Opinion

The Great Debate

iPhone 6, Apple Watch and Tim Cook all impress, but questions remain

RTR45KU8.jpg

Tim Cook has had his first Steve Jobs moment.

With Tuesday’s introduction of the new iPhone 6 line, Apple Pay and Apple Watch, the company’s CEO escaped the public shadow of his revered predecessor. Now the question is: Can he deliver in the same impressive fashion?

The early signs indicate he just might. While Apple’s presentations are usually packed with an amen chorus of fans and tech journalists, the details the company revealed about its next line of phones, its new payment processing system and upcoming smart watch gave a clear sign that Apple is not becoming stagnant, as so many critics had feared.

The iPhone 6 and iPhone 6 Plus are almost certain to be hot sellers when they become available on Sept. 19. The 4.7-inch and 5.5-inch models level the playing field between Apple and its larger-screened Android competitors. The processor and camera improvements are impressive. And the user interface changes the company showed off were promising.

Like the iPhone 5c and 5s, though, there’s no question about which model Apple is favoring. The advantages of the iPhone 6 Plus over the iPhone 6 go well beyond the screen size. The 6 Plus’s optical image stabilization (versus less effective digital stabilization) and a significantly better battery life will be strong drivers to the more expensive model, something that should make investors happy.

While the iPhone will be the company’s cash machine, the most interesting — and impressive — part of the event wasn’t the phone — or even the Apple Watch. It was Apple Pay, the company’s vision of changing how people interact with both brick and mortar and online retailers.

iPhone 6: What does Apple have to reveal Tuesday to stay on top?

RTXZQ6G.jpg

It’s been a while since we’ve had a true ‘Apple moment’ at one of its press events. Tuesday’s expected introduction of the iPhone 6 (and possibly more) could end that drought.

All signs indicate Apple plans to come out swinging this time — determined to regain the attention of former customers who have drifted toward larger Android devices in recent years.

That would certainly be entertaining to watch, but it’s not going to be easy to accomplish. To woo away the Android faithful, Apple needs to make Samsung, the leader in Android devices, look outdated — and it needs to amaze increasingly jaded consumers.

Tuesday’s big iPhone 6 question: Is Apple done leading from behind?

RTXZQ64.jpg

For the last few years, Apple’s iPhones have been a little like the U.S. role in the war against Muammar Gaddafi in Libya — leading from behind.

When cell phones were 3G, the iPhone was 2G. When cell phones were 4G, the iPhone was 3G.

When phones got bigger, with beautiful, huge screens, Apple said, “We don’t care, and you won’t either.”

from Breakingviews:

Rob Cox: GE should put itself up for sale

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

General Electric should sell itself. If that sounds like an April Fools’ Day joke, think again. It’s a real proposal on the ballot at the industrial group’s annual meeting. Setting aside the absence of any obvious buyer for the $260 billion company, the proposition illustrates the kind of shareholder democracy gone wild that many boards, and even some regulators, would like to squelch. They have half a point.

The proposal is one of about six that investors put forward and will be up for a vote at GE’s April 23 annual meeting in Chicago. Not all are quite so extreme. One calls for senior executives to hold options for life. Another would end stock awards and bonuses. Naturally, management is opposed to each of them.

Inside the Apple and Google smartphone war

This is an excerpt from DOGFIGHT: How Apple and Google Went to War and Started a Revolution by Fred Vogelstein, published in October 2013 by Sarah Crichton Books, an imprint of Farrar, Straus and Giroux, LLC.

By 2010 Apple and Google were attacking each other on every possible front: in the courts, in the media, and in the marketplace. Android’s surge in popularity was astonishing, and Andy Rubin, Eric Schmidt, and the rest of Google made no secret of their glee. It seemed that every chance they got during 2010 they would expound on how many monthly activations Android had racked up and how mobile devices were going to change the future of Google and the world. In an April 2010 interview with the New York Times, Rubin even predicted that Android was going to rule the entire mobile universe.

The year before he had been worried that Google would abandon Android and that he and his team would need to job hunt. Now he confidently proclaimed, “It [Android] is a numbers game. When you have multiple OEM’s [phone manufacturers] building multiple products in multiple product categories, it’s just a matter of time” before Android overtakes other smartphone platforms such as iPhone and BlackBerry.

Apple: ‘Early adopter’ as fashionista

To much fanfare, Apple announced Tuesday that Angela Ahrendts is resigning as chief executive officer of Burberry and joining the inner circle in Cupertino, California. “Apple-polishing” has become the headline du jour. Picturing the soignée Ahrendts surrounded by geeks in jeans and hoodies, we might be forgiven for wondering why Apple feels in need of a fashionista buff-up. After all, there is hardly a product line more shiny-bright than Apple’s — or one with less affinity to the cold exclusivity of the world’s great fashion houses.

But the extraordinary affection that iPhones inspire is different from the anxious ostentation surrounding high fashion.

However sublime couture may be, it is neither lovable nor practical. Nor does using it feel like participating in a major human advance. There is something wondrous about Apple products in the ease and pleasure they afford their users, connecting us in unprecedented ways to other people, to our surroundings and to the world of ideas.

from The Great Debate UK:

Apple attempts to become fashionable

The UK lost one of only three female CEOs on the FTSE 100 on Tuesday, as Burberry CEO Angela Ahrendts quit. My concerns about females at the top aside, the interesting thing about Apple’s new hire is the link between Apple and fashion and what it tells us about the evolution of the tech industry.

Ahrendts is a smart choice to become the head of retail and online stores for Apple. Firstly, her marketing skills are second to none. During her tenure at Burberry she has completely transformed the consumer experience at the iconic British brand. The stores are beautiful. The central London branches are styled just as well as the brand's catwalk stars; they look more like a high-end boutique hotel in Paris or Milan than a high street shop.

The last time I was in the flagship London store there was a life-size virtual catwalk show going on and what looked like a sculpture wall was actually a collection of accessories, all for sale. The music was pumping, the shop assistants were friendly, helpful and of course draped in the brand and, crucially, the place oozed cool. Ahrendts managed to take a British brand that was once considered the staple of the “chav” and make it covetable once again.

What does Apple really owe taxpayers? A lot, actually.

Even as Apple sizzles in the Senate hot seat for alleged tax evasion and finds itself the object of a Justice Department investigation into price-fixing e-books, the company still enjoys a vast reservoir of good faith with the American people. But if Apple doesn’t reexamine its relationship to those who made its success possible, that well could one day run dry.

Apple is not unique in its attraction to the game of monopoly and tax dodging, but it sure is creative. The firm has helped to pioneer the exploitation of loopholes and the setting up of subsidiaries where profits are stashed offshore through a fantastically complex maneuver known as the “Double Irish with a Dutch Sandwich” which seems to involve, among other things, a mysterious Irish company with no employees. The upshot? Apple pays only 2 percent of its $74 billion in overseas income in taxes. According to Senator Carl Levin, that translates to ducking $1 million an hour.  Surely Apple qualifies for the tax avoidance Olympics.

During a recent Senate hearing, CEO Tim Cook spun Apple’s tax stance as a model of corporate stewardship, explaining that the firm had a duty to shareholders to pay as little as possible. Many senators agreed, including Rand Paul, who offered that the committee should “apologize” for forcing Apple to sit through a “show trial” concerning “a bizarre and Byzantine tax code.”

The dark side of shareholder activism

Shareholder activism sounds so respectable, even noble. The phrase conjures images of good-corporate-governance folk fighting greedy or dysfunctional management in the company’s best interest. While shareholders can be disciplinarians who right the wrongs of abusive directors, many boardroom activists advance some of the most destructive short-term thinking in business today.

Sparring with management is popular sport for short-termists seeking to maximize the value of their assets. The game ranges from venal to honorable. “Don’t let the Elliott Hedge Fund pursue its self-serving short-term agenda and destroy the long term [sic] value of your investment,” Hess Chief Executive Officer John Hess wrote in a letter to shareholders last week. T-Mobile CEO John Legere blamed “greedy hedge funds” after proxy advisors to MetroPCS investors advised shareholders to block a merger with the wireless giant. In February 2012, Apple’s board agreed to majority voting, a once-fringe officer election process that can have unintended consequences and has become more common at large-cap firms. Coincidentally or not, since the resolution was adopted, Apple announced that it will distribute $45 billion in dividends from its $137-plus billion in cash reserves.

In a way, it makes sense that shareholders have become so active in corporate gamesmanship. Tussles between directors and equity holders have traditionally favored internal stakeholders; legal protections for shareholders are relatively weak. Aside from voting out management, alleging a breach in duty of care is virtually the only legal standard for holding officers accountable for wrongdoing. An alternative is litigation, and the number of securities class actions has fallen, though settlements reached $2.9 billion in 2012, around double the $1.45 billion awarded in 2011, according to a report by Cornerstone Research and Stanford Law School professor Robert Daines.

Apple and Samsung’s cone of silence

Apple and Samsung, you might have heard, have spent the last many months in a California courtroom haggling over who violated whose patents. At the end of August, Apple was awarded more than a billion dollars in damages by a jury, and the Samsung is now claiming jury misconduct. Just last week a U.S. appeals court threw out the judge’s ban on Samsung’s Galaxy Nexus phone. The whole situation is, really, turning into a bit of a confusing mess.

Also messy: a lesser-known but hugely important struggle among Samsung, Apple, and those members of the press trying to write about the court battle. While otherwise adversaries, the two companies have joined forces to keep some of the evidence in the case off the public record. But how much secrecy in the Apple v. Samsung proceedings is too much for the public to tolerate? It’s a meta legal question, and one that might not have the same billions directly at stake as the main event. But the outcome of the dispute about the transparency of our courts is central to understanding the future of these big tech trials. And there will likely be plenty more of those.

The question at stake is whether the tech firms will be allowed to tie up the courts with their business disputes while engineering it so they don’t face the full scrutiny of a truly public trial.

  •