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Tim Cook admitted Tuesday night that smartphone sales may shrink and, significantly, he's OK with that
Samsung's new Galaxy Tab S4 tries to beat the iPad at productivity
Facebook and Instagram now show how many minutes you use them

Tim Cook admitted Tuesday night that smartphone sales may shrink and, significantly, he's OK with that

Posted: 01 Aug 2018 07:48 AM PDT

Apple CEO Tim Cook.REUTERS/John Gress

Apple CEO Tim Cook admitted iPhone sales might shrink on his earnings call on Tuesday.
It is jaw-dropping to hear Cook say that he would be OK with iPhone sales in decline.
What's really going on? The installed base of Apple devices is growing by double digits.
Because of that, software services revenue could soon overtake iPhone revenue.
Apple is entering a new era. It is changing from a device company that also makes software into a software company that also sells devices.

Apple CEO Tim Cook admitted on his earnings call last night that he will be OK if the iPhone market "shrinks." He's comfortable with that because "it's a great market because it's just huge," so a loss of one or two percentage points in sales doesn't really matter.

It was a throwaway line in a longer discussion about the role of software services — apps, TV, and music, etc. — that now drive Apple's revenue growth.

But for those of us who parse every Cook statement for hidden meaning, this was significant. Cook has never previously said he would be OK with declining iPhone sales. Here were his words, emphasis ours:

"I think the smartphone market is very healthy. I think it's actually the best market in the world to be in for someone that is in the business that we're in. It's an enormous sized market and whether it grows, from our point of view, whether it grows 1% or 2% or 5% or 6% or 10% or shrinks 1% or 2%, it's a great market because it's just huge. And so that's kind of the way that I view that."

Apple is the iPhone company. Since 2007, the vast majority of Apple's revenues have come from iPhone. The legacy MacBook business is a distant also-ran compared to the iPhone. So for Cook to say he can see a universe in which iPhone declines, even by a couple of points, is astonishing.

Apple's topline revenue grew 17%, despite iPhone unit sales remaining flat year-on-year, as the below chart shows. Much of this was driven by the average selling price of iPhones rising 11% to $728, which shows Apple's bet on a $1,000 iPhone paid off big time.

Apple Q3 2018 iphone sales and yoy growth BI Intelligence

But how high can the price of new iPhones really go? Is it sustainable to expect customers to keep shelling out more than a grand on a new phone? Or is it more realistic to get people to spend more on an Apple TV or music subscription each month?

Apple has to change — and Cook signalled that change last night. Apple is evolving from a phone company to a software and content company.

Apple has a new Death Star

As the CEO made clear, the total iPhone universe of all owners new and old — the "installed base" — is Apple's new Death Star.

Here is how Cook sees that panning out:

"We had a stellar quarter in services which generated all-time record revenue of $9.5 billion fueled in part by double-digit growth in our overall active installed base. We feel great about the momentum of our services business and we're on target to reach our goal of doubling our fiscal 2016 services revenue by 2020."

How big is that "installed base"? Greater than 1.3 billion devices.

Services today are $9.5 billion, up 31% on 2017. In 2020, Cook expects them to double to about $20 billion. That's only two years away. For context, iPhone sales in the same period were $30 billion. The installed base (and the software services they buy) is already growing faster than iPhone sales.

So it is easy to see Services eventually eclipsing iPhone as Apple's single biggest revenue sector.

That heralds a new era for Apple.

Since the launch of iPhone in 2007, Apple has been a device company that also makes money from the software that sits on those devices. Sometime in the next few years, the company will flip, and Apple will become a predominantly a software company that sells devices to underpin that ecosystem.

A bit like Google, in other words.

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Samsung's new Galaxy Tab S4 tries to beat the iPad at productivity

Posted: 01 Aug 2018 08:00 AM PDT

At a small press gathering in Manhattan today, just one week before the company heads over to Brooklyn for its big Galaxy Note 9 event, Samsung announced the new Galaxy Tab S4 tablet. The Tab S4 is being pitched as delivering "tablet mobility and PC power." Unable to match the iPad's selection of tablet-optimized apps, Samsung is going in the opposite direction: it's positioning the Tab S4 as being able to offer legitimate productivity on the go. "Nobody's quite cracked the nut when it comes to tablet 2-in-1 productivity," is the line the company used to start off its presentation.

The Tab S4 features a 10.5-inch Super AMOLED display (2560x1600) with a 16:10 aspect ratio. Its bezels are much slimmer than Samsung's prior Android tablets, which means there's no longer a home button. (Iris and face scanning are available as authentication options in addition to the usual passcode.)

It's available with either 64GB ($650) or 256GB ($750) of built-in storage. An S Pen comes included in the box. Like Apple's iPad Pro, it includes four speakers; Samsung says they've been tuned by AKG. The company is promising up to 16 hours of battery life. The Tab S4 will ship beginning on August 10th. Models with LTE connectivity will also be available. Verizon, Sprint, and US Cellular will be offering the device. It comes in (very glossy) black and white options, with preorders kicking off today.

Samsung's DeX, which transforms the user experience into a desktop PC-like environment, is built directly into the tablet's software. "We can support up to 20 windows open simultaneously," said one of Samsung's executives during the product briefing. DeX can be used either with Samsung's sold-separately $150 keyboard case or any Bluetooth keyboard and mouse you've already got. DeX conveniently puts your recent apps right in the toolbar for quick access. Samsung's keyboard is a little cramped — slightly more so than the iPad Pro 10.5's Smart Keyboard — with a small backspace key, but it's workable. It's well built and magnetically latches to the Tab S4's screen, and there's a detachable holster for the S Pen.

The Tab S4 runs Android 8.1 Oreo, includes 4GB of RAM, and is powered by a last-gen Snapdragon 835 processor. Its battery capacity is 7,300mAh. It's also got 13-megapixel cameras on both the front and back. There's a USB-C port, headphone jack, microSD slot, and a pin-connector for the keyboard, which draws its power from the tablet.

Samsung went over numerous use cases for the Tab S4, covering everything from having it act as a POS system at retail to being used in health care and business scenarios. But it does still include the usual S Pen tricks like screen off memo, live messages, air command, and translating text that you hover over. Samsung has integrated far-field microphones into the device so that it can be controlled from a distance through Google Assistant. The company was oddly quiet about Bixby's capabilities on the Tab S4, however, and there's no dedicated Bixby button to be found.

While it doesn't have any serious Android competition, the Tab S4 will be squaring off against Apple's upcoming, redesigned iPad Pro on the premium end, and more affordable Chrome OS tablets beneath it. There's also now the Surface Go to factor into the tablet equation. Is DeX's flexibility and resemblance to a traditional desktop enough for Samsung's latest flagship tablet to make a dent?

My early take is that Samsung should've upped the specs here for the price it's asking. A Snapdragon 845 and 6GB of RAM would've been nice to have inside a device that's designed around multitasking. From a sheer power perspective, the iPad Pro already smokes this thing. But stay tuned for the full review to see if the Tab S4 can manage to stand out for the right reasons.

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Facebook and Instagram now show how many minutes you use them

Posted: 01 Aug 2018 04:02 AM PDT

It’s passive zombie feed scrolling, not active communication with friends that hurts our health, according to studies Facebook has been pointing to for the last seven months. Yet it’s treating all our social networking the same with today’s launch of its digital wellbeing screentime management dashboards for Facebook and Instagram in the US before rolling them out to everyone in the coming weeks.

Giving users a raw count of the minutes you’ve spent in their apps each day in the last week plus your average across the week is a good start to making users more mindful. But by burying them largely out of sight, giving them no real way to compel less usage, and not distinguishing between passive and active behavior, they seem destined to be ignored while missing the point the company itself stresses.

TechCrunch scooped the designs of the two separate but identical Instagram and Facebook tools over the past few months thanks to screenshots generated from the apps’ code by Jane Manchun Wong. What’s launching today is what we saw, with the dashboards located in Facebook’s “Settings” -> “Your Time On Facebook” and Instagram’s “Settings” -> “Your Activity”.

Unfortunately you’ll only see info about your usage on the mobile app on that device. It won’t include your minutes spent on desktop, where these features don’t appear, what you do on your tablet, or info about your usage across the Facebook family of apps. There’s no benchmarks about how long other people your age or in your country spend in the apps. All of these would make nice improvements to the dashboards.

Beyond the daily and average minute counts, you can set a daily “limit” in minutes after which either app will send you a reminder that you’ve crossed your self-imposed threshold. But they won’t stop you from browsing and liking, or force you to dig into the settings menu to extend your limit. You’ll need the willpower to cut yourself off. The tools also let you mute push notifications (you’ll still see in-app alerts), but only for as much as 8 hours. If you want anything more permanent, you’ll have to dig into their separate push notification options menu or your phone’s settings.

The announcement follows Instagram CEO Kevin Systrom’s comments about our original scoop, where he tweeted “It’s true . . . We’re building tools that will help the IG community know more about the time they spend on Instagram – any time should be positive and intentional . . . Understanding how time online impacts people is important, and it’s the responsibility of all companies to be honest about this. We want to be part of the solution. I take that responsibility seriously.”

Users got their first taste of Instagram trying to curtail overuse with its “You’re All Caught Up” notices that show when you’ve seen all your feed posts from the past two days. Both apps will now provide callouts to users teaching them about the new activity monitoring tools. Facebook says it has no plans to use whether you open the tools or set daily limits to target ads. It will track how people use the tools to tweak the designs, but it sounds like that’s more about what time increments to show in the Daily Reminder and Mute Notifications options than drastic strengthenings of their muscle. Facebook will quietly keep a tiny fraction of users from getting the features to measure if the launch impacts behavior.

“It’s really important for people who use Instagram and Facebook that the time they spend with us is time well spent” Ameet Ranadive, Instagram’s Product Director of Well-Being, told reporters on a conference call. “There may be some tradeoff with other metrics for the company and that’s a tradeoff we’re willing to live with, because in the longer term we think this is important to the community and we’re willing to invest in it.”

Facebook Needs Stronger Screen Time Tools That Deter Passive Browsing

Facebook has already felt some of the brunt of that tradeoff. It’s been trying to improve digital wellbeing by showing fewer low quality viral videos and clickbait news stories, and more from your friends since a big algorithm change in January. That’s contributed to a flatlining of its growth in North America, and even a temporary drop of 700,000 users early this year while it also lost 1 million users in Europe this past quarter. That led to Facebook’s slowest user growth rates in history, triggering a 20 percent, $120 billion market cap drop in its share price. “The changes to the News Feed back in January were one step . . . giving people a sense of their time so they’re more mindful of it is the second step” says Ranadive.

The fact that Facebook is willing to put its finances on the line for digital wellbeing is a great step. It’s a smart long-term business decision too. If we feel good about our overall usage, we won’t ditch the apps entirely and could keep seeing their ads for another decade. But it’s likely to be changes to the Facebook and Instagram feeds that prioritize content you’ll comment on rather than look at and silently scroll past that will contribute more to healthy social networking than today’s toothless tools.

While iOS 12’s Screen Time and Android’s new Digital Wellbeing features both count your minutes on different apps too, they offer more drastic ways to enforce your own good intentions. iOS will deliver a weekly usage report to remind you the features exist. Android’s is best-in-class because it grays out an app’s icon and requires you to open your settings to unlock an app after you exceed your daily limit.

iOS Screen Time (left) and Android Digital Wellbeing (right)

To live up to the responsibility Systrom promised, Facebook and Instagram will have to do more to actually keep us mindful of the time we spend in their apps and help us help ourselves. Let us actually lock ourselves out of the apps, turn them grayscale, fade their app icons, or persistently show our minute count onscreen once we pass our limit. Anything to make being healthy on their apps something you can’t just ignore like any other push notification.

Or follow the research and have the dashboards actually divide our sharing, commenting, and messaging time from our feed scrolling, Stories tapping, video watching, and photo stalking. The whole point is that social networking isn’t all bad, but there are behaviors that hurt. Most of us aren’t going to give up Facebook and Instagram. Even just trying to spend less time on them is difficult. But by guiding us towards the activities that interconnect us rather than isolate us, Facebook could get us to shift our time in the right direction.

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