A disappointment which will sell well.

With discretion and confidentiality being concepts of the past, the forthcoming iPhone5, to be announced on September 12 and on sale September 21, has been the most leaked iPhone design ever, despite Tim Cook’s commitment to tighten up security. Here’s what we know:

• Same width as the iPhone 4S.
• Half an inch taller for 16:9 widescreen rather than 4:3. Largely useless.
• LTE 4G cellular, meaning AT&T can cease lying about 4G (my AT&T 4S says ‘4G’ when it’s ‘3G’).
• Thinner, owing to integration of touch sensors into the LCD panel.
• Better battery life, maybe as good as the competition.
• A smaller dock connector, just to make sure 50 million users of accessories get upset.
• Maybe an even better camera sensor to update the already excellent 8mp one in the 4S, the biggest update from the previous model 4. OVTI’s pop in share price and revenue predictions suggest this may be so; they make the sensor.
• The global Qualcomm comms chip to permit functioning on any cellular network, including China Mobile which has yet to sign with Apple. China Mobile accounts for 50% of Chinese cellphone users.
• A faster A6X ARM CPU.

Here’s what we likely will not see:

• Near Field Computing. NFC is the technology which will replace credit cards and drivers’ licenses, storing that data encrypted in the phone and transmitting it by a proximity wave to the reader in the retailer’s store. Or cop’s cruiser …. In an insightful piece, one of the best tech sites around, AnandTech, has concluded there is insufficient space inside for an NFC chip, further hampered by a reversion to a metal back, compared with the current glass one.
• A proper sized screen. Having sued and prevailed over Samsung’s copycat efforts, and rightly so, Apple is likely finding it hard to argue for the right-sized screen in Samsung’s Galaxy III phone. As regards those who damn Apple’s intellectual property efforts, they forget two things. Apple has paid its share of penalties for IP infringement. And how would these critics feel were it their IP which was being stolen?
• Biometric technology. Apple recently bought biometric security (fingerprint recognition, retina scans, etc.) AuthenTech for $356mm which brings with it the thrilling prospect that I will no longer have my credit card number stolen annually by Russian hackers. You will access your iPhone with your fingerprint, no more easily guessed passwords for thieves. The thieving sales clerk will no longer see your CC number. And, once licensed, customers of WalMart will be able to check out with a fingerprint which is an improvement over the ‘X’ they currently struggle to write on the credit card machine’s screen.

In a nutshell, if the above is right – and I pray it is not – the iPhone 5 is a useless 0.5″ longer than the iPhone 4S and represents little more than tinkering at the margin of the current design, while increasingly falling behind the best of the competition, stolen as many of their designs may be. 4G is nice for the 2% of the cellphone world which has access to it. Verizon 4G on my iPad3 is outstanding in the Bay Area, by the way. AT&T’s 3G on my iPhone 4S is anything but.

Yet despite that litany of disappointments, it will be a massive success, for several reasons:

• The Apple ecosystem. You can argue, correctly, about the dated and confusing design of iTunes, but a relatively stable iCloud and high integrity email and related applications not only tie in existing users but also attract those brutalized by Android and Windows.
• There is no earthly reason to think that Microsoft’s Windows 8, promising everything to everyone, will be any more successful than the disastrous Vista. iOS and the iPhone/iPad were in development 5 years (500 man years?). Why on earth would anyone think that Microsoft, famous for poor UIs and a cynical disregard for the user experience owing to long vested monopoly power, should succeed with an immature Windows 8 which tries to please both desktop and mobile users? Were I a gambling man I would bet that the Surface tablet will be the Sinker tablet before too long, having successfully upset all of MSFT’s traditional manufacturing partners (Acer, Asus, HP, Dell, etc.) who have had the carpet whipped out from under their feet by MSFT’s sudden decision to become a manufacturer. (Xbox was purchased and remains largely unchanged since, and making mice is not the same as making tablets).
• China Mobile. Apple will soon sign this carrier in China, one who accounts for 50% of China’s cellphone users. The new Qualcomm comms chip in iPhone5 will, for the first time, accommodate CM’s cellular technology. Sure, that does not mean 500 million new sales, but Apple is about profits not market share. Another 10 million at 45% profit margin will do nicely. That figures to $30 or 5% on AAPL’s share price.
• Pent up replacement/upgrade demand from iPhone4 owners who were disappointed by the marginal improvements – camera aside – in the iPhone4S.
• Vanity sales from Apple’s growing share in laptops, where users are introduced to the elegance and quality of Apple’s design work. As one example, the 2012 MacBook Air is an outstanding, attractively priced machine and the Retina Display 15″ MacBook Pro has the best laptop display in the business and will soon be joined by a 13″ model which will further grow laptop share.
• Continuing Apple supply chain dominance with long-term supply contracts signed up with key component makers, not least the three manufacturers of retina displays.

So while I expect the camera to be further improved in iPhone5, yet another nail in the point-and-shoot sector’s coffin, I will be waiting for iPhone6 unless I am significantly mistaken in what I wrote above.

As for Apple’s future, the company has lots of good things in the pipeline but the ones we know about are anything but innovative. The iPad Mini will clean up in the education market (OK, not in US public schools, which hardly qualify as education) at a $249 entry point, and will get no competition from the soon to be introduced Kindle Fire2, which will be heavily advertising supported to direct you to buy more stuff from Amazon.com. Teachers will likely not take kindly to their charges firing up their, err…. Fires only to be confronted with condom ads. Patent litigation will continue for the forseeable future and Apple will mostly prevail, setting back the thieves and forcing them to actually make something original. Everyone wins, but Apple wins first.

The Steve Jobs pipeline of innovative products is ending, so some really new things have to come along for Apple to maintain its torrid pace of growth. I expect that to continue for at least another year, but absent a fresh burst of innovation, the storm clouds will come closer. The replacement market is not a growth business, after all.

Disclosure: Long AAPL, QCOM, BRCM.

Obviousness.

Considering how all the pundits claim that the stock market is stacked against the ‘little guy’, it continues to offer up no-lose opportunities with startling frequency.

In the past quarter alone, had you loaded up on Apple and shorted Facebook and Hewlett Packard, you would now be substantially wealthier. Apple makes things which Asians steal. Facebook is a fraud aimed at impecunious teenagers. And Hewlett Packard has Miss Piggy at the helm. Shareholders must rue her loss in the CA gubernatorial election. Gee, you don’t need a spreadsheet to analyze that lot.

And Friday’s patent decision by a jury in Silicon Valley rightly concluded, despite an arrogant judge who made the error of thinking the jurors were stupid, that theft is punishable by law. At least by American law. The jurors needed no advanced degrees in patent law. A 132 page ‘How to Steal’ Samsung document and sheer obviousness led them to speedily conclude that if it quacks like a duck, it is a duck.

Obviousness.

If, like me, you shelled out $500 for iPhone v1 5 years ago on the day it went on sale, the prevailing memory of that day is of your crashing jaw. Rubberbanding, pinch to zoom, tap to fill, multitouch, icons, the internet in your pocket. All had the same effect on this user’s jaw. And all were faithfully copied by Samsung.

There is a body of opinion out there which has it that this verdict will stifle innovation. The writers, of course, are journalists who flunked Econ 101. The explosion in innovation which will result as cheaters are forced to become designers will astonish and delight.

Meanwhile, do the obvious and make some coin. And your iPhone comes with a great camera, too, soon to get even better, so take some snaps while you are at it.

As for the Apple haters reading this, ask yourself which you hate more. AAPL or $$$$?

By the way, a piece I wrote four years ago which attracted record amounts of hate mail, has just been updated. Like I said, obviousness is a reliable guide.

With the Trinovids, looking into the future. iPhone 4S snap by my son.

Disclosure: Long AAPL, QCOM, BRCM; short FB.

Ingenious.

The Lumin app for the iPhone allows the use of the phone’s camera as a magnifier, with or without illumination from the built-in LED. That’s incredibly clever, and I have found it ideal for determining serial numbers on hardware for insurance purposes. Such numbers are increasingly screen printed in very small fonts on equipment and the their falling size and my aging eyesight conspire doubly against me.

You can take a snap of the area imaged and email it to yourself with ease – here’s an example of the serial number on my Panny G3:

Other uses include looking at restaurant menus in poorly lit diners, spotting that wood splinter in your finger, examining your Border Terrier’s nose to try and determine just how it manages to stay frigid, and …. well, you get the idea.

There are many flashlight apps in the iPhone AppStore, but none that can compare to this. Try and buy an illuminated magnifier for $1.99 that fits in your vest pocket and doubles as a flashlight.

Clutter or value added?

A friend sent along a link to Olloclip (eh?), a maker of auxiliary lenses for the iPhone 4/4S. Click the picture to go to their site.

Click the picture

This particular variant adds wide angle, fish eye and macro capabilities when clipped over the iPhone’s rear facing lens.

Auxiliary lenses are nothing new. Zeiss Ikon in their Contaflex and Kodak in their Retina IIc/IIIc folders and Retina Reflex cameras used this approach in the 1960s. The standard lens would have a small removable element which could be replaced with wide and long focus front elements, invariably gargantuan and, in the case of the Contaflex, there was even a macro and a monocular adapter. The bulk and clutter these added to the camera bag were in no way repaid by image quality. The wides were not very wide, typically 32-35mm, and you could get better long focal length quality by simply enlarging the 35mm negative more, in preference to using the attachment. Most of the ‘teles’ were 75-80mm with the Retina Reflex boasting a 200mm.

Accordingly, I confess I have mostly negative opinions of this sort of thing. First, auxiliary lenses seldom are much to talk about when it comes to definition. Look at the fish eye examples on that site and the definition is pretty awful. Second, you are fiddling about with attachments rather than taking pictures.

So the Olloclip device, and its cousins, none of which I have used by the way, fail the test of ‘small and simple’. Futzing about with add on gadgets when snapping with the quite decent camera in the iPhone 4S seems, to me, to destroy the small and fast concept, and the displayed images suggest that anything larger than a wallet sized print will embarrass both photographer and viewer. On the other hand, I just made some 13″ x 19″ prints from my naked 4S and the quality needs no excuses. I see no pressing reason to mess with that.

A study in skill.

The city is fixing some old sewer pipes locally and the pup and I needed no encouragement to watch the action on our evening walk.

Komatsu Digger operator. iPhone 4S, processed in Snapseed.

This enormous digger was replacing the old sewer pipes and it was truly a fascination to watch the operator move the pieces into place, manipulating the huge bucket and hydraulic arms with the delicacy and precision of a surgeon wielding a scalpel. As he finished work for the day he placed the heavy, steel cover plates – probably 8′ x 20′ in size – over the trench with such sureness that they abutted perfectly, yet never quite touched. His equally skilled colleague was operating a backhoe with exquisite precision, demonstrating that he could move a single pebble of the crushed rock filler along the road without damage to the surface, using a nine cubic yard scoop. Incredibly impressive.

It is never less than totally satisfying for this observer to see a skill expertly demonstrated, regardless of the occupation involved.