Apple WWDC: Should We Be Disappointed?

In order to discuss this issue, I am going to have to channel a Dvorak-like curmudgeon role. Watching Apple and the press/blogosphere fall all over themselves with the rumor mill/speculation market, it gets easier and easier to say “Really, don’t you see what is truly going on?” with the arrogance of an I-told-you-so statement (of course it is especially easy when you don’t put your thoughts in writing until after the events play out). Now when you see more and more journalism today trying to hype Apple news to draw readers, mixed with short-traders dropping rumors to make money, you can’t help but feel guilty watching–kind of like not being able to take your eyes off a really bad reality show.

First of all, while nothing is impossible with Apple, we waste way too much time on low probability rumors, especially what I call the “wishful thinking” rumors. For example the rumor that Apple is moving the iPhone to Verizon or other cell networks is really a small chance. They have contractual agreements to be exclusive with ATT for years yet, so it is not really in Apple’s or ATT’s financial interest to buy out that contract–ATT would expect too much money to be bought out. The financial gain would have to be very high to Apple to take on the legal wranglings to change midstream, and that gain just isn’t there.

Netbooks is another area of wishful rumors. Apple already has their netbook, the Air. Apple won’t go for a low-margin hardware technologies–they have had opportunities in the past and turned away.  The exception is if they can put a new twist on the market (differentiation) that provides a secondary revenue source, e.g. iPods. For example, the early tablet speculation was a poor idea for Apple–tablets already exist and the market for them is not worth pursing. But to have a glorified iPhone OS on a larger screen with a potential revenue stream for extending the app store and fill a niche not being filled, that idea has possibilities. The touch features of the OS make this type of tablet feasible (as long as bluetooth keyboards/mice fill occasional typing needs), but only with an alternative revenue stream. I suspect the too-early announcement of the Kindle DX may have been due to these rumors about an Apple tablet product.

The biggest area of long-time frustration for me is the misinformation on pricing comparison. PC makers have their own differentiation of  low-end computers versus mid-range and high-end computers. Why do they bother with the upper levels, why not just sell the low-end? Because there are features and power that people are willing to pay more. Apple draws a higher baseline of features and power from most PC makers, and because of that PC advocates say Apple is overpriced.  A particular pet peave for me is critics not comparing truly equivalent features and hardware. For example, any comparison between PCs and Macs should include Windows Ultimate upgrade costs–Apple doesn’t sell a disabled OS for their mid-range computers. To make a true comparison, it must include the cost of Ultimate.

Looking at patterns over the years, if you truly compared equivalent hardware/OS to mid- and high-end PCs, Apple has usually been competitive, especially with education pricing–until recently. For the last 9-12 months, Apple has not been competitive–their hardware has been significantly overpriced, enough for some of us to get concerned their hubris with success was going to continue over the long term. This price shift for notebooks announced yesterday has made their laptops much more in line to be competitive in pricing. Note Reassessing the Apple Tax by PC World: Yahoo! Tech.

This price adjustment was overdue and necessary. Apple goes through moments when their prices get a out of phase with the rest of the industry, but the length of this out-of-phase period was longer, and hence it was necessary for them to make a bigger price shift than usual. Many will speculate that the Microsoft commercials forced the price change, but I suspect it has more to do with product update cycle timing. Either way, it is to the buyers benefit. The iMac and tower are still out of whack, but I expect they will make adjustments to those soon.

Many will focus on the additional changes to the iPhone announcements, but quite frankly most of these features should have been implemented before now. Some will focus on the $99 iPhone, which is the just continuing to sell the old phone that is being surpassed by the newer processor and features of the new phones. But all these prices are supplemented by the cell phone monthly bills, so true cost is harder to determine. I was quite shocked they did not release an iPod Touch with this round of iPhones–I find that almost strange. I have seen no explanation in the press yet. You have to expect it soon, but why not now?

While many are disappointed with Apple’s announcements, I am finding the price adjustments a relief. Their notebooks are now in the right range for consideration again by people looking to make new purchases. While the hype-seekers in the press/blogosphere will overlook this event, it really is pretty significant, mostly because it was too long overdue. But the real disappointment is the press not doing a better job of determining the difference between pure speculation, the if-I-were-Apple-this-is-what-I-would-do rumors, and the true insider information. Is the press that desperate, or are they just hiring people too inexperienced to recognize patterns and cycles? Either way, it is way more disappointing than the announcements themselves.