(#26) Apple and its critics; Twitter's CEO first email; Food delivery market is too big for two winners and The Beatles are alive...with AI
META's Zuckerberg teases Apple Vision's Pro (hint! META is a software company); France and Germany may declare a trade war to China; Oil&Tobacco companies have better ESG score than...Tesla
Strategy
Apple vs. its critics
Will Apple’s Vision Pro will be a flop?
Two weeks after the launch the critics started to raise their voices: “Vision Pro will be a flop”.
Their reasons seem valid when you hear them:
1/ All the showcases were with alone persons or sitting
2/ Tim Cook never tried the device in public (unlike Steve Jobs with all the previous new devices)
3/ The participants were not allowed to wear the device for more than 25 minutes because it was heavy
4/ The price tag is unreasonable (ie. $3,500)
5/ The device is anti-Meta, hence not really what would Steve Jobs have wanted
6/The headset category is too small in value; it should have pursued the EV industry (e.g. Apple Car)
7/ It doesn’t show status …like the iPhone; and many more. LINK
Now, in Apple’s defense, I have some comments:
1/ I saw this critique in 2007 when the iPhone launched and guess what? After several iterations, Apple became number one. Why all critics were wrong? (including Steve Ballmer, Microsoft’s CEO at the time)
—- because the consumer is irrational when it comes to the buying decision.
2/ Except for the iPhone all major products adoption had a B2B approach. Apple understood that and delivered that and more (ie. targeting also the entertainment market)
3) As mentioned in last week’s newsletter, the pricing is in line with the past pricings:
Apple 2 (1977): $6,500
Mac (1984): $7,400
Powerbook (1991): $5,500
4) Finally, Apple was forced the close the “3C” loop”: Creating, Connectedness, and Consumption:
with a Mac you can create
with an iPhone you can connect
with Vision Pro you can consume
I remain optimistic.
META trolls Apple:
A few days after Apple’s release Mark Zuckerberg sent this email to his META Quest team:
“Apple finally announced their headset, so I want to talk about that for a second. I was really curious to see what they were gonna ship. And obviously I haven’t seen it yet, so I’ll learn more as we get to play with it and see what happens and how people use it.
From what I’ve seen initially, I’d say the good news is that there’s no kind of magical solutions that they have to any of the constraints on laws of physics that our teams haven’t already explored and thought of. They went with a higher resolution display, and between that and all the technology they put in there to power it, it costs seven times more and now requires so much energy that now you need a battery and a wire attached to it to use it. They made that design trade-off and it might make sense for the cases that they’re going for.
But look, I think that their announcement really showcases the difference in the values and the vision that our companies bring to this in a way that I think is really important. We innovate to make sure that our products are as accessible and affordable to everyone as possible, and that is a core part of what we do. And we have sold tens of millions of Quests.
More importantly, our vision for the metaverse and presence is fundamentally social. It’s about people interacting in new ways and feeling closer in new ways. Our device is also about being active and doing things. By contrast, every demo that they showed was a person sitting on a couch by themself. I mean, that could be the vision of the future of computing, but like, it’s not the one that I want. There’s a real philosophical difference in terms of how we’re approaching this. And seeing what they put out there and how they’re going to compete just made me even more excited and in a lot of ways optimistic that what we’re doing matters and is going to succeed. But it’s going to be a fun journey.” (LINK)
I think he’s wrong on several points:
1/ Pricing - Zuckerberg thinks Apple has a wrong pricing strategy, while META selling the device several times cheaper is doing the right thing. I tried META Quest 2 and the quality was so poor that I didn’t want to try it again. Lesson #1: Apple never ships MVPs
(Note: I understand META’s pricing policy but sacrificing quality for mass adoption is not always the best solution)
2/ Limitited utility - with individuals “sitting on a couch by themself”. Well, he forgot to mention the productivity part. Here is META vs Apple:
3/ The battery trade-off- “[...]now requires so much energy that now you need a battery and a wire attached to it to use it.”
Indeed, the battery is a trade-off that Apple made to its design but it made it with two intentions: (a) to lower the weight of the device and (b) to remove extra heat from the battery.
Now, when the first iPhone was announced the battery was around 5h, and when launched (5 months later) it was 8h. I am confident that the battery life will improve considerably.
4/ The vision of the product - “More importantly, our vision for the metaverse and presence is fundamentally social. It’s about people interacting in new ways and feeling closer in new ways. Our device is also about being active and doing things.” - well, this is what Mark said but having experiencing with his products and seeing Vision Pro in demos and limited reviews I tend to think that that vision will and much more will be delivered by Apple; and we will buy it happily.
Work trend in 2023
Gartner recently presented 9 trends. LINK
Finding and retaining talent remain two of the most complicated things.
Back in the office
Google (and many others) recently enforced recently their back-to-work policy for at least 3 days per week. I think is a logical move because innovation on the best services and products doesn’t happen when working from home. LINK
The State of Workers Report 2023 (USA). LINK
on Innovation
‘The creative process is fabulously unpredictable. A great idea cannot be predicted’ - Jony Ive
So many interesting insights from the legendary Apple designer on innovation. Innovations happen when curiosity meets relentless hard work. LINK
London office shake-up as working from home reshapes the market\
Not only the offices are disrupted by the work-from-home policy, but also their entire ecosystems: restaurants (bars, and cafes), cleaning stores, malls, food delivery, etc. Everyone should reinvent themselves. LINK
Tobacco companies have higher ESG ratings than….Tesla
This is exactly why I am skeptical of ESG as a policy. LINK
Beyoncé blamed for inflation in Sweden
To drive down inflation the governments should increase the offer (and, of course, stop printing money). In Sweden, everything takes months and years to do: from going for surgery in a state hospital to buying a home. Btw, good luck finding a to buy a new home! LINK
A trade war is looming in Europe against China.
France is pressing the EU to declare a trade war against China and Germany will publish its China policy soon, probably in July. Western Europe has lost manufacturing to China (and South East Asia) and the only chance to compete in trade with China is to focus on (1) artisanship products (e.g. Louis Vuitton, etc) and (2) highly advanced machinery (e.g. ASML). France, Germany.
Twitter 2.0
Read the new Twitter CEO’s first email to employees (LINK):
“Building Twitter 2.0 Together
Hello Twitter!
People keep asking me: Why Twitter? So, I’ll tell you.
From space exploration to electric vehicles, Elon knew these industries needed transformation, so he did it. More recently it has become increasingly clear that the global town square needs transformation—to drive civilization forward through the unfiltered exchange of information and open dialogue about the things that matter most to us.
Have you ever been talking with someone particularly insightful and thought, You’re brilliant—everybody should get the chance to hear this. Or, I’m learning so much from you—can we do this again? Or maybe it’s as simple as, You should have the freedom to speak your mind. We all should.
Enter Twitter 2.0.
Twitter is on a mission to become the world’s most accurate real-time information source and a global town square for communication. We’re on the precipice of making history—and that’s not an empty promise. That’s OUR reality.
When you start by wrapping your arms around this powerful vision, literally everything is possible. You have to genuinely believe—and work hard for that belief. And in this moment of complete reinvention, we have the opportunity to reach across aisles, create new partnerships, celebrate new voices, and build something together that can change the world. And from what I can tell so far, you’re built for this.
The success of Twitter 2.0 is all of our responsibility.
We need to think big.
We need to transform.
We need to do it all together.
And we can do it all by starting from first principles – questioning our assumptions and building something new from the ground up. It’s rare to have the chance to put a new future into the hands of every person, partner, and creator on the planet.
That’s exactly why I’m here – with all of YOU.
So, let’s dig our heels in (4 inches or flat!) and build Twitter 2.0 together.
Linda”
This email is the classic framework of how to engage people. Below is the example for Twitter:
Problem → A transformation is needed
Mission → Become the world's most accurate real-time information source
Vision → Generate feelings and knowledge
Strategy → Start from the first principles
Execution → Work hard
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Artificial Intelligence
McKinsey has a comprehensive study on the impact of generative AI. The report presents 63 use cases that have the potential to generate $2.6 trillion to $4.4 trillion in value across industries. LINK
Google DeepMind’s game-playing AI just found another way to make code faster
Millions of developers are using intensive AI to write code faster, hence taking more work and eliminating more entry-level core coding jobs. Ultimately, these code libraries will be developed which will drive the code cost generating down. LINK
Google opens its Generative AI Platform to all
And just like that Google has a new platform to leverage their additional services: from G Cloud to G Suite. In the end, this is what Microsoft and other large players will be doing. First-mover advantage means a lot in this business. LINK
Paul McCartney got a little help from AI to create one last Beatles song. LINK
Data
Delivery apps and market economics
Over time, each market will select its winner. The second place, unlike other industries, is not desired due to potential losses. In Europe, we see this battle with Uber and Bolt in so many markets, but other examples come into my mind: Glovo, Tazz, etc
So, Door dash focused on 4 main strategies.
Serving restaurants that don't have any type of delivery, hence avoiding competition
Access to loads of data: customer preferences, the best time to deliver, and so on
Serving unserved markets with higher average order value (AOV): the suburbs
Offer prepayments and other financial support to restaurants. LINK
The 10 Longest Range EVs for 2023. LINK
Amazon has spent $78 BILLION on research and development in the last 12 months. LINK
Outside Interest
Nassim Nicholas Taleb was last week at Bloomberg’s Live session discussing inflation, global financial markets, and crypto. Great interview. LINK
On Covid
What happened weeks before the pandemic erupted? An in-depth investigation from The Times. LINK
How Apple’s new Macbook Air ‘15 was designed. LINK
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