Learn, Make, Learn
Learn, Make, Learn is two product geeks sharing qualitative & quantitative perspectives to help you make, better. Hosted by Ernest Kim and Joachim Groeger.
Learn, Make, Learn
Apple’s iPhone 16 Event: Lessons & Critiques
In another short(er) format episode, we examine Apple’s recent “Glowtime” event. Please do let us know what you think of this new format at LearnMakeLearn@gmail.com or @LearnMakeLearnShow on Threads.
OPENING – 00:00
Suttle Lake
Suttle Lodge
HELP US NAME THIS NEW FORMAT! – 03:12
APPLE’S ‘GLOWTIME’ EVENT – 05:08
Apple Event
The Verge: iPhone 16 event in 16 minutes
John Gruber describes his feelings after the event on Threads
JOACHIM’S TAKE – 05:48
Smartphone innovation is dead, and that’s fine
Revisiting the iPod
Light Phone
ERNEST’S TAKE – 11:07
Made by Google ’24
Steve Jobs introduces “Think Different” (intro to the campaign at 3:05)
Steve Jobs introduces iPhone in 2007 (b-school 101 chart at 3:55)
The Very First ‘Stevenote’
The Glorious Return of a Humble Car Feature
Boomer Apple
RISKS OF SHIFTING TO SERVICES – 27:31
Hilda
Brainchild
Why the Baby-Sitters Club was Cancelled at Netflix
Alexa Is in Millions of Households—and Amazon Is Losing Billions
Steve Jobs: Get Rid Of The Crappy Stuff
Existential thoughts about Apple’s reliance on Services revenue
Jeff Bezos Explains Why Amazon Makes No Profit (2014)
The Birth of an Icon: Susan Kare
Halt and Catch Fire (TV Series)
Drops of God on Apple TV+
Slow Horses on Apple TV+
CLOSING – 49:00
****
Rant, rave or otherwise via email at LearnMakeLearn@gmail.com or on Threads @LearnMakeLearnShow.
CREDITS
Theme: Vendla / Today Is a Good Day / courtesy of www.epidemicsound.com
Drum hit: PREL / Musical Element 85 / courtesy of www.epidemicsound.com
Hello. And welcome to learn. Make, learn. Where we share qualitative and quantitative perspectives on products to help you, make, better. My name is Ernest Kim, and I'm joined by my friend and cohost. Joachim Groeger Hey. Joachim How's it going?
Joachim:I am, I'm gonna be honest, very tired. Long week, was happy that there was a weekend, we had a good weekend, but man, I just, I could do with another 365 days of a weekend? That would make me feel much better. Like, forget the three day weekend, just hit me with the 365. I think I'll be great then. How about you?
Ernest:Yeah, I actually have to admit I'm in a similar boat. I, I, um, went camping last week for the first time this year, first and probably only time this year, which was great. But also, you know, um, I think most people would agree, you tend not to get great sleep when you're out camping. And, uh, that was certainly the case for me. So, um, haven't fully recovered from that yet.
Joachim:no wild animals, try and snack on stuff, or was it pretty, pretty,
Ernest:pretty quiet. I had one little encounter of something in the dark. I'm not entirely sure what it was, but overall pretty uneventful. But, you know, it really
Joachim:sounds very Ernest. What are you talking? I just saw something in the dark, but you know, otherwise it was okay. Okay.
Ernest:walking back to the camp. It was at this place called Suttle Lake, which is a beautiful, lake in central Oregon. It's about two and a half, two and a half hours southeast of Portland. Um, it's a beautiful location. I'd highly recommend it if you're looking for a place to camp in Oregon. Um, and one of the nice things about it is that the campgrounds, you know, are fantastic. There's this lake that's close to all the campgrounds. And in addition, They have a lodge. So you can book, um, accommodations at the lodge and they're actually very nice. It's not, it's not, you know, rustic. It's actually, they're quite nice, but even if you don't book at the lodge, um, there's a restaurant at the lodge. And so if you don't necessarily want to just completely rough it, you can go have a meal at the lodge. But then the walk back from the lodge to where we were camping. It's about a mile and, um, you, um, walk along the lake. Uh, it's a very narrow path and there's no lighting. You know, of course, it's just a campground. So, uh, I was, uh, Kind of heading back with my headlamp and I came around the turn and something jumped across the path into the water. I think, got spooked, spooked by me and I didn't see what it was, but it was big enough to make a reasonable splash. Uh, so that, that definitely kept things interesting.
Joachim:I bet. I would have just run back to the lodge and gotten myself a cocktail at that point. That would have been my approach to deal with the stress.
Ernest:But, uh, you know, I think that's part of the fun of the camping experience. Um, kind of jumping into today, this is episode 21, and we're bringing you another of our shorter format episodes that we introduced last week. Uh, and speaking of which, Joachim, do you have any thoughts on a name for this new format?
Joachim:I don't know. Like, last time it was Reck isode, right? Which, as you said, I think that's great, because we were talking about recommendations. But this time it's kind of reactions. So I don't know. It's, you've, we've thrown everything into disarray our perfect plan and within a week we've screwed it up. Um, I don't know. Nanosode? Nanosode? As a reference to the original iPod Nano? I don't know. I mean, that was a stretch because we're going to talk about apples. I'm trying to like pretend that this was all
Ernest:Right. Right. Yeah. Oh, another thought that had come to mind for me was off the cuff just because, uh, we did want these to be more free form, but, uh, those are just some episodes, uh, some ideas on our end in terms of, uh, what we call these things, but we, we'd love to hear what you think. Uh, if you have any thoughts on this new format, including suggestions on what we should call it, please do share your thoughts with us at LearnMakeLearn@gmail.com or on Threads@LearnMakeLearnShow, all one word. We'd really appreciate it.
Joachim:I got it. No, I got it guys. Don't send in your suggestions. I'm going to call it the Ornette... Ornette isode, in honor of Ornette Coleman of Free Jazz, and these episodes are kind of like Free Jazz composi No? Okay. I, I think. Actually, yeah, maybe please make, send your suggestions. Although I do like Off the Cuff. Off the Cuff. Wow. Well, we'll see. Maybe someone will come
Ernest:yeah, yeah, we're, we're very open to, uh, better ideas. Uh, so, so please do, uh, send them in. All right, let's, uh, Move on to our topic for today, which is Apple's quote unquote Glowtime event, which took place on Monday, September 9th. Uh, I think that's a pretty ridiculous name. So I'll just refer to it from this point on as Apple's iPhone 16 launch event. I know they announced other things too, but That was really the primary reason for the event. Um, we'll include a link to the full video of the keynote, as well as some of the coverage of the event in the show notes, but this isn't going to be a blow by blow analysis of the event as a whole. Instead, we're going to focus on our high level takeaways, uh, particularly through the lens of product creation and product strategy. So with that in mind, Joachim, what did you think of Apple's iPhone 16 launch event?
Joachim:I'm not so sure. Uh, thinner, thinner, thinner bezel, lighter, faster charger, extra button. Um, it's not a, it's not a shutter button. It's just an extra button. Um, I think my tone is already giving away a lot. But actually, um, I was reading Paris Marx's, um, Disconnect newsletter, which is a very, it's very unabashedly anti tech, it's very critical of everything that's happening in the tech industry, um, so it, it's a very, When you pick this up, you know exactly where you're going to stand. But Marx, Paris Marx pointed out something pretty interesting, which I hadn't thought about, but I think it captures the essence of what's going on. The phone is a utility now, basically it is no longer, um, a very exciting device to have used to be iPhone four, iPhone five, these are pretty big shifts in. In our ability to use a phone and now we're basically spoiled we have everything that we need the most of the workflow or the user flow is very well established rightly or wrongly right there's there's no reason to stop innovating but we're kind of resting on the idea of icons the screen the swipe gestures have remained pretty static it's a very well established product now And so it's, it's a utility. And I think it feels like Apple is a bit out of step with, with that. They haven't quite understood it, that this is just, it's just a thing now, you know, you wouldn't have a special event for something that is an incremental improvement on an old product. Um, and when you look at the product lineup, it's very. I mean, there's so many iPhones, right, that 16, the 15 is still for sale, the 14 is in sale in some form, the SE still exists, there's so many, so it's a commodity, it is just this thing that, you know, the newest, highest price one is there for the people that want it, and then medium and lower tiers for everyone else, um, Yes, the Apple intelligence thing is touted as this special feature. But again, it's one of those things that I think is related to upper tier price discrimination. Get that money from the people that want the new shiny object, everyone else don't worry about it. I think they were saying, um, I think one of the VPs of software was talking about the fact that the iPhone 15's RAM could not handle a lot of the AI applications. So that iPhone 15 is basically already a laggard relative to the AI technology, and it's a pretty good phone still. I think we've passed this whiz bang isn't this exciting kind of thing. I mean, we're at 16 now, like, You would have expected the iPhone numbers to move forwards in a different way, like some sort of a different way of, a new nomenclature to suggest a shift in the way things are. But the fact that the numbers just incrementally go up suggests also it's, it's just a utility, you know. I think maybe it is just time to acknowledge that the phone is a thing now it's a thing we carry around and it's now crossed over to the point of being something that we consider to be an annoyance. And to a certain extent, I wonder if Apple has maybe, missed a step here I'm very biased. But if you think back to how MP three players were, uh, back in the day. The iPod was a little bit, in terms of the bells and whistles that everyone else was throwing onto their mp3 players, was a pretty pared down, stripped down, focused product. Interestingly enough, really stripped down, but beautifully made, compelling. It was a rectangle like everyone else's, but it didn't have all of the complications. It was very slick and clean, classic Apple. Um, and so, Part of me wonders if they're missing out on that next step, which is actually people wanting a straightforward device that has very little stuff on it, maybe doesn't even need to be charged every night. We've all been conditioned to charge our devices every night. What if you had a phone you didn't have to charge every night? Like there are these questions that I'm asking myself I mean, there are products that are doing that. Light phone is a good example of a distraction free phone. If they made something like that, I'd be a sucker for that. I'd go for, you know, a stripped down, pared down device with a solid, great screen, minimal applications, and I could still use my text messages as always. So, a bit long winded, but I think we've reached a point where the phone is a utility. Uh, I don't expect there to be more stuff coming out of it. I think Apple needs to just wake up and stop pushing this as if it's an exciting event. I don't think anyone really cares that much. Aside from the press, they have to. Uh, and aside from people who buy those expensive items. But, for those people, I think if you just made it expensive, they would buy it as well. So, That's kind of my very cynical take on it. But I, I think there's opportunity now, I wish there was a, someone in Apple looking at what they've done and just saying, man, this just feels really lame and a little excessive. The phone prices have been creeping up. I mean, every phone, the new phones are a thousand dollars. I mean, that's a laptop, you know? So, um, yeah. What about you, Ernest? When, when you were engaging with that, did you watch the full stream or did you just read the
Ernest:I, yeah, I did actually watch the full stream, um, and, uh, I have many similar thoughts. Some areas where I disagree, actually, um, but, uh, I'll, I'll talk to it. I thought I might use kind of a, a bit of a framework of, of, uh, first talking about the style, just kind of the format. And then, um, My take on the substance and then some thoughts on potential, you know, what this means maybe in terms of potential strategic shifts for Apple. Um, and that's, uh, where, um, I get into maybe some thoughts on pricing too, but, and, you know, feel free to jump in at any point as well. But, um, on the style front, one thing I'd say is. I would really strongly recommend to Apple that they move away from this pre recorded format that they adopted during the pandemic. I think, you know, obviously during the pandemic, it made a lot of sense. You didn't want to bring a lot of people out to an event. Um, that would be, you know, become a super spreader event. Um, so that made a lot of sense, but you know, now that we're Out of the worst of that and their competitors have all moved to in person events where they're actually providing live presentations. Um, I think it's, well past time for Apple to come back to that sort of a live event. And that, I think there's a few reasons for that. At just sort of an emotional level, there is this sort of frisson that comes with a live presentation that Apple's pre recorded keynotes just completely lack this energy that they lack. you know, I actually, um, for this episode, I went back and not only watched Apple's event, but also watched, um, Google's a quote unquote made by Google 2024 keynote, aka the pixel nine launch that was held just about a month ago. I went back and watched that and that event was entirely live and Google's presenters repeatedly emphasized the fact that their product demos were also all live. Uh, which was illustrated by one of the early demos, uh, which failed repeatedly. So you can kind of see that it was truly a live experience. Um, and the fact that Google's event was all happening live, warts and all gave it a tension, but also just sort of this pathos that made me connect with it in a way that I just couldn't connect with Apple's event. By contrast, Apple's event to me felt like. The world's longest, you know, best produced, but also dullest infomercial. Um, I, I don't recall Steve Jobs ever speaking to this publicly, but I'm confident that he recognized the importance of human personification of brands. That's why the legendary, uh, think different campaign that reestablished the Apple brand back in 1997, back when the company was on the verge of bankruptcy. That ad featured exactly zero products and instead highlighted the types of people that embodied Apple's core values. Now similarly, when it came to Apple's keynote events during that jobs era, I think he recognized that the audience needed a human that they could connect with and associate with the brand. And he was that personification. He was the storyteller in chief. He did most of the demos himself on stage. You know, of course, not all of the events during this era, that era were stellar, but jobs created an atmosphere that was remarkably akin to that fundamentally human experience of gathering around the campfire to hear a story. By comparison, today's Apple events featured this cavalcade of presenters, you know, all of whom are really talented presenters, but most of whom sound like they're reading a script based on a press release. And it just makes it. I, I mean, I, in the past I remember I would, um, butterflies in my stomach the night before an Apple event and I'd have difficulty sleeping because I was so looking forward to it. And this one, I don't think I would've watched it if it weren't for the fact that we were planning to talk about it for this episode. And when I watched did watch it, I really struggled to keep watching it. Um, it really felt like homework. Um, so I think that there's a lot. Of opportunity for, uh, Apple on the style front to get back to something that, um, just is, you know, it's not just, uh, a verbalized press released in video format and to something that feels more like a story. And that gets me to the substance. And, um, here is something that I've seen Apple, um, fall into really ever since Steve Jobs passing, which is, um, They seem to forget the why, you know, this, I think that was one of the greatest things that jobs did in his keynotes was that he made a point of helping us as the audience understand why they were doing these things that they were doing. For example, in that original iPhone launch, that legendary iPhone launch, one of the key moments was he shared that sort of business school 101 chart, the four quadrant chart, where you have, um, easy to use, uh, on the X axis where, on the far left, it would have been products that were hard to use. And then not so smart to smart on the Y axis where not so smart was on the bottom and smart was on the top. And he, uh, depicted. Just traditional dumb phones as on the very bottom of that not so smart y axis. And then he depicted all of the existing smartphones on the kind of moderately smart level of the y axis, but all the way over on the wrong end of the easy to use axis. And you know, that very clearly painted the picture of This opportunity, this need for a smartphone that would be truly smart and truly easy to use, you know, occupy that upper right quadrant on that framework. And that was the why behind the iPhone because nothing like that existed yet. So that's why we, you know, made this commitment to make this incredible device. And that was something that Jobs always did, which I was actually surprised by because very few other companies. ever bothered to do that in their product launch events across industries, not just technology. So I've always found that really interesting, um, that jobs made it made a point of doing that. And to me, that was a huge part of why Those Steve notes, as people call them were so compelling, you know, he was, I think a very good presenter, but also every story has to have a, why, right? No fiction story is ever going to try to get away with not explaining the motivation for their characters, the why, uh, and it's, you know, it's the same when you're talking about a product as well. And what I've seen from Apple in recent, you know, really post Steve jobs is they just go right to the what. You know, it's just, oh, hey, here's this product with X nits and Y flops and, you know, Z, uh, whatever. Um, isn't it great because it has just all these what's to it, but they never get to the why. They never really explained why we're doing this. And I really found that to be the case. There are, there were a couple of areas where I thought, okay, that's, that's pretty cool. Like for example, With the watch and the sleep apnea feature, you know, they explained that that's a really, um, common issue. Um, and so that was something that we wanted to address. Okay. That's really compelling or the AirPods pro two and the new hearing aid functionality. You know, that too is a really compelling feature, but. For the iPhone presentation and the iPhone pro, I just felt like there was never a why it was just a series of features of series of what's without a why to bring it all together. So, um, I just feel like that's a big area of, of opportunity for Apple when it comes to their, their, the way they approach their products. And I think I suspect this. Um, is something that exists on the product creation side of Apple right now, too, that, um, I suspect that they're at, you know, in terms of their product briefing, they're also briefing at a very feature level. Um, and so that's, that's. Carrying over into their storytelling as well. And I think it would really, you know, to your point, uh, help them get to a more compelling place if they really started with the Y and that might lead them to actually take some features away. Um, which is, you know, what you were speaking to just a minute ago. It doesn't seem that they're doing that. They're really stuck in this sort of speeds and feeds approach to product marketing, which is something that Steve jobs really. Derided, you know, that that was something that all the competitors did, but Apple wasn't about speeds and feeds. It was about getting at the why. Um, The one substantive thing that I thought was interesting was you mentioned the, the capture button that was kind of probably the key new feature, hardware feature on the devices. Uh, and I thought that was interesting in a couple of ways. One was it represented this continued move away from, What I think a lot of people assumed Apple was trying to move to, which was this fully sealed device when, um, Apple eliminated the headphone jack. I think a lot of people took that as a signal that Apple's goal was to get to this fully sealed device with no moving bits. You know, you'd probably be fully, uh, reliant on wireless charging any buttons on, you know, the volume buttons would be, um, haptic and not actually, uh, you know, move at all. But instead, uh, last year they introduced the action button, uh, which was a physical button on the devices. And then now this year they've introduced the capture button. So I, I feel like that's an interesting move away from, um, the direction they seem to have been heading. And, uh, I hope this is something that we see copied more broadly and particularly in the automotive world where I think, the automotive players, many of them followed Tesla you know, in this direction of taking away all buttons, which I think is a, cue they took from Apple as well. I think a lot of folks who own those types of cars, you hate that experience,, hate having to hunt for buttons. So, um, I hope that folks in other industries will take this as a cue that, Hey, just this future of buttonless devices is not a great future. And so let's, uh, you know, maybe bring back buttons where they're warranted. Another. Thing that I thought was interesting about the capture button, which kind of gets into strategy. What is the fact that the capture button is offered on all versions of the iPhone 16. This is a really big difference from Apple's recent history where when they've introduced a new feature, it would always be introduced in the pro models, which would be kind of one vector for differentiation of between the pro and non pro models. Whereas this year, the capture button, which is kind of the key feature is being made available across the board. Uh, whereas, again, the action button was introduced only on the iPhone 15 pro models last year. The standard iPhone 16 is getting it for the first time, but they're all the standard iPhone 16 models are also getting that capture button. And yeah, I think that reflects a bit of a shift on Apple's part where in recent years they have been trying to push consumers into those higher price tiers of the pro models by, you know, offering these new features that were only available on the pro models. But, you know, I may be reading too much into it, but I think this addition of the capture button across the line suggests that, um, they're trying to, um, broaden access to, you know, They're most compelling features with the recognition that, um, they services are really where their future lies in terms of revenue growth. Um, because yes, I would agree that the phones are kind of insanely expensive, like the pro phones, like you mentioned over a thousand dollars for the biggest phone, but they've actually held on their pricing since last year. And if you consider inflation, pricing of the iPhones have actually declined over the past few years. And I, I have to imagine that that's not an accident, you know, that there is a bit of a shift on Apple's part recognizing that, you know, maybe they're willing to take a little bit less of a margin on the hardware so that they can expand the pool of people, um, who they can address, uh, through their services. Where they have an even bigger margin. Um, and, where they, I think are seeing a bigger growth opportunity. The site Stratechery, which some folks may be familiar with. Um, the author there recently posted an article about that with some similar thoughts and I'll, I'll post a link to that in the show notes. Um, so that's one thought into, in the strategy front. One other thing that, I kind of took away from this and I don't know if this was intentional or not, but was the seeming transition from a kind of brand strategy perspective of Apple from this company that used to represent like magic and wonder, right? Like that was one of the things that made Steve Jobs keynotes. So compelling was it just, you, you felt like every presentation, you You'd be wowed and you'd be blown away by something that you'd never seen before. And it seems like, you mentioned this as well, Joachim, that they seem to be shifting into this utility mode. They use the word indispensable, um, a few times. They want to be this sort of indispensable utility. Um, so it does seem like there is this shift away from the company of magic and wonder to this company of indispensable utility. One big. expression of that is their focus on health. And I wondered whether they might also be seeing health as one, a compelling, um, product opportunity, but also potentially an opportunity to, um, be able to draw subsidies for their hardware, uh, via Insurance providers and government, um, health providers in a similar way that they've been able to draw subsidies on their phones from carriers around the world. Which for them would be a great model, right? I'm sure they'd love to be able to replicate that phone subsidy model, um, across more of their products. So those are two interesting things that kind of struck me from a strategy perspective, but I'd say overall, I think like you, I was pretty disappointed. I would agree a lot of people. I've, a lot of coverage. I've heard some of the tech folks say, this sentiment that it was disappointing is ridiculous because, um, the, the point isn't to get people to replace their phones every year. So it's, this was really geared towards people who have an iPhone 14 or even a 13 or 12. And you know, yes, that's true. You shouldn't be replacing your phone every year. That's silly. And yet I do think that Historically, big part of the Apple brand was bringing wonder into the world. Uh, and you know, they even have devices called magic, magic track pad and magic keyboard. Um, and it seems like they've, they certainly didn't deliver that this year with this announcement. Um, and whether it's a signal of, uh, a broader shift or it's just, an off year, um, it's not, not clear, but to me, if you look at some of the recent, year's keynotes, I do see a broader shift. maybe this is a more of a dip than usual, but I do think that it's, it's one in a series of signals that points to a broader shift.
Joachim:Oh man, there's a lot to go over there. What you were linking to is the idea that this, this company is trying to become indispensable and they want to, they want to do everything and they want to be a service provider for everything. and hardware becomes the vehicle to provide those services. Apple wants to become a platform very much like, Netflix, Amazon, but they have this hardware thing. thing. that allows them to basically populate that hardware with all of their stuff. So cloud storage, forget a Dropbox, like iPhone. You want to have an iPhone, you have it sync up nicely. Just use the cloud storage, iCloud. Messages, movies. I mean, they're really trying to control that ecosystem. And they have the hardware to be able to control exactly what shows up on there. We've all become very conditioned to believe that platforms are these magic money making machines that can just get subscription fees, and then that's that. Apple already has a combined subscription program for its cloud, its news, its music, and movies, and fitness, all sitting under one umbrella. And when I see that,, as a person who worries about how platforms structure themselves, I basically see the end. What's going to happen inside of this company is that decision making is going to become incredibly difficult. You are going to have to start constructing attribution logic inside of your own company to decide who is generating value for your company. So for example, if you have one subscription program that covers everything and, Let's say the cloud program decides to get to make some crazy cool improvement. How will you justify the investment in that cloud storage program? Well, they'll have to come up with some exotic description of how, well, I got the cloud thing and because the cloud's better, people are subscribing more. And because they are increasing the chances they're going to subscribe, I, I earned, you know, a fraction of that subscription revenue. And that's,, my contribution to the bottom line in Apple. And then, well, health will say, no, we got these new trainers and this new program and that's going to prevent, that's going to keep people, re upping their subscriptions. And we actually, 20 percent responsible for those subscription fees. So we take 20 percent of the revenue every time and so on and so forth. And. What that leads to is just this bizarre synthetic bean counting. Like it's not real money. You don't even know who's generating value anymore. Uh, and Apple's business has been traditionally in hardware. Like here's a thing, we make it, there's margin on it. And you sell it. It's cost of goods, this is the price, and that's that. You push into these subscription things, you're going to start unraveling the whole strategy of the company, and you're going to start creating this incredibly ambiguous and hard to manage platform system. Now, Netflix will claim they figured it all out and everything's fine. I sincerely, sincerely doubt that. The level of precision you would need to be able to put onto these numbers is ridiculous and nigh on impossible. So you'd have to be able to say, hey, should we buy a season of Some TV show. Should we add another season of something? Let's take something really stupid that no one cares about, like Hilda, which is a kids show. Absolutely brilliant. I love it. Everyone should watch it. A little recommendation in there. I wouldn't mind watching another season of that. So it's going to cost some amount of money to do that. How do we know that makes sense? Well, you have to say, well, the probability that everyone's going to renew their subscription because of the presence of Hilda is this thing. How will you know that if there's also a thousand other things that are coming down the pipe and they're going to come into the system, everything is influencing everything else. And no person is giving you a clean signal that the reason why they're subscribing is because of this specific piece of content. You're going to have to infer it from their viewing behavior. So everything's in the top 10. It's all the same. I'm going to look at everything. I mean, it's all noise at that point. We're all watching the same stuff on Netflix because they're pushing the same things on there. So for them to dis unpick exactly what contributed and created value. That's the problem. That's why they couldn't extract more out of their movie making business, TV show making business, because they didn't know what to buy. They just did everything like every other TV channel. Did 20 30 years ago. Like, their content strategy was the same as it's always been. There was nothing new. The data doesn't give you anything. Um, and if they had used their brains, there were a lot of shows that really suffered. Um, a lot of brilliant shows. There was a show that actually Pharrell produced called Brainchild. It only got one season. It's a kids science program. And allegedly, one of the big metrics inside of Netflix is bingeability. Now, Brainchild is a children's show. Children have time limits. We place time limits on the viewing habits of our children. So, you can't just look at hours consumed to figure out if this is a good show for children. You have to construct An understanding of how a child consumes something and how that generates a future path of attachment to the platform, which is really hard to pick up, to capture. They, they never get another season. My son, every three months will watch the whole season again and is always sad that he can't watch more. No one is listening. No one has said, oh, by the way, we can quickly knock out another season. Like, none of that fancy tech, we figured out all this deep stuff about human needs. It's all noise. It's all nonsense. So I think the danger is when you start creating these packages and these problems, you're going to have to start parceling out exactly who gets credit for what. It's terrible. So to add the last bit of icing on the cake to make it feel very, very grounded, the wall street journal published an article last month about Amazon's device business. The device business was designed to get Alexa at everyone's home and they were going to heavily, heavily subsidize the devices. And the way they were going to justify the investment of those devices was to say that there was this downstream impact. DSI. It was basically. A system of equations that allowed you to get some number around what the downstream impact is from your thing. And the right way they did is like, you used my service, which I care about as a product owner inside of Amazon, and then I'm going to claim this chain of events that happens downstream from where I am. So if you started buying more stuff because you had an Alexa and you're ordering on the, like, I'll take credit for that. But guess what? Someone was upstream from you. They're probably going to take credit for everything that happens downstream from you as well. And someone's downstream from you is taking care. So basically the joke was always that if you added up everyone's downstream impact, Amazon was going to be like a thousand trillion dollar company. Like it was, it was, the numbers didn't add up the wall street journal points article points out that this was one of the main reasons why the device is business. fell down and lost, you know, billions of dollars because there was no real money coming in. It was just all attributed via these other money generating things. The only way you'd ever be able to identify truly realistically, if this business made money and actually generated more revenue is if you had another Amazon without the devices business. And then you measured what would happen in the exact, so parallel world. Like that's, that's what the impossibility is. And I love models. I love math. And I love to believe that there's a way to get closer to that number. And I always will try and do that, but don't get yourself into that mess. At Apple, I think this is what's going to happen. You know, someone's going to have to say, well, we need to figure out how to attribute this and blob. We need machine learning and AI, and you just get this overhead. When it was simple, this thing, that's the profit and you move on. They have to be careful because there is a real, real risk here that you start destroying the ability to make good, well founded. tethered decisions. And you're going to start hoping that you can convince the stock market that there's some magic at the end of the tunnel. And partly my cynical perspective is this is why Netflix has entered into the advertising business. Like what else are they going to do? They're not going to get more efficient. They're not going to get smarter with the way they decide. What to do and how to find stuff. They're just going to sell your eyeballs now. And the only way this progresses is that they start working their way through all of the tiers until there's only a hundred dollar a month tier that has zero ads. And the rest are all some modulation of different variations of that. I mean, that's, that's. It's going to slowly happen. We're all just on the cooker. It's just always works its way from the bottom up. It's terrible. You know, they, they got people off the lowest ad free tier. They just said that tears gone guys, bye. You just have to watch ads now. I'm like, okay. And then of course, then Netflix can say, look at the audience that we have that watch ads and like, yeah, you forced everyone to watch them. So the platform business seems great. It's good for the market, for the stock market. I don't know how sustainable it is. I mean, Tim Cook's going to get paid. He's going to cash out. Everyone's going to cash out. It's going to be fine, but the company and the legacy and the employees that are just joining and see a future at that company. I don't know. I feel bad that if this is the direction that they want to push into, it gets very, very. tricky and hard to justify why you're doing what you're doing. Um, it's not clean anymore, it becomes political. So, yeah, that was, sorry, that was a very long excursion into that strategy piece that you were
Ernest:Yeah, no, no,
Joachim:yeah, but it, it, it was on my mind, yeah, as you were talking.
Ernest:I, that's something I've, I'm really torn about because I definitely agree. I, you know, I remember when Steve Jobs came back to Apple, he was so proud of talking about the fact that you could fit all of their products on one table and you know, it was such a clean, beautifully simple business and it led to this very Clear relationship between Apple and its customers. Um, and yeah, I really do think there's beauty to that. You could see where the value was and to your point, it's now so muddled and murky, um, and yeah, Apple is such a different company now where you mentioned that iPhone lineup itself is just, there's so many products in just that line alone. They're still selling the the 15 and the 14 and SE, uh, and, even though obviously those aren't going to deliver the best experience that Apple can deliver. and yet what, you know, on the opposite side of that, what makes, gives me some pause is the recognition that, all right, let's, this is predicated on the assumption that we're going to accept capitalism and, and accept that as a, uh, public company Apple has to, has to, To deliver continued growth. So I think you could make a really good argument that maybe we should reevaluate that, but let's say, you know, we're going to accept those that Apple can't continue to deliver growth through hardware sales alone, it's. It's I think just impossible. Um, they could try to enter new categories, but there certainly wouldn't be possible to do that and also deliver on their sustainability goals, which, you know, I think are vital for all of humanity. So if you, if you accept those assumptions, then I think you know, you, Come to the conclusion that yet they do have to find new, um, revenue opportunities. And so, you know, it just feels like services does seem like a pretty obvious mechanism to drive that continued revenue growth without putting more physical, um, bits, atoms out into the world, right? That's, why I see it from both sides that I, I do think today's Apple is just, it's not a company that's as easy to love as it used to be. And to your point, I think from the back end as well, it's gotta be an incredibly difficult thing to manage and to try to understand. and yet I do see why they're doing what they're doing because. Absent this services revenue, Apple would be really battered by Wall Street because they wouldn't be delivering the growth that Wall Street expects them to continue to deliver. So,, I think it is a challenging situation.
Joachim:Oh, I agree. I agree. If you want to do the platform business, you have to design it from the ground up to be a thing that still has the discipline of what you would call a traditional profitable business with costs and revenues. You would have to actually have a clear communication pathway between the customers and. The actual service. I mean, that's the thing that, I didn't say it directly, but really what it is, why is the hardware business so clear? you buy the thing and that's the transaction it's done. A service has a subscription path. It has many components to it. It's very clumpy and it's hard to tell what it is that a person is actually enjoying about the service because everything is lumped under these umbrellas, even Apple news is a set of things. it's not one thing. It's not even one article. When I'm thinking about platform design, you have to think about this as a communication protocol between my customers and the service, and I need to define ways of getting in the fidelity of communication so that I can also understand what they're valuing. The buzzword you can use, I think it's, it's It's overused and it's mis it's abused, but microtransactions is a way of getting at this idea that I want to be able to signal to the, to, to the platform what I'm valuing in this moment. And it shouldn't be this indirect inferential process that the company has to go through. to justify and understand what the user is doing. it's ridiculous. That's why we have this technology is that you can tell, I can tell you what I want, you know, I find it so stupid that we're locked in these subscription walls, but of course, it's part of the, it's the old paradigm. It's, and that's the thing that I think is very, Sad. I, I think that's the thing that's interesting is that Apple has not applied its way of thinking to the services model. They're just replicating what's existed. And that's so lame, right? That goes against the whole ethos of what Apple's doing. If they wanted to do it, they could do it. They have the brains. I think they just need to be open to that. But again, it means that you have to educate the market. You have to educate wall street. You have to tell them it's going to be some rough time. We're going to do some crazy stuff and we're going to try things out. But that's the problem. I think Tim Cook is just a, and everyone right now is just so conservative and they just want to. You know, cash out and ride, ride the wave as long as they can. And who cares about the future of the company? it's a shame because, it need not be that way. I think that's always what I find so frustrating is like the business model need not operate that way. Yes. You need growth. You need all these things to pacify the market.. I mean, Bezos did that back in the day. He said, you, you, you want the thing and I'm not going to give it to you. This is the business that you're investing in. No profits for a long time. And they were like, okay, fine. We'll, we'll keep buying the stock and holding onto it, you know? Um, so there is a way you just have to set the tone. And, uh, and like you said, it becomes more of a human conversation, right? It's this Steve Jobs with this persona that it was kind of the human fleshy embodiment of Apple, um, rightly or wrongly, right? Of course it's this huge thing, but I think that was something that you said at the beginning is the humanity that was there always, and the product was such a big piece of what they were doing. And you felt a connection to, to Apple, which makes me think about the first, like the happy Mac.
Ernest:Yeah.
Joachim:that Susan Kerr designed, which is just that original Mac and a little smiley face on it. And it's just absolutely incredible. which also reminds me of that scene in Halt and Catch Fire in the first season they go to Comdex and our, the main character that we've been following who's kind of a Steve Jobs guy, Lee Pace's character, Joe McMillan, he's in the room when they switch on the, the Apple Macintosh. Joe McMillan's he's mesmerized, and, and then, someone types in some words and it's voice synthesizer works. And Macmillan can only say like talks and it's, it's the humanity in it, right? Everything was so human. Uh, and I think, yeah, your platform business can be, you just have to. design it from the ground up to be that way. It's more work. Why don't you now do something that is actually radically different and, and pushes the boundaries of how people run these businesses. I think it's a shame that they're so conservative about this stuff, but
Ernest:No, to that point, I think, you know, you gave that example of the show that your son loves. Um, was it brainchild
Joachim:brainchild.
Ernest:Netflix? Yeah. I would, in terms of our, what could you do about it as say a product manager, I would just hope, that you as a. product manager at Netflix. I would assume they must have, product managers for kids content. I'm not sure how they organize their product groups, but, um, let's assume that they do that. Part of what you could do is advocate for a different set of KPIs for your kids content, because to your point, kids have guardrails around how much they're able to watch you if you're a good parent, right? So we need to judge our kids content with a different set of. KPIs, let's say, then we do our adult content. So helping your leaders understand that, there's a different lens for success that we need to look at this through so that we can help, those folks, uh, in leadership positions. Then apply judgment in a more thoughtful way. Hopefully, you know, as, as just in terms of like, as a, what can we do as a product manager level person to affect change in a positive direction? I guess that'd be one thing that comes to mind.
Joachim:I think the trap that you can fall into, well, let me put it this way, an engineering or software engineering mindset flattens a lot of the complexity of the problem by necessity, because they're going to try and build a system that does stuff. But like that example of the million checkboxes does, you can create this very flat environment that these very deep behaviors emerge. And in entertainment, those deep things are there, that they're in the data somewhere, but it's because you've decided to flatten it into a KPI of some kind that things are wrong. You have to always represent the path, that story of Who's doing what at what time, and how do you see that flow of activities contributing to an overall, uh, attachment to the platform you have to find ways to open up that communication pathway from the customer to your platform. Whatever it is, hardware, software, it's the same thing. One of my other jobs, was a traditional game studio, triple A game studio, that would release a game with a huge marketing blitz, and they would sell, they would make an enormous amount of money. And then that's it. One and done. And then get ready for the next one when, when you've got the energy again to, to make a new game. And it was a very, very clean transaction. But the business that they're in right now is a live game system and that's an always on service, right? Where people are not buying the game and not expressing an interest. They express attachment by buying cosmetic items. So you're kind of back in that weird, like, inferential process of trying to figure out, did they like the game still? Buying these cosmetics? Did this game make them want to buy the cosmetics? Like, are they just buying the cosmetics because it is Star Wars and it's so attractive? You know, it gets complicated and um, the company has to shift its mindset to adapt to that way of thinking. When before it was very clear, Get those discs into the shops, put them into a prominent position, they will sell, and, and, even if they hate the game, this is the thing I think people, even if they hate the game, you will still make money. But in a live service environment, that's not the case. I think that's the problem with the entertainment industry in general, is that they've, the, the transactions changed, you know, it's now become much more of a, a slower burn, things are indirect and hard to unpick,
Ernest:right, right, kind of getting to that point of understanding that why, why are they doing these things that they're doing, and to your point that it Starts to get very muddied when you have these, rolled up services that are doing a lot of different things at once. I like, for example, I have no idea why Apple does Apple TV plus. It just baffles me.
Joachim:Yeah.
Ernest:Uh, it's
Joachim:I mean, yes. Why are you making movies? They make so many movies as well. I don't get it.
Ernest:Yeah. That's a really, I'd love to help one day. Somebody tells the backstory to that one because, um, that'd be really interesting to learn more about that. Uh, speaking of Apple TV Plus though, there's a series called Drops of God. It's based on a, it's based on a manga. Uh, And it, you would, you wouldn't know it existed like Apple has done absolutely zero promotion for it, which is just so sad, but it's just absolutely gorgeous. It's, um, a little bit, uh, you know, it's an adaptation. So it's a little bit different from the source material. Uh, one big change is that much of it is set in France, although there is still a big component, um, in Japan as well. Beautiful, beautifully shot, really beautifully written and acted. Um, so that would be one good thing on Apple TV plus I'd recommend. I'm also a slow horses fan, but, um, yeah, there's a few, few gems on there.
Joachim:heard. Slow horses is definitely one of the really good shows. It's ridiculous. I mean, Gary Oldman is disgusting in that. So it is, it is always a treat to see how far he can push, push that acceptable behavior on screen. Yeah.
Ernest:All right. Well, we've kind of veered into recommendation territory, but, I think we had a good conversation about, uh, the Apple event as well. Um, now, as I mentioned earlier, we want to hear from you. Do you agree or disagree with our takes on Apple's iPhone 16 event? What do you think of this new episode format? And as we asked earlier, do you have any suggestions on what we should call this new format? We want to hear from you. So please share your thoughts at LearnMakeLearn@gmail.Com or on threads at LearnMakeLearnShow, all one word. Thanks for listening and we hope you'll join us for the next Learn Make Learn.
