTM

    Those who cannot remember the past are condemned to repeat it… George Santayana

    It is truly amazing to see Apple making the same mistake it made years ago that gave Microsoft the ability to own the intelligence that ran most of the worlds computers. Jobs had the ability to go “open source” yet did not… amazingly Macbooks still crush everybody else IMO… My college sophomore is religious about his Macbook Pro, yet uses an Android phone, as does my 12 year old daughter…

  • Pumpkin Knuckles

    I left you because you weren’t a finalist in the Publishers Clearing House contest. We’ve been through this, I DO have my standards, you know.

  • Pumpkin Knuckles

    See above or below comment (however the HELL this comment system works…Nazis, ALL of you!) to VII. There are no exceptions.

  • Octavio Richetta

    CR, in my humble opinión, you are 100% right. I used to be an early apple lover. Did my PhD thesis on an SE 30. Then, was forced to move into windows machines when I started to teach and do consulting work. i came back to apple with the iPad 2 and I am not happy at all! I find it too restrictive for a computer literate person. To me, apple is a short at these levels (I am not short) though I am short the sp500 via Jan 1200 puts. Gambled 3% of my portfolio to gain 100% short exposure that has a three month lifetime…

  • AWF

    We are: What we do and What we say and What we use

    Unprofessional to use an Android phone–it is stolen technology

  • Ben

    Apple, I believe, is making the same mistake that it did with its PC business in the 80′s: They kept it wall-gardened.

    Microsoft came to dominate the PC OS market, and Google is about to do the same.

    The wisdom of many will eventually surpass the genius of a few.

  • stpepepr

    The iPhone’s edge is -still- software. Because developers only have to focus on 3 phones(4S,4,3S), they can optimize their applications to their specifications, while for android you have to think about hundreds of phones. It’s no coincidence that skype for iphone had video calling for a long time while android users had to wait a long time before they got the video calling feature.

    The problem with apple is that it releases one phone every year, but there’s hundreds of android phones released at the same time. And they just keep getting better and cheaper. While you can only have one flavour with the iphone, you can have hundreds of different flavours in Android, and customization is way easier.

    http://www.engadget.com/2011/08/16/xiaomi-m1-with-miui-os-a-310-phone-with-1-5ghz-dual-core-soc-a/

    This android Chinese phone is half the price most high end phones and can match or top their specifications.

    There’s another Chinese phone coming in December, the Meizu MX, which will be the first Quad core phone ever released(Quad core is mostly for bragging rights at the moment. Even Dual core phones don’t offer that much performance improvement because there’s no enough game…I mean, productive applications optimized for dual core processors)

  • Wulfram

    If you want a Google Music invite, I have an extra invite for you. It is pretty sweet for people with large collections.

    I keep most of the songs I’m currently listening to on a daily or weekly basis on a removal micro SDHC card (32 gigs for $40), and the rest in the cloud. It’s also super easy to move files back and forth since the phone just shows up as a USB drive on your computer. As a bonus, if you use a DLSR or point and shoot camera on a vacation, you can plug the memory card into your Android phone and email the photos right away.

    Once you go free and to a bigger screen, there’s no going back.

  • ogd

    Cullen — as a Googler, thanks for the nice words and your hard-earned money :) I respect Apple as designers and engineers, but I don’t think they can compete against us in the long term, not with their current approach. I’m not saying they’re going the way of Nokia, Rimm and Palm, but they’re losing the phone battle for sure. The “stolen” thing annoys the hell out of me every time — as if Apple somehow owns the idea of a touchscreen phone that has good developers, sane marketing and an app store, because that’s all there is to it.

    Also, y’all should see the new Nexus, it’s a thing of beauty (I don’t have one yet, but soon).

  • http://www.pragcap.com Cullen Roche

    Not a google issue, but I did just run into the first major annoyance with this Atrix 2. The phone is advertised as having 8GB of storage, but that doesn’t apply to photos and music. The card that comes with it has a pitiful 2GB of storage. That’s nothing short of absurd. So I am buying a new 32GB storage card for an extra $50. Not the end of the world, but definitely irritating. I have no idea how companies can release phones without thinking this sort of stuff through….75% of the memory smart phone users need is for music and photos….I should have been more skeptical of a Motorola phone. I’m sure it will be great once I get the 32gb card, but man this is annoying.

  • hoops

    I beg to differ. It is all the androidians that are like the Austrians or neo liberal economists stuck in there outmoded old ways of thinking. Only Apple and Steve Jobs were able to create something new like MMT and overthrow the old way of thinking. How soon you all forget how crappy smartphones were before the iPhone. Just like how crappy PC’s were before Macintosh. Android is a copy cat platform and as a result will never be as good as the iPhone. If it dominates it won’t be because it is better or more innovative, it will be because it is cheap and ubiquitous and does just a good enough job of copying Apple. It is the platform for the cheapskates and tinkerers who think they are getting the real thing but really aren’t. Enjoy your viruses suckers.

    It is just like the Neo liberals adopting some Keynesian ideas or the latest Chicago school fad because that is the latest in economics and they can get their papers published. They don’t come up with anything new, or that works very well. They just copy and incorporate the greatness of others, while at the same time diluting and destroying that same innovation in the process.

    Apple iPhone =MMT Android = Neoliberal economics

  • hoops

    Flash is shite. Jobs was right on that score.

    And FREEDOM? The freedom to sell your eyeballs to the highest bidder. Google is an advertising company, they don’t care about freedom, they sell your eyeballs for money.

  • Pumpkin Knuckles

    Ok, whether I agree with you or not is completely irrelevant. Selling eyeballs for money? I am TOTALLY down with that. I just wish it made it into Obama’s jobs plan.

    I love you.

  • Pumpkin Knuckles

    And? I can’t believe I didn’t think of that first.

    I hate you.

  • hoops

    As a “Googler” you SHOULD be ashamed because you ARE thieves. The Android is as pure a ripoff as you can get – that is pretty apparent. The reason Steve was pissed is because Eric Schmidt had inside info on the iPhone being an Apple board member then turns around and breaks that trust, with a blatant ripoff product that Google gives away for free.

    If the Android had to actually compete as a “selling” product and the Handset companies had to license it for a reasonable fee it would have failed big time.

    Google would not have even entered the business if it hadn’t been for Apple’s innovation paving the way inventing new interface paradigms etc.

    For a company that purports “Do No Evil” as it’s motto, maybe it should invest in some ethics classes for it’s thieving employees who get bothered when a dead man calls them on their BS.

  • Bond Vigilante

    I like the word “”garbage”” in combination with “”Apple””.

  • Gordon

    missed points -

    1. Android’s tight integration with Google Services (Gmail, Chrome, Finance, Docs, etc.) is critical.
    2. Android’s diverse hardware allows customer to CHOOSE display size, keyboard etc.
    3. Android’s customizable GUI allows customer to CHOOSE how they want their phone to look (widgets, wallpaper, etc.)
    3. Android’s open platform allows more partner innovations. see MightyText, etc.

  • Octavio Richetta

    Wish I could add 32gb of storage to my iPad 2 at any price:-)

  • Blobby

    Welcome to freedom from the mind numbing world of the apple.
    As you say the only way is down for apple. First to market with a closed product.. But in almost all cases the open technology will win, less barriers to entry and innovation.

  • RobertM

    re:”The voice recognition is a big plus. And Google’s built-in voice navigation is a huge selling point.”

    Yes and yes! I can’t type very well with my big fingers and voice recognition is the killer app. Love the free navigation as well. I’ll take features over looks all day long.

  • Anonymous

    “…the Apple apps you buy are higher quality, altho you can’t compete with all the free android apps.”

    I can’t compare every app, but I think you’re right that developers obsess more over quality details on the iPhones, while they take more of a “what do you expect” attitude with Android apps. (I saw some market research that suggests a developer might get about 3¢ worth of ad revenue from a typical Android app; only a few ever come close to repaying the programmers’ efforts.)

    Spending $1.99 on an app takes a couple minutes of my after-tax; if I use the thing more than an hour total, I’ve probably recouped that in being better able to get something done. Especially in weak coverage areas (like the conference room we were in yesterday), an iffy signal can crash an app that needs to connect in order to get an ad. Really aggravating for the guy next to me.

    I don’t understand why people pay hundreds for a phone, contract for thousands of dollars of data service, and then risk the “penny wise, pound foolish” syndrome by buying crap apps.

  • Walt French

    Cullen, I’m the de facto support guy for several friends’ iPhones usage. Not one has ever mentioned inability to turn it off when it crashes. The power button problem you mentioned hit one person, and the store guy replaced it, no questions asked.

    Of course, only one of my circle has jailbroken his iPhone, and he did so not so much to download dodgy apps as simply to get it onto T-Mobile.

    Just because you like to hotrod your wheels and the result isn’t very stable, doesn’t mean that the phone itself doesn’t work fabulously well. I’m mostly collecting new ideas for apps that my friends have discovered and really like.

  • Craig

    Android is a direct rip off of Apple and oracle technology. Merely to preserve the potential for ad revenue,Google gives this software away for free to foreign companies. Google stole tech from oracle and apple and gave it to Korea. Now cheap android clones crowd the market undercutting the people who developed the technology. This is criminal and anti American. Copyists should be ashamed and shut down. Anyone buying this technology should consider buying American and support creators not copyists. Those that think that apple is in trouble only need to look at profit. Apple has 10 billion in cash flow per quarter with only 5% of handset market.

  • Sandflea

    What about when that 16 year old Eastern European nerd / hacker pushes the button on the open source phone?

  • fauxscot

    Apple owns the supply chain. They make their own processors and have locked up pretty much most of the flash capacity out there.

    Android and Win7 boxes may compete, but not with empty flash sockets.

    Besides, have you noticed what Android/Win7 is copying? iPhone. Not the other way around. Oh… and their products are profitable. All of them. Very.

    Better designers, better architects, better manufacturing, pretty good products, loyal fan base, tiered and integrated product line, retail establishments, excellent customer service; Average Joe cares about these things.

    I think it’s a stretch to call this peak.

    Just keep in the back of your mind: There has NEVER been a company of this size, growing at this rate, this profitable, this innovative, in a market as unsaturated as this, with such anemic competition that is this far in front of everyone else. Add to that that they have more cash on hand than the revenues of all but the top 25 of the Fortune 100. Last, they just sold 4 million phones in 3 days. ASP of those phones was $600 US. That’s $2.4 billion in revenue.

    In 3 days.

    3 days.

    Yup, they are on the ropes all right. And Nokia and Google and Motorola are surely going to prevail.

  • Craig

    Apple currently has the number one smartphone, the number one laptop, the number one tablet, and the number one desktop computer. That’s right, number one. Better than HP, Or Samsung, Or HTC, or motorolla. Yeah if you combine every android manufacturer together they sell more phones than the single company that is apple. But on an individual basis Apple is number one in sales and profits. People are willing to pay slightly more to get the best. Apple provides the best ecosystem and user experience for most people. Now if you are a geek looking to test your new program you just wrote, well yeah maybe you would be better off with an android device. But for 90% of Americans I would think that Apple would be the best choice.

  • Major

    How do u lik SIRI on android?
    Ml

  • Pete

    I had a lot issues with Iphone and ipad, mostly the videos. I cannot see the video posted here and other places on iphone or ipad. I made switch two or three months ago. I was awake at 1:30 am to order the ipad2 when the apple store first opened. It sounded like the Adobe flash player will be out, but many still use it. Android device works nicely with those videos.

  • Beatrice

    I’d rather pay for products of the company that has been more innovative to support them to continue with developing really innovative products/OSs/software/combinations of all…

  • Roger

    The first tenet of investing is that all stocks are bad stocks, even the ones that make money. The second tenet is to never fall in love with a stock.

    So, my son (a newly minted college grad who managed to find a job) decides that he’s leaving the family cell phone plan. He got tired of waiting for my wife to add data capability. After some pretty impressive research he decides on a Sprint plan, and the phone he wants is (what else?) an iPhone. After visiting the store twice, talking to me, and again doing quite a bit of research on his own he walks out with a Samsung Galaxy (Android) phone. He said it wasn’t even a contest. Part of his research was to snag a Google Music account (still don’t know how he did that), where he found that one of the first options is to upload all of his music in his iTunes database to Google’s Cloud. A simple YES and several hours later it’s done. Another free download from the Android App store and he has all his music at his beck and call with no memory constraints imposed on his phone, and he has finally divorced himself from rather clunky and restrictive iTunes.

    I believe that we’re witnessing the Mac/PC contest, closed versus open architecture, all over again. And you know how that one turned out. Anyone who made a lot of money on AAPL on the upside could perhaps make just as much on the downside if they short it.

    I’m just sayin’.

  • john

    My wife has a new Galaxy and I got the iPhone 4S on my latest upgrade from AT&T. After playing with the 2 phones side by side, there is still no comparison. The IPHONE is a Porsche and the Android phone feels like a Mustang. Of course many prefer mustangs, but in the end, the Porsche wins hands down. The iPhone is a much smoother experience and much faster with almost every task. The problem with google is they keep following. Apple already has the IPHONE 5 in development which I am sure will be another mile leap ahead of Android. Time will tell, but the 4S is not even in the same ballpark as the Android phone. I think for AAPL, the biggest hit is yet to come in there takeover of the television run by Siri, we should see this in late 2012. I think this will be the largest money maker to date and really there encore, after that hoopla it may be time to sell your AAPL longs. Of course if the market tanks, p/e’s will come down across the board and stock prices with them, so to determine stock prices based on actual products and profits is futile as anything over a multiple of book value is always just guessing what price somebody is willing to pay, and that is determined by the excess cash flow from the household and their current tolerance for risk. So, while these articles are nice, they should be taken for what they are, an opinion that has no market price relevance but merely tech talk.

  • Bruce Porter Sr

    Good grief, you applefans are a goofy bunch. Do you pray toward Jobs birthplace 5 times a day or something.
    Look, these things are TOOLS. Nothing more, nothing less. Get the one that does the job you need done the best.
    We have Androids, iPhones, and a windows 7 phone because my wife needed internet explorer. They all work fine and do the job.
    Which one is “best” that, like beauty, is in the eye of the beholder.
    I’ve never met Gates or Jobs, from what I know about them I don’t think I’d like either one of them. However, I do repect their work and what they accomplished.

  • Dismayed

    “Android is a copy cat platform and as a result will never be as good as the iPhone. If it dominates it won’t be because it is better or more innovative, it will be because it is cheap and ubiquitous and does just a good enough job of copying Apple.”

    Gee, that sounds exactly like the argument that people used to make about Japanese cars. Now we have Acura and Lexus . . .

  • http://www.pragcap.com Cullen Roche

    Aren’t all technological advances a copy cat of some sort? How many people really come up with a truly original idea any more? Innovators essentially just build off of other people’s ideas, but for some reason there is this myth that entrepreneurs and innovators achieve everything on their own. As if there was no evolution in their process or thought…..

  • Dismayed

    I’ll go with a Win 7 phone. I currently have a Zune player, and it’s excellent. And it includes a high-def FM radio. I’d love to have a phone that will bring in radio stations.

  • Different Chris

    “After a bit of learning it’s all turned out to be just as simple as iTunes.”

    Eh, I guess I’m just a little too lazy. I have no problem with android phones, and I actually convinced my father to get one (he hates not having control over a choice of options), but I’ve always been happy with the iPhone because I love how it ‘just works’ out of the box.

    The stuff Apple forces on you can be annoying, I agree with you there.

    As for Adobe & falsh player- I could be wrong, I’m not uber tech savvy, but my understanding was that Apple has basically thrown their weight behind HTML5 and once its used commonly it *should* be a death nell for Adobe’s flash player.

  • Different Chris

    Just popped over to BI for a chuckle and saw the title they put on this piece.

    Ridiculous.

  • In Accounting

    Cullen, quick tip, having tried most of them, the best way to use iTunes with your android phone is through “iSyncr”. There is a wifi version as well for wireless syncing with itunes. You will want a replacement for the music app as well. I like “PlayerPRO” because it supports syncing my song ratings and playcounts back to itunes, and the music widget for it is actually pretty decent.

    Enjoy!

  • Adam2

    Regarding podcasts on iPhone. I use Stitcher. It has gotten better and better and I no longer use iTunes for it. This is a good thing.

    Is Stitcher on Android?

  • ogd

    Hi Cullen — we’re not responsible for Motorola’s decisions… yet. If you ask me we should get rid entirely of the separation between memory for apps and photos/music, but the UI for that probably gets complex when you have SD cards to worry about too. Enjoy your 32GB.

    As for the @hoops rant — oh shush. Embodied in any smartphone are about a billion ideas new and old; it’s ridiculous to single out, say, pinch-to-zoom , and say that Apple is entitled to a monopoly just because they were the first to make it work well in a phone. They extracted a lot of value from their ideas and execution as it is, being the world’s most valuable company and all. And it’s ridiculous to call anybody a thief for implementing UI conventions first developed in the 80s.

    And tone down the Steve Jobs worship already, he was a great man but trying to shame Google with his words from beyond the grave is a bit much. Stick to what’s real, it will help you in this investment game.

  • hoops

    That’s the problem with most of you who don’t understand Apple or Steve Jobs. It is a TOOL but it is also something you use every day. If we don’t have people or companies like Jobs who care about the nitpicky details of interface and design and trying to make a perfect experience the world will be a sea of crap devices.

    If Apple hadn’t set the bar nice and high we would be just seeing a bunch of crappy RIM clones in the marketplace and we might have gotten somewhere near iphone of today in 10 or 15 years. Just look at Symbian, Windows Mobile and RIM and that is what you would be getting if it weren’t for Apple showing the way.

    I don’t want to see a replay of the PC story. That set the world back 10-15 years in technology adoption, they had to wait that long to get the tech that NeXT had working in 1988.

    It is also about reducing complexity. SJ was always about simplicity and cutting shit that doesn’t need to be there. This is important for a mass consumer product and is why the ipod was so successful and why the ipad will dominate home computing. It is computing for your Grandma.

  • Greedsgood

    Nice topic, and one of my favorites as well. I’ve been an iPhone user and am ready to order the Samsung Nexus S (although the Atrix2 ain’t a bad choice, or Droid Razr)

    In my opinion, it’s all going to come down to the paid content and the cloud – music, tv/movies & apps. Once you buy into an “ecosystem” and commit yourself to the hardware/OS, and more importantly their paid subscription services and cloud-storage, it will be hard to leave. Advertising (paid-search, etc.) could subsidize the hardware and content at some point (ala cable tv)

    As I see it, there are 4 key players, which I’ve listed in order of how I think they ultimately rank in terms of success:

    -Apple/iTunes/iCloud
    -Google/YouTube
    -Amazon/Netflix (they could buy??)
    -Microsoft/xBox/Skype

    Facebook will likely partner with one (not Google) and help drive the ultimate success (maybe MSFT via the Skype Integration)

    Apple has a nice lead on the hardware end (but Android is closing)and iTunes, but lack the all you can eat content model. Siri is a nice addition and should be a direct threat to Google’s monopoly on paid search.

    Look for the next big thing for these 3 to be the living room and television. I’ve heard that AAPL has a patent on a 3-D TV (holographic) which requires no glasses. If you include the content (tv/movies), web surfing, video-conferencing and integration with all you other cloud content and other devices, you have a winner. My bet is still on AAPL given their warchest of $85B + in cash and the ability to go out and partner or buy the content to monopolize the industry. As Netflix has shown, the content companies (ie. Starz) are beginning to wake up and see that they hold alot of value in the new cloud paradigm where exclusivity to content can provide the edge.

  • Dexter

    And now Kindle has taken a shot at the IPad with the Kindle Fire…significantly cheaper, and totally content oriented (something that Amazon is at least as adept at as Apple). Steve Jobs has been the technology Prima Donna for a long time, but my bet is that Jeff Bezos (and Amazon) will have an even greater impact on the long term future of Apple than anything else…

  • gaius marius

    the adobe thing kills me. i bought an ipad in spite of being an android user/supporter (droid x — about time for an upgrade LOL) largely because there was then no comparable android tablet.

    as silly as it is for phones not to run flash these days, for a tablet it is an unforgivable sin. it’s so aggravating that i’m dumping my ipad for a newfangled android.

    i’m sure once, someday, HTML5 is settled the whole thing will be moot. until then, though, i rather agree with you Cullen. steve jobs was lauded for his refusal to compromise for years, but that is in fact a double-edged sword — and one that may well be used to kill apple.

  • Sandy the Swede

    Re: Apple vs. PC

    I recently sold my iPad2 to my niece. What I didn’t fully grasp when I bought it was that the iPad really isn’t a tablet computer. It is an entertainment device. I realized too late that I needed word processing and occasional spreadsheet power. If tablet = computer, iPad ain’t it. Setting up directories to organize documents? Fuggediboudit. Where is the UBS port to stick in a thumb drive. Oh, want to transfer photos from other devices? Just use iTunes – yeah, that’s user friendly (there may be another way, but this is what my Apple-lovin’ tech-savy son told me to do). To be fair, I will miss some of the cool apps. Yes, I hate MS, but better the devil you know (how it works).

  • http://www.pragcap.com Cullen Roche

    I have found that the ipad is really a reader. If you read a lot then it’s fantastic. I read a ton so I am in love with my ipad. But I only recommend it to people who read a lot. Otherwise, as you noted, a laptop is what they need. If you want your kids to be distracted buy them a soccer ball. :-)

  • Greedsgood

    I have a hard time with keeping two devices in mind and in sync. so I’m jazzed to see the new Android phones come to market now – like the Samsung Nexus with a 4.7 inch HD display and ultra-slim design.

    http://www.google.com/nexus/

    Slides nicely into a pocket, yet big enough to do some fairly serious reading and web-surfing. The Android 4.0 looks promising and more “Apple like” in terms of the UI>

  • teomax

    I bought my first inteligent phone recently and i am really dissatisfied with it.
    If guys at Android would had a clue and wanted to have bigger market share, they would sell their Android OS with some easy system (like old Nokia phones have) enabled.
    Android is for geeks, not for regular folks.Me, as computer guy, 12h behind computer every day, I am really bored trying to customize my phone .
    I have better things to do…

  • glenR2112

    Your missing the importance of the 4S.
    Siri is a disrupting technology.
    Sorry Google, you’re done.

  • teomax

    and my last rant is, that my “intelligent” phone (htc wildfire s} doesnt even have working alarm, when its switched off. even your 1998 phone had it, LoL.
    sorry guys for bothering you with my stupid rants

  • Greedsgood

    As a gimmick, Siri is a sweet application. But Google has had voice recognition for iPhone/Android for 2 years and does not have the “busy server” issues that AAPL is experiencing. Definitely a plus for Apple and threat for GOOGs monopoly search business, but hardly a destroyer and not unique to AAPL.

  • hoops

    You should have held on to it for a bit longer. You can do casual word processing and spreadsheet stuff using the Pages and Numbers apps from Apple, $5 each I believe. iOS 5 introduced wifi syncing and printing and now with iCloud you can automatically sync and share your documents over the cloud.

    Apple is moving away from the file directory structure, it will all be hidden from the user. Your apps will see all the documents they can access or have created thru the app. Search will become more predominant and metadata filtering will become a big way of accessing the files. This is the way things are starting to go with iOS , Lion and with apps like Final Cut Pro X and Aperture.

    Files, folders and understanding directory structure are actually too hard for most people to grasp. Hard to believe if you’ve used computers for a while, but unfortunately true.

    That said, the iPad is for casual computing (reading, viewing, listening, surfing, doing email, facebook etc.). If you need to do a lot of work on it you are still better off with a laptop.

  • http://www.investrac.com Tony Henfrey

    Perhaps that explains what the stock price is telling us ihttp://www.investrac.com/blog/apple-to-under-performs

  • hoops

    teomax

    Sounds like you’re a perfect candidate for the iPhone 4s. “It just works!”

  • pk de cville

    iTunes Match will change everything. It’s a shame you won’t be inside the walled garden for this one.

  • OTS

    Cullen,

    It has been over a week. How are you liking the Atrix? Are you considering going back to the iPhone?

  • EB

    I ordered one today hope to have it set up and working by Wednesday. I was going to just order the 4S for durability concerns and the fact everyone I know loves theirs … but there is a 2 to 3 week wait and it’s more money. The Atrix 2 they waived activation ($39) and it cost me $79.99 from Costco with a car charger and case … and it’s available from Amazon Wireless for $49.99. So with the stellar reviews of this phone I thought it was the right move. I can’t wait to get it.