Apple in April 2013: ‘Customers want what we don’t have’

“You’d think a corporate patent infringement battle would be boring — and you’d usually be right, even during the high-profile Round Two of Samsung versus Apple. But, at the same time, suing and countersuing a corporate rival drags out revealing internal documents that the interested public wouldn’t usually get to see,” Liz Gannes reports for Re/code.

“Most of the evidence that has been dragged up is well in the smartphone past, but Samsung also got ahold of four slides from an April 2013 meeting about Apple’s plans for 2014,” Gannes reports. “The slides look just like those Apple would normally show to the public at its product launches, but they tell a less cheery story, showing declining growth rates and including the explicit declaration, ‘Customers want what we don’t have.'”

Gannes reports, “By that, Apple means overall smartphone growth is coming from cheap phones and large phones, neither of which it was selling at the time.”

Apple FY 14 Planning Offiste slide
Apple FY 14 Planning Offiste slide

 
Much more in the full article here.

MacDailyNews Take: As we wrote on January 3rd:

Some portion of [those who want larger smartphone displays than Apple currently offers] are too stupid, blind, or pathologically anti-Apple to have ever purchased an iPhone, regardless of screen size.

This is not to say that Apple, the world’s most valuable tech company, rolling in more billions of dollars than they know what to do with, shouldn’t have a larger screen iPhone available by now. They should. It’s criminal malpractice on the part of Tim Cook that they don’t. The sales Apple have left and continue to leave on the table should have been keeping Phil Schiller up at night for at least the last year.

Yes, Apple should have a bigger iPhone yesterday, but this is just simple logic: Not all phablet owners would have bought an iPhone even if a bigger iPhone was available.

We understand fragmentation. We understand the issues of producing apps that work on devices with various screen sizes (intimately).

None of it matters because too much of the market wants an iPhone with a bigger screen. Developers will simply work harder for the premium customers found on the premium platform. Period.

This omission – not iMacs and Mac Pros that miss Christmas or anything else – is Tim Cook’s biggest mistake to date. Apple should have a bigger iPhone on the market by now, but since, for some inexplicable reason a company with more cash at their disposal than Intel Corp. is worth doesn’t, the sooner the better.

And, as we wrote on January 23rd:

When Apple finally extracts their collective head from their collective ass and ships iPhone models with larger screens, they’ll do more damage to slavish copier Samsung than all of their endless, plodding patent infringement cases combined.

We believe that Apple became infatuated with the fact that only they could produce small, thin smartphones with an efficient OS that could work with the small batteries that these compact iPhones housed. “Nobody else can do such things.” Meanwhile, battery-hogging Android leeches like Samsung slapped larger screens on their phones to hide the fact that they needed significantly larger batteries in order to run for even a few hours (Android phones are notorious for running out of charge).

Far too many otherwise intelligent consumers saw little or nothing of Apple’s considerable engineering superiority (the iPhone 5s is simply the best smartphone anyone has ever produced), these otherwise intelligent consumers only saw iPhone’s smaller screens. They didn’t see Android’s inefficiency or inferior ecosystem, they only saw phones with larger screens.

If we’ve heard from one person who went with an Android phone for a larger screen who in fact really wanted an iPhone – “I’d have gotten an iPhone if only they had a larger screen” – we’ve heard it from a thousand. These are top tier, cream-of-the-crop customers (i.e. Apple’s target demographic), not low information cheapskates. They want to be Apple customers and participate heavily in Apple’s ecosystems, but, for a few years now, Apple has been blowing these sales by failing to deliver the product these high value customers desired. It’s inexplicable; any downsides (fragmentation, inventory management, etc.) are vastly outweighed by the vast sales potential to those who should be Apple customers, but are now carrying a plastic piece of crap from Samsung.

Bottom line: Apple screwed the pooch on this one. Shit or get off the pot, Tim.

Finally, as we wrote on January 28th:

No iPhone with a screen larger than 4-inches – it’s now 2014 – despite a plethora of high-value customers who obviously want to buy one, but have turned to other platforms in order to get a smartphone with a larger screen. Oops. Mismanaged.

One-handed interaction is a concocted load of bullshit attempting to cover for not having a proper lineup of iPhones offering customers varied display sizes at even this late date.

MacDailyNews iPhone screen size poll
Source: MacDailyNews

36 Comments

  1. I’d be more impatient if my current contract with AT&T didn’t last until November, but I sure as hell hopes Apple has a 4.7″ iPhone by then.

    Even with my iPhone 5, I’m more of a two hand user, often holding the phone in my left hand and navigating with my right. The whole one-hand argument is mute because many people including myself use two hands the majority of the time. It really depends on the function. When I make a call or read emails or browse FB, I use one hand. When I play games or type anything, I use two.

    And, many are not as tied to Apple’s eco-system as I am. I can’t believe how many Gmail users there are, and iPhone owners in general who don’t use iCloud. In general, I don’t think Apple does a good job of advertising the benefits of iCloud and many of their Apps. Benefits which are that much better when you use multiple Apple devices – the Mac, iPhone and Apple tv.

    I’ve often wondered why Apple doesn’t use some of it’s mountains of cash to blanket the airwaves like Samsung. Might even be worth cutting their profit margins to lock many users into their ecosystem. Not suggesting that Apple does what Amazon does by selling hardware at break even or a loss, but enough to put even more pressure on the competition.

      1. Beet me tuit! : )

        I don’t know why people are offended that you corrected the proper word use, as indicated by the 3 1/2 stars. It should be five stars. I could see it if it was done in a manner of degrading one’s intelligence which was not done, but to point out the difference so they know better, especially next time where it counts, like on the job versus a post on a blog, you’d think would be appreciated. Word check only catches spelling not proper word choice!

        1. Sure sure, but the point isn’t moot at all — the fact that some or even many people use two hands with the existing phone does not make its design intent (one handed use) a moot point.

          If everybody in the world were somehow compelled to use two hands on a phone at all times, *then* it would be a moot point. As it is, the point is completely valid — Apple’s phone lineup CAN be used with one hand, and at least some people DO use it with one hand at least some of the time.

          So it’s a valid argument. That it’s not universally accepted doesn’t make it moot.

    1. Samsung ‘blankets the airwaves’ because that’s its only card in the deck. They desperately turn to desperate advertising in order to draw in every sucker in town. Oh look, the suckers bought it.

      Apple has never been a marketing company. They’re a creative productivity company. Productive and marketing people don’t mix, if they can help it. That’s one reason Apple hires out for much of its marketing talent.

      1. Actually the biggest growth period Apple had with it’s OS X platform and hardware came amid a huge marketing push on their side. The whole “Hello, I’m a Mac and I’m a PC” marketing campaign surged Apples sales to no end. They were very successful. Additionally for mobile devices, Apple became well known for producing ads that were ‘tear jerkers’ and very endearing; showcasing families and children and the benefits of their products in that realm. So saying Apple has never been big on marketing is negating historical information. They just haven’t been able to strike a good marketing message and campaign since over the last 2 years; since Tim Cook has been at the helm actually. Not sure if that is coincidence or not.

        1. over the long run of years, mr. apple has had a history being a bit creatively challenged, in the advertisement department. (setting aside the original mac ad, the crazy ones and of course the above mentioned mac/pc series (which i feel was the most effective marketing strategy they have ever had – going right to the heart of the microsoft/dell monster and serving it up “coeur flambe’ “)

          time to gear up again, and go for the jugular on samsung – there is plenty of material to work with.

          and maybe get a bit more daring with your products to generate some renewed excitement and interest. seems to me mr. tim has been playing it safe (or sleepy – or hidebound) with incremental improvements that tend to be a bit too incremental (macpro excepted – wow, what a break through product)

          why so slow on the bigger screen iphone?, for example

          there is way too much talent in the organization to be futzing along on an increasingly uninspiring safe path, all the while promising great stuff to come, and then making us wait, and wait and wait.

          might not be a bad idea for apple leadership to recall the tale of the boy who cried wolf and buy a clue.

        2. I stated what I wanted to state. I said Apple significantly hires out for marketing. WHO made the famous and highly successful ads? Not Apple. THAT is the historical information. Apple is GREAT at knowing who to use and when to use them for important marketing purposes.

          So why did you respond?

          One of the wonders of Steve Jobs is that he had a crossover personality. He was incredibly production oriented and creative. Thus his being known as a rabid ‘Type A’ personality at times. He also crossed over into being a terrific marketing wonk. He know how to sell. This is often associated with the ‘Type B’ personality. Having a crossover personality of that kind is incredibly rare and contributed to his ‘genius’.

    2. Your so right on the fact that apple hardly advertises many of it’s great apple only features. AirPlay (should have much larger marketing) things like the Apple TV now streams via Bluetooth, etc. Many hidden features that should be explained and used as features of apples platform are regulated to being “discovered” or “hidden”

    3. I would agree with you. iCloud is great… for everything except email. I get the most spam there and I haven’t even signed up for anything that would endanger me to spam. Additionally when at work or on a laptop scenario where many people get the most out of emailing and catching up to triage their inbox, iCloud email falls even shorter; iCloud through the browser is just bloody slow and awful. The iCloud services like Sync, and app backup, Find my iPhone etc… are great. However most people are tied into Google’s ecosystem for email because the tools offered are just plain better with the email regard.

      1. I get zero spam in my .me email but I use it only for personal correspondence. I use another email for signing into websites, this one gets inundated with junk.

    1. Unfortunately it seems the market and a good portion, if not the majority of consumers would disagree with you. I can’t carry an iPad everywhere but I can certainly carry a phone in my belt clip holster or in my pocket. Additionally if you can’t fit a 4.7 to 5″ phone in your pocket then maybe you should buy pants that aren’t so tight… Even with skinny jeans (which I HATE ugh) people seem to fit these ‘phablets’ in their pockets just fine… now the Galaxy Note series on the other hand is absurd but… we’re not talking that big.

    2. While I agree with your position, the market says otherwise. Everyone wants giant phones. While, I am happy and content with what I have, many want the giant screen.

      1. “it seems the market and a good portion, if not the majority of consumers would disagree with you.”
        “Everyone wants giant phones.”

        To the best of my knowledge, these statements are simply not true – or even close to true. In Samecopy world, huge phones are very much the minority of what is sold.

        1. Please don’t quote something that I didn’t type as if I had typed it. I never typed anywhere on any post “Everyone wants giant phones” (except for just now to explain to you not to misrepresent what I’m saying). I’m not talking about ‘giant phones’.
          As you so eloquently put it in Samecopy world ‘huge phones’ are very much in the minority. You’re right if you’re talking about the Note line of phones. However 100% of their massive sales surges in the US over the last 2 years have been from devices that are between 4.7″ and 5″. So either way people are buying larger phones that what Apple currently has to offer which is the point of the slide made by Apples on sales teams.

          1. Michael Perry – John Smith didn’t attribute his quotes. The first was from you, the second from the post after yours, MacMyWords, which is in fact the post he replied to.

    3. A current size iPhone and a larger screen iPhone are not mutually exclusive. Apple **can** simultaneously sell more than one model.

      It would be a mistake, however, to make only a larger iPhone. It’s time to go the iPod route with diversification. Whether or not one likes the 5c, setting the stage for multiple current models was the smart thing do.

  2. Having seen larger screen mobile phones in use in the wild, I can be pretty sure I’ll never own one. They range from awkward to downright stupid looking. Saw a woman talking into a device about the size of a paperback book. Silly doesn’t begin to describe it. She brought to mind the sort of person who will stretch and zoom their TV picture, no matter the native aspect ratio of the content, just so every square inch of their (oversize) screen is lighted. No style, no taste no tech savvy, just a fool saying “looky, it’s big”.

  3. MDN: One-handed interaction is a concocted load of bullshit attempting to cover for not having a proper lineup of iPhones offering customers varied display sizes at even this late date.

    Two-handed phones are for clowns, from my perspective. But by all means Apple! Make the clowns happy. Please! Think of all the laughter and cheer you’ll bring to the faces of children, like me. 😉

    Meanwhile, I can definitely one-handle a 5″ iphone with no problem. Whether Kiku Yamamoto can use it one-handed is another matter.

    1. Yup you’re right. Going to people who you’d like to spend money on your products and asking them what it would take for them to actually spend money on that said product is dumb. You should just guess and hope for the best… Those declining numbers in Apples on internal documents prove that is a winning strategy. /s

    2. No kidding. SJ invented, or improved all manner of devices and when he was done, we wanted THAT. Henry Ford said “if I had asked people what they wanted, they’d have said ‘faster horses”.

      People only know what is. Visionaries can see what might be. Sometimes they gift us with it.

      1. But remember Jobs did not want any outside apps on the iPhone originally. But he was quick to see he was wrong and changed his mind to allow the zillions of apps now created by outsiders. But his original version was not that at all. A little luck helped the iPhone succeed, it was not all envisioned that way by Jobs.

  4. I never felt I needed a larger screen until I started using my iPhone as a GPS. Anything that can make it easier to read while driving is a safety issue. The less time I spend glancing at my navigation screen means the more time my eyes are on the road.

    I wouldn’t want anything larger than 5″ though. I want a slightly larger screen, not some ridiculous sized phone that l have to lug around and get in the way. Since I got my iPad Air, I find I use my iPhone for consumption a lot less.

    I’ve found this scenario much more practical than lugging around a phablet. I guess I could use the iPad for navigating, but I haven’t figured out a good way to mount it in my Jeep. I’m hoping AirPlay will be available by the time I get my new Jeep in a little over a year.

    That being the case, than a 4″ iPhone is fine. I don’t want to be forced into a compromise, so for now, it would be nice to be able to opt for a larger iPhone. Apple’s strategy has worked until now. With the way things are going, Apple’s hand is basically being forced to offer bigger screens.

    That’ll change for many users like me, who prefer consuming content on and iPad, doing phone calls and occasional content consumption on an iPhone, and have a dedicated integrated large screen for navigating via AirPlay.

  5. Hey MDN, this slide deck came from someone in sales and was NOT official Apple policy or viewpoint. In fact, on the stand Schiller said he disagreed with this deck. Maybe Schiller is wrong but a sales guy at Apple does not equal Apple the company.

    1. Indeed. And are we supposed to think Apple never discusses points WAY outside their central thinking and strategic direction? For all we know, there’s a slide somewhere titled “The Apple Netbook”, the purpose of which was to show what a dumb idea it was.

    2. I fail to see your logic here… ‘Apples viewpoint’ doesn’t consist of just top executives. And these ‘sales people’ also work for Apple, and their job is to protect Apple as a company as well, that’s what they get paid for. Regardless of how religiously Tim, Phil, and the gang think that larger phones are what their customers want, the numbers that were provided from their own sales team begs to differ tremendously. This fact is even more of a reason to lend credence to what has been presented because it shows that the company as a whole is not/was not united in their viewpoint and message. At the top exec level the blinded viewpoint will stay the same as it has always been until someone from the inside convinces them corporately that it should change. It’s not like this hasn’t happened before on many other occasions:

      Apple talking point about cut copy and paste:
      With this touch interface and the way we’ve designed apps, utilities like copy and paste just aren’t needed. People just don’t copy and paste on mobile devices.

      Outcome: Pundits mocked this while Apple stuck to their guns for very long and even customers were ridiculed for swearing by a device that offered less utility. Finally Apple relented and came up with a great implementation which many (including myself) find indispensable in their workflow. Apple execs relented on their religious talking points and gave people what they wanted and it was a win-win.

      Apple talking points on smaller iPad:
      Small tablets are DOA. They are too small to really use appropriately or to really satisfy in their use cases (funny Apple thinking a screen was too small huh?).

      Outcome: Again there was pushback by the market. iPad’s were just too big for some to really enjoy and to use for a lot of cases like holding above your head in bed and reading etc…. People from within Apple even pushed back on this and Apple as a whole was not unified on their message/talking points. Finally Apple top brass relented and listened and the iPad Mini was released. This became wildly popular and opened up the market for people who just didn’t want something as large as the iPad. Consequently this became even more popular than the larger iPad and became a SMASH hit. One review even titling it’s review article “The iPad mini: the real iPad”.

      See a pattern here? Instead of being married to their talking points Apple needs to do a better job of finding market movement beforehand and not after the fact. They need to be proactive and not reactive… Stay ahead of the curve and not just wait until the curve whiplashes around to hit you in the bum.

  6. Actually, the disconcerting thing, is that according to all of the research and UX work I do, the next market for the next generation of almost 2 billion smart cellphone users is going to be in what we Westerners consider poor countries. Apple (and most other manufacturers) have absolutely nothing to compete there and are in danger of losing the next 2,000,000,000 users to other players. You can’t ignore a market that big for too long but that obviously puts Apple between a wolf and a precipice.

  7. “Customers want what we don’t have” after all the millions being
    paid to all Apple Executives! F^%* all who ever are the IDIOTS!
    Time to quit.

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