Apple Announces Q3 FY 2016 Results: App Store Up, Hardware Down

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• BrokenCrayons - Wednesday, July 27, 2016 - link

  The "other products" category's poor showing is no surprise. I'd hazard a guess at saying the Watch is performing very poorly based on the lack of interest Apple is showing in the platform. That really isn't an accusation directed at Apple citing poor execution, but more representative of the broader market of wearable technology in general. As people abandon their fitbits and Watches in dresser drawers because of their tiny screens, limited use case scenarios, and short battery life, I think you'll see only a few people that are both die hard wristwatch wearers from older generations that didn't grow up with clocks on literally every electronic device all around them that also happen to be goo-gaw device junkies still pine for attempts at modernizing such relics.
  
  On the phone, tablet, and computer fronts the bottom line is that there's nothing really interesting going on in the industry with respect to technological advancement. Tablets are slowly following netbooks to their eventual demise. Phones have gotten too big to appeal to a lot of people who want to put them into a pocket instead of sticking them in a brick-like case and then carrying them in a holster like some modern replacement of the western movie cowboy's revolver. Meanwhile the PC industry is by-and-large stable with the only blips being new graphics cards that ultimately are still not in the the majority of computers because processor graphics have the market locked down pretty well while consoles have a large chunk of the gaming market. The only other blip is a misguided attempt to exhume VR headsets from their mid-1990's tombs while DX12 is poised to kill off multi-GPU setups that offer reasonable performance (read non-vomit inducing) in VR once and for all by making cost sensitive game developers responsible for baking in support, thus killing that zombie and putting it back in the dead-end tech heap with 3D televisions for another 15-20 years until someone attempts to dig them up again under the assumption that "it'll surely be different this time around now that we have technologies X, Y, & Z" without realizing the fundamentally bad outcomes in most humans that results in sensory conflicts VR creates.

• fanofanand - Wednesday, July 27, 2016 - link

  If the new gen of GPU's isn't enough reason for Apple to update, then nothing will be. DX12 will do the exact opposite of what you claim, DX12 will make multi-GPU setups viable again. I am as surprised as anyone with the stagnation in the MacBook pro lineup, but I am quite certain we will see a refresh this fall. I have never, nor will I ever own anything Apple, but I think your assessment is quite off-base.

• BrokenCrayons - Wednesday, July 27, 2016 - link

  I honestly don't see how DX12 will help. NV has already thrown in the towel with > 2 GPU setups in the new hardware generation, effectively walking away from supporting such configurations with their new SLI bridge and that alone should clue people in that this sort of thing is being slowly abandoned.
  
  The other obvious point is that DX12 shifts multi-GPU support responsibility to game developers (or game engine developers anyway). In order to support m-GPU configurations, human labor will be necessary which will drive up production costs. Game development is already a labor-intensive affair with a big chunk of expenses going to paying salaries. With highly cost-sensitive big studios being asked to soak up the price of additional labor to support halo and niche hardware configurations that don't really do much more than pointlessly increase FPS at resolutions the majority don't run, it's going to be difficult for a publisher to authorize the investment to support m-GPU. It boils down to dollars and I just don't see it making cost effective sense. Even the argument that there's a lot of unused iGPUs sitting around doing nothing in computers with discrete graphics doesn't hold a lot of water when the largest segments of computers sold don't even contain a d-GPU which could benefit from iGPU+dGPU DX12 scenarios. Atop that, the majority of those sales are laptops and small form factor machines where adding a discrete graphics chip isn't possible.
  
  I'm gonna call it now, multi-GPU setups are going the way of the dodo bird. Desktops that are big enough and custom enough to support more than one GPU are already dinosaurs in a mobile computing world. There's just no real future for such things outside of professional rendering farms and whatnot. They certainly don't fit in a pocket or handbag overly well and with tighter integration of components that are cutting into modular expansion capability, PCs are losing the ability to be upgraded at all.

• BrokenCrayons - Wednesday, July 27, 2016 - link

  Replying to my own post...tacky. Still, when's the last time AT even reviewed a standard desktop PC -- something in an ATX case that can actually be upgraded? It looks like there was a workstation given a full review in 2015, but aside from that, complete desktops are a non-entity. Component-level reviews cover desktop hardware, but that market is shrinking as surely as companies like NewEgg now sell kitchen appliances in order to be diversified enough to stay afloat. -- Got a nice waffle iron from them 3 years ago when I bought some RAM for a laptop as a matter of fact.
  
  Read the writing on the wall. It sucks, but it's been there for a few years already.

• FunBunny2 - Wednesday, July 27, 2016 - link

  -- If the new gen of GPU's isn't enough reason for Apple to update, then nothing will be.
  
  need a use case for a new gen of GPU. the three driving applications (spreadsheets, word processing, spreadsheets) get by just fine with embedded cpu graphics. games, CAD, and who knows are about the only use cases that need any kind of GPU. not large markets, at least compared to Excel and Word of two decades ago.

• name99 - Wednesday, July 27, 2016 - link

  And how exactly do you get to "lack of interest Apple is showing in the platform"?
  Apple is releasing a massive OS update with WatchOS 3 in September, along with likely new hardware.
  
  People like you seem utterly oblivious to the way the iPhone launched, under essentially exactly the same circumstances. iPhone 1 had inadequate hardware (no 3G for gods sake, slow, 128MiB RAM), and severe limitations in the OS. It sold poorly (worse than Apple Watch so far). But it mattered because it showed the direction of the future.
  
  It took two more sub-par iterations (iPhone 3G then iPhone 3GS) before everything really started coming together with the iPhone 4, and even that success wrt design and technology was only reflected in sales with the iPhone 4S.
  
  Change takes time. One reason to be optimistic about Apple is precisely that they have now calibrated themselves pretty well to this. Apple TV is a great example of REALLY understanding how slow some things would change (and even pre-emptively calling it a "hobby" to get people to shut up about how slow this would be).
  I expect wrist computers (ie Apple Watch) likewise to take around another two, even three, years of hardware that's not quite where we'd like it to be, and likely some flailing around with the visual design of the hardware and the details of the UI before Apple nails it AND the public starts to see the value AND the sorts of social infrastructure changes that really make it valuable (eg widespread Apple Pay, using your watch to identify you for transit and similar tasks).
  And even after the iPhone 4, it still took a few more years to consolidate and improve everything with iOS 7. And, big bang as iOS 7 was, we're still finding plenty of things to fix in later OSs.
  
  Change takes time!

• FunBunny2 - Thursday, July 28, 2016 - link

  -- I expect wrist computers (ie Apple Watch) likewise to take around another two, even three, years of hardware
  
  hardware, strictly speaking, isn't the issue. they are:
  1 - form factor is way too small. Dick Tracy was a cartoon
  2 - battery power is determined by physics and chemistry, not cartoonists, and unless/until the science finds a battery chemistry with at least 100% more oomph than today's, then today's processing is what you'll get, forevvehhha

• BrokenCrayons - Thursday, July 28, 2016 - link

  You nailed it.
  
  The inclusion of gimmick features like physical activity monitoring are just attempts by the manufacturers (Apple and others) to find the "killer app" that will appeal to a large enough audience to make platforms like the Watch sell to a broader audience to which they currently offer no utility. At the moment, they're something akin to a new exercise machine that someone purchases, uses twice, and the forgets about.
  
  The trouble in developing that utility and finding that killer app is overcoming essentially insurmountable problems in the tiny screen and the physics of current battery technology. E-Ink screens might offset the battery problem, but their refresh rate is too low to offer a visually interesting interface or differentiate the product from a cheap digital watch that just tells the time.
  
  The bottom line is that the platform is doomed. A few companies are riding a fad wave to drum up some money with limited function hardware (fitbit pops into mind right away -- as does dusty exercise equipment everyone's forgotten after a year) but I don't think any of those companies would be realistic if it were to forecast this sort of thing being enduring in the long run. Their best bet is to cash grab while they can and diversify into related products by using wrist platforms as their company's proverbial first rocket booster stage.
  
  Apple is different in that its already got a variety of other products and their strategy in approaching watches is different as well. They're trying to continue to give the public the perception the company is innovative in a post-Jobs era where its impossible for Steve to return to save the company from itself again (unless the fine people at Apple have figured out that necromancy thing). Even if the Watch ends up a loss, its probably worth the cost because of the intangible benefit of public perception. That's why I think they're making a dog and pony show of it, but ultimately aren't all-in with the Watch for the long haul.

• ChicagoAdam - Wednesday, July 27, 2016 - link

  Great stat reporting. Very good job of making the data easy to understand - and pretty darn comprehensive. Forbes links to this article making the case that Apple bulls have plenty to worry about as Apple remains in a Growth Stall http://bit.ly/2ahpVAf

• Hoekie - Wednesday, July 27, 2016 - link

  Remains going down you mean. There's no growth for 2 quarters. That's the news. And nothing new on the horizon. Just refreshes.