Introducing Asymcar

If Apple can have a hobby then so can Asymco.

Jim Zellmer and I were having fun talking about cars and thought why not record our conversations and put them up for others to listen. That’s how Asymcar got started.

Besides having fun, what we plan to do is use the auto industry as a lens to understand how disruption works. Whereas Asymco is a narrative on an industry that is dynamic because of disruption, we hope to make Asymcar a narrative on an industry that isn’t dynamic because of a lack of disruption. A sort of foil to Asymco (or maybe an Asymco Bizarro.)

The approach is to use stories that everyone can understand whether you care about cars or not. The inspiration was the TV program Top Gear which satirizes the adolescence of the male mind, and thus appeals to all. With Asymcar we hope to bring a rich set of new metaphors to describe similarly curious phenomena.

Check out the first Podcast: Tubular exoskeleton-type thing

Apple's 3Q FY13 Preview (Padcast)

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.

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Switcher

Nokia’s Windows (Smart)Phone performance was drowned out last week by Microsoft’s big announcement of the Surface inventory write-off. They are pieces of the same puzzle however.

First, a look at Nokia.

There were 7.4 million Lumia phones sold in Q2 with 0.5 million sold in the US. Although Windows Phones grew sequentially from 5.6 million the previous quarter, and up from 4.0 million in the same quarter last year, total smartphones are down y/y and nearly flat over the last four quarters. This is of course because Symbian phones have finally disappeared from volume shipments. The following graph shows the history of Nokia’s smartphone shipments.

Although it’s tempting to compare Lumia to iPhone (given the premium positioning in the US) the average price of €157 or $206 shows that Lumia is more adequately compared to Android. This is about a third of what Apple gets for its iPhones.

That’s not necessarily a bad thing. Nokia’s always had a knack for mass-market phones and certainly that was one reason Microsoft was attracted to them. Presumably, the promise of the relationship was to insert Windows Phone into the Nokia development and distribution pipeline, squeezing out costs and filling up channels.

Screen Shot 2013-07-22 at 7-22-3.24.21 PMThe problem for the brand has been that although priced at Android levels, volumes are nowhere near and the gap is widening. At current activation rates, Android is selling 16.5x faster than Windows Phone (assuming 90% of Windows Phones are Lumia). Continue reading “Switcher”

High Density #2: Tim Bajarin

High Density is an interview show where we try to articulate what it means to be great. My guests offer observations and insights into the transformation of business and society through technology.

Episode 2: Tim Bajarin

Tim recalls the beginning, middle and end of the PC industry and we discuss the causes of each.

via 5by5 | High Density #2: Tim Bajarin.

What's an Android user worth?

Excluding Motorola, Google’s gross margins have dropped for six out of the last nine quarters. They peaked at 65.8% in early 2011 but have now dropped to 60.4%. Including the drag from Motorola they are down to 57%.

Screen Shot 2013-07-20 at 7-20-9.52.38 AM

Gross margins include the effect of price, volume and direct costs of sales. Although sales have grown (see graph below), the pricing Google has been able to obtain (CPC) has fallen. The cause is unknown but there is a strong correlation between the growth in their mobile channel. For their part, management cites mobile as having an effect in reducing CPC though they caution that it’s one of many factors. Continue reading “What's an Android user worth?”

The PC Calamity

As Intel has improved its products, their demand has decreased. Enormous efforts put into improvements are neither valued nor absorbed. The problem is not with the processors themselves but with the systems within which they are built:

Screen Shot 2013-07-18 at 7-18-11.16.38 AM

PC sales fell again last quarter and the contraction is likely to continue. We received affirmation of this as Intel cut sales and earnings forecasts and the crucial capital spending that creates supply in the longer term.[1]

At the same time, computing device sales have soared.

Screen Shot 2013-07-18 at 7-18-5.07.35 PM

Even excluding Android devices which don’t register with Google’s Play Store (and excluding Windows Phone devices), mobile ARM devices are selling at 2.6 times the rate of Intel-powered devices. Put another way, since the birth of Android nearly as many iOS and Android devices have been sold as PCs.

In terms of install base, a computing category that did not exist six years ago has come to overtake one that has been around for 38 years.

The calamity for Intel has been that they have had no part to play in the new category. Perhaps that is because they had every part to play in the old category.

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Notes:

  1. Intel said it was cutting 2013 capital spending to $11 billion. The cut follows a reduction from $13 billion to $12 billion in April. Apple’s budgeted capital spending for fiscal 2013 (ending September) was set at $10 billion.

"Everybody has got a smartphone"

… says UBS analyst John Hodulik, as quoted by the Wall Street Journal.

No they haven’t.

According to the latest comScore survey data, 98 million Americans above the age of 13 don’t use a smartphone as their primary phone. That’s 41% of US mobile phone users.

What’s more, 2.5 million more people first started using smartphones in the three month period ending May vs. the three month period ending in April.

The switching rate to smartphones is shown below:

Screen Shot 2013-07-17 at 7-17-10.32.09 AM

Continue reading “"Everybody has got a smartphone"”

The Critical Path #92: Microsoft's Critical Path

Horace talks about Microsofts reorganization from Divisional to Functional, and the implications on their Windows and Mobile OS roadmaps. In doing so, he and Moisés touch briefly on the subject of last episode, Scott Forstalls ouster from Apple.

via 5by5 | The Critical Path #92: Microsofts Critical Path.

Understanding Apple's Organizational Structure

Apple has hired a new VP who will report directly to Tim Cook. Paul Deneve is cited as having responsibility for “special projects” and will report directly to Tim Cook.

The previous roles as a manager in luxury brand companies has led to a great deal of speculation about what new projects Apple could be working on that might also fit this new manager’s background and title.

The most commonly cited speculation is around the iWatch or TV product lines (with some surprised that he will not be heading Retail.)

Although reading “luxury product CEO” and concluding “new luxury products” seems logical, a little knowledge about how Apple is organized dispels this notion. And a little knowledge happens to be about all we have, as Apple’s organization is one of its most closely guarded secrets. Even employees at Apple have little idea of how the company is organized. What we do know is summarized into this org chart:

Screen Shot 2013-07-03 at 7-3-3.37.27 PM

Continue reading “Understanding Apple's Organizational Structure”

The Critical Path #91: Apple's Douglas MacArthur

Horace expands on last episode’s discussion of organizational structure, as well as his recent appearance on Screen Time with Guy English. We begin speculation on the job iWatch would be hired to do, and preview the relaunch of High Density.

via 5by5 | The Critical Path #91: Apple’s Douglas MacArthur.

Asymco

Asymmetric Competition

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