What Did Tim Cook Really Say?
[January 2019] Apple’s recent announcement rattled the market. But if you look below the surface, the real message shines attention on innovative content creation handsets, carrier subsidy model options, and in the wireless industry.
When you listen to Tim Cook explain the reasons for Apple missing their earnings forecast, it is frustrating to hear journalists and analysts make statements taking shots at the Smartphone industry and the market, stating that the industry is maturing and innovation is suffering.
The model of the two-year contract and phone subsidy has changed in many cases, and analysts are very confused about the impact that has on the psychology of the buyer and the market. Actually, they did not hear industry insiders say that the Smartphone marketing is maturing and innovation is suffering. That, it most definitely is not.
Some carriers continue to offer post-paid plans, and continue to spread the cost across monthly agreements. From an engineering perspective, today’s handsets are extremely innovative and really are a content creator’s dream.
Swiss Army Phones
Today’s sub-$1,200 handsets can create and render HD footage and effects in less than a minute or two and can produce a package that can run visual circles beyond the capabilities that may otherwise take up to 20 minutes to render back at the edit suite.
Of course that is because the size of the video output is only a few inches high, right?
Not really. You are creating HD content just as you would with your desktop or Cloud workstation, depending on what you are working on or working with, and in some cases, you may even be creating 4K or better video masters. But it is not just speed, it is Innovation – with a capital I.
The whole industry is not changing, its business models are expanding, with more choices than ever before available to consumers. These flagship (brand-new, top of the line) phones may be the ones that will always be attractive to some customers, and upgrades and subsidies are just one way that help ensure that a whole ‘nother industry to is able to essentially thrive now.
A “New” Player
A current buzzword in the cellular industry is VMNO’s – Virtual Mobile Network Operators.
We have a lot to discuss about VMNO’s, a way to optimize your wireless service using technical innovations – something that is helping to bring competition to a marketplace where you may have though your choices were limited.
For small to medium business, and casual consumers, this new business model will make cellular service much more affordable by allowing competitors to compete with the Big Four U.S. cellular companies using their own phones and handsets – or one of the older handsets that cell companies used to offer on their networks.
Apple CEO Tim Cook is aware how VMNO’s work and their potential impact on the sales of new handsets.
Interestingly, he did not mention them as significantly hurting his business model. Therefore, neither innovation of the handsets – like AI built into the cameras to determine the correct camera settings (filters, exposure, ISO, etc.) based on the camera identifying the subject (food, human, etc.) – nor changes that the carriers have initiated in their business models have impacted Apple’s ability to sell new, innovative handsets.
Cook was very specific when he blamed supply chain constraints on completed equipment in China as being the issue for Apple.
Where We Are Headed
In our next article, we will take a closer look at the LG G40 ThinQ handset, The Google Pixel 3 – and other manufacturer’s “Flagship” handsets, as well as VMNO options that include using the Big Four’s resources without paying for the Big Four’s full retail prices.
So, you can see that when Tim Cook says the reason Apple revised its guidance is due to supply chain issues in China, it is exactly that.
It is not because of maturing handsets in the United States, which is banter being thrown around simply to subliminally lower the perception of the value of the industry as a whole.
Of special note to broadcasters, a side effect of this misunderstanding talk is that it hurts the broadcast and streaming businesses that uses this type of equipment to back-up remote broadcasts in the field and create podcasts and remote radio broadcasts – not to mention IFB and live audio reports from the field as required.
Overall, it is not the time to get worried, but to keep an eye on where the market goes, so no one gets saddled with the wrong technology or expectations.
– – –
Mark Shander is a Contributing Editor at The BDR as well as Executive Producer at Today’s Comedy 1260 AM and Good Time Oldies 96.5 FM in Phoenix. You can visit his Website at: www.shander.com