He had gone out to dinner with friends the night before
and realized that none of them -- "I mean nobody" --
believed the statements coming out of Apple PR about
Steve Jobs' health. "As good as the company is," he wrote,
"I just can't own a stock when I don't believe the company
is being straight with investors."
He called Apple out for lying about Jobs' health (they were lying) and sold all his shares. Hardly an indictment of his investing skill.
"I don't regret my decision to sell $aapl."
"When I think the company is misleading investors, I
don't want to be a shareholder, no matter how much
appreciation there might be in the future."
He was right when he said that devs should pick Android if they want to be 'in front of the most eyeballs', but he was clearly wrong on the relative value of those eyeballs.
His reason for selling was that he was (it turns out rightly) concerned about Jobs' health and didn't feel that Apple was behaving honestly with its investors w/r/t the public statements about it. http://avc.com/2009/01/selling-apple-a/
Apple detractors keep predicting its downfall due to availability of commodity hardware, however Apple fans continue to purchase Apple gear because everything else is commodity hardware.
To be fair, Apple's hardware lately has been unimpressive to me (a longtime Apple buyer) and their increasingly locked-down, inflexible software is calling any future purchases into doubt, too.
The only reason they're relevant is the iPhone. If they didn't become the lead platform in a market that exploded shortly after, they would hardly be where they are today.
Once again they're losing marketshare to commodity hardware now that the path has been paved. You can assume they'll strike lightning again but we'll see.
There's also the issue of being laughed out of the room if they said the same thing about software.
To me the biggest threat to iOS is the web, not Android, as long as everyone continues to push Apps on their website there's not going to be any real threat.
PCs have been a commodity for more than a decade now and Apple is still selling Macs at good margin. I think for Apple they like to view their hardware as part of a experience which includes iOS,App store,retail stores and of course the Apple brand itself. As long as they can move meaningful number of devices to be relevant like Mac i think they will be fine. May be not top 3 tech company but i don't think Apple should care about those things.
I think for Apple they like to view their hardware as part of a experience
That's exactly it. And today that experience spans what I carry in my pocket, what I use in transport, what I work with at my desk, and what I use in my living room.
The retail experience is another world apart from the competition. I have little doubt that experience will soon span what I wear and how I feel.
From a guy who dumped AAPL @ $97 5 yrs ago. And exactly 12mos later Steve Jobs showed up to present the iPad (and iPhone4, Macbook Air...later on). I thought the core value of a good VC is seeing the big trend, along with seeing the financial potential.
I switched to Apple products completely, because the UI and experience is _much_ better. In my opinion Google is the company whose UI really sucks. For example try Google Maps today. It is a great product but when you click on any point of interest, you will get a large popup on the left, that covers 1/3rd of the screen. You won't be able to see the map anymore. The same kind of dysfunctional UI philosophy is spread everywhere in Google products (see how the dial pad on Android vanilla UI is made smaller, and hard to use, for sake of writing more details to confuse the user). See how google contacts on an Android phone contain all contacts thrice, and mostly irrelevant because they are imported from gmail.
I know it sounds a bit one-dimensional to discuss who will be the "top tech company" with UI or user experience differences, but that is ultimately what made me pick one product line instead of the other.
Agreed. When is a fad not a fad? I don't know. It might last 20 years from start to finish but I can't see them solving their core business problem which is they don't know how to make money any way other than ads and data collection. The pendulum is going to swing the other way eventually.
Re Apple, I get his point about their cloud offering sucking and hence they are losing out on the biggest trend. But Apple is also hyper-focused on user-experience and design, which is a huge strength.
What I really don't get is his claim that Facebook will be one of the top 2 tech companies? Really?! Why? Because they are riding the cloud wave?!! FB, the social network itself is so ready for disruption that I believe it'll be dethroned just as easily as MySpace was. It's just a matter of someone figuring Social Network 3.0.
> by 2020, the biggest tech company in the world — Apple — will cease to be the most important, and won’t even be in the top three....he predicted that the top three tech companies, instead, will be Google, Facebook “and one that we’ve never heard of.
Okay, a couple of questions here:
1. Is Apple the top three most important company even right now? Don't mistaken me, I love Apple.
2. Like many doubters here, I wonder if Facebook can even be relevant in 2020. Google succeed because it does not limit itself to its original service (searching) and created tons of other cool services that a lot of people want. The question is whether Facebook can pull that off? Not yet at least.
3. If there is some company beating Google I am thinking of a company in AI with some tech breakthrough. But then the question is, would Google have enough smart people to "copy" it and make it better? I am somewhat awed at what Google can achieve at this moment. Next Google please comes up.
1) AAPL is arguably the most important company, full stop -- not just in tech. With the highest market cap in the USA, and a substantial share of mobile phones using both its hardware and software, it is the top dog.
2)
I'll take the other side of that bet without hesitation. Google makes headlines because it does a bunch of cool shit, but it still makes its money on advertising. (Something like 65% of its revenue comes from google.com search: http://investor.google.com/financial/tables.html)
I think the fact that Facebook has been leveraging its expensive stock to aggressively counteract (i.e. buy) potential rivals makes me somewhat confident that it will be relevant in 6 years. The fact that they are investing in potential big future winners like Oculus VR increases my confidence. At the very least it's cool shit, and that puts them in the headlines :)
3)
Who knows what future crazy tech breakthroughs will occur. There are unknown unknowns, and they will change the world and make the pioneers wealthy. Google embraces that possibility and continues to strive for more breakthroughs. If none of them succeed, at least they have their 50 Billion dollars of yearly revenue from advertising sales to fall back on...
My bet is that Google and Amazon will come out on top. My thesis on each of the big 4:
Google: Some investments in Google X and other technologies will pay off and Google revenue stream mix will change. Size of pay-off will offset or eclipse current ad revenues.
Amazon: Revenue growth will continue for the foreseeable future. They are still a tiny fraction of their addressable market, and have a humungous moat. Amazon will achieve profitability not by raising prices, but by squeezing suppliers (a la Walmart).
Facebook: Zuck does not think the best use of capital is reinvestment into core Facebook (see investment in WhatsApp + Oculus). That's fine, but has no track record of success with this. Oculus is very promising, but I was much more excited about it when it was a standalone company and John Carmack et al were equity compensated. The addition of Abrash is exciting though. I think this could be Facebook's Youtube if they play it right, but still not going to change Facebook's 5yr+ trajectory.
Apple: I largely agree with Fred Wilson about commodification of hardware.
And what of the commodification of plastics & textiles. Nike still seems to be able to carve out a big profitable chunk with them. In fact, how do you know it's about hardware? What if Apple isn't selling hardware? Is Nike selling plastic & fabric?
That said, Apple has done something that really alienated me: no iTunes support for Android, like they provide for Windows.
I had my music set up very well using Apple's paid service, then discovered that I was out of luck on my Android phone. A sister in law hit the same problem, bought an Android tablet and had no easy access to her years of iTunes purchases. It is on my todo list to export thousands of songs for her to the Amazon Music Cloud.
So, I now use Amazon for music, Kindle, and Audible books. I also really like iTunes and Apple's eBooks, but they lost me as a customer by not supporting my Android phone. I use mostly Apple gear, but it is fun having an Android phone for that different experience.
Some are suggesting here that we ignore Fred Wilson because he sold his Apple stock in 2009. Does this mean your opinion is invalid if you've ever been wrong? I have a word for people who are never wrong - lucky.
This seems wrong from an engineering AND MBA point of view. As designing and manufacturing electronics becomes more automated, the workflow for designing computer hardware will be very similar to software development (it pretty much already is).
From an MBA perspective, Apple just owns more of the value chain in software, i.e. some of the silicon via the mobile processors, and the proprietary cases. Other than that, most of the hardware follows pretty closely with the industry standard tech [intel's roadmap]. They don't seem excessively tied up at all.
The only prediction of his I find interesting is the Twitter one. I think he's extremely far off base. Twitter won't be a top 30 tech company by 2020, they'll barely be relevant at all. They're losing steam now, and it's going to accelerate dramatically over the next few years. Twitter failed at its original mission: to be a communication platform. Mostly it's a one-way celebrity gawking platform. WhatsApp, Snapchat, and numerous others accomplished what Twitter was supposed to be, but never became, and in the process they've made Twitter nearly pointless. In another six years, 140 characters will be viewed as a curious absurdity; teens in 2020 will laugh when they realize it derives from limitations on messaging from the pre-smart phone era 15 years prior. You'll know Twitter is sinking rapidly when they lift the 140 limit out of desperation.
Apple surprisingly remained in its mindset from the 90s. Such backwards things like using proprietary ports in the age of ubiquitous USB really explains Apple's way of thinking. I.e. complete lock-in, no interest in system portability and etc. While it served them well in the past, it can also be their downfall in the future.
Apple made a connector that they hope might last for 10 years like the 30 pin connector. During that time, USB has gone through mini, micro a/b and now the micro USB 3 connector, and the USB forum recently announced that they are working on a new connector that should be reversible like the lightning connector. Meanwhile, Apple can choose to implement any standard they like in Lightning, just like the 30 pin connector has supported analog and digital audio, composite and component video and HDMI, all while keeping the connector backwards compatible for the main features (charging, USB and audio).
Apple has held onto many proprietary interfaces in the face of much more widely adopted standards, but usually the products have been better off for it. Sure, the one-button mouse is horrendous, but FireWire was better than USB, the Lightning charging port is miles ahead of Micro-USB and other alternatives, and iOS development is not good, but not as bad as Android.
The average user wouldn't care much about proprietary ports. What's exactly mindset from 90s when it was the first to bring smart phone to the mass market? Every company has its pros and cons. If Apple won't come out with anything new and come out with lacklustre updates, I might short it. But back in 2009, it was a laughable decision by Wilson. Investing is much irrational. One shouldn't be so emotionally invested in or against any company regarding money.
Funny you mention USB. When the iMac came out, it was roundly criticized for offering USB (then rather new) as the only connectivity, and eschewing the then-ubiquitous floppy drive. Such backwards thinking!
Heck, some of Apple's "proprietary connectors" even become the standard, such as Mini DisplayPort.
the brilliant proprietary lock-in is actually iMessage. once you've been using it for a while with others in the apple ecosystem, getting out is amazingly painful since your contact information is cached as iMessage capable for weeks on your contacts' devices. you can call apple support to remove the number from your icloud account but it still needs to time out in your network.
[+] [-] millstone|12 years ago|reply
So consider the track record.
[+] [-] mikeyouse|12 years ago|reply
[+] [-] subdane|12 years ago|reply
[+] [-] unknown|12 years ago|reply
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[+] [-] unknown|12 years ago|reply
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[+] [-] georgebarnett|12 years ago|reply
[+] [-] beedogs|12 years ago|reply
[+] [-] jayd16|12 years ago|reply
Once again they're losing marketshare to commodity hardware now that the path has been paved. You can assume they'll strike lightning again but we'll see.
[+] [-] fleitz|12 years ago|reply
To me the biggest threat to iOS is the web, not Android, as long as everyone continues to push Apps on their website there's not going to be any real threat.
[+] [-] glasshead969|12 years ago|reply
[+] [-] robg|12 years ago|reply
That's exactly it. And today that experience spans what I carry in my pocket, what I use in transport, what I work with at my desk, and what I use in my living room.
The retail experience is another world apart from the competition. I have little doubt that experience will soon span what I wear and how I feel.
[+] [-] jerryhuang100|12 years ago|reply
Source:
http://www.businessinsider.com/c/536798b6eab8eaa7579683e0
http://avc.com/2009/01/selling-apple-a/
[+] [-] robot|12 years ago|reply
I know it sounds a bit one-dimensional to discuss who will be the "top tech company" with UI or user experience differences, but that is ultimately what made me pick one product line instead of the other.
[+] [-] sparkzilla|12 years ago|reply
[+] [-] msandford|12 years ago|reply
[+] [-] mikeyouse|12 years ago|reply
[+] [-] raheemm|12 years ago|reply
What I really don't get is his claim that Facebook will be one of the top 2 tech companies? Really?! Why? Because they are riding the cloud wave?!! FB, the social network itself is so ready for disruption that I believe it'll be dethroned just as easily as MySpace was. It's just a matter of someone figuring Social Network 3.0.
[+] [-] jw2013|12 years ago|reply
Okay, a couple of questions here:
1. Is Apple the top three most important company even right now? Don't mistaken me, I love Apple.
2. Like many doubters here, I wonder if Facebook can even be relevant in 2020. Google succeed because it does not limit itself to its original service (searching) and created tons of other cool services that a lot of people want. The question is whether Facebook can pull that off? Not yet at least.
3. If there is some company beating Google I am thinking of a company in AI with some tech breakthrough. But then the question is, would Google have enough smart people to "copy" it and make it better? I am somewhat awed at what Google can achieve at this moment. Next Google please comes up.
[+] [-] goo|12 years ago|reply
1) AAPL is arguably the most important company, full stop -- not just in tech. With the highest market cap in the USA, and a substantial share of mobile phones using both its hardware and software, it is the top dog.
2) I'll take the other side of that bet without hesitation. Google makes headlines because it does a bunch of cool shit, but it still makes its money on advertising. (Something like 65% of its revenue comes from google.com search: http://investor.google.com/financial/tables.html)
I think the fact that Facebook has been leveraging its expensive stock to aggressively counteract (i.e. buy) potential rivals makes me somewhat confident that it will be relevant in 6 years. The fact that they are investing in potential big future winners like Oculus VR increases my confidence. At the very least it's cool shit, and that puts them in the headlines :)
3) Who knows what future crazy tech breakthroughs will occur. There are unknown unknowns, and they will change the world and make the pioneers wealthy. Google embraces that possibility and continues to strive for more breakthroughs. If none of them succeed, at least they have their 50 Billion dollars of yearly revenue from advertising sales to fall back on...
[+] [-] Zaephyr|12 years ago|reply
I hope he's wrong. Cheap commodity hardware is such a pain over the long term. Plus, a desire for quality goods bodes better for US manufacturing.
[+] [-] lquist|12 years ago|reply
Google: Some investments in Google X and other technologies will pay off and Google revenue stream mix will change. Size of pay-off will offset or eclipse current ad revenues.
Amazon: Revenue growth will continue for the foreseeable future. They are still a tiny fraction of their addressable market, and have a humungous moat. Amazon will achieve profitability not by raising prices, but by squeezing suppliers (a la Walmart).
Facebook: Zuck does not think the best use of capital is reinvestment into core Facebook (see investment in WhatsApp + Oculus). That's fine, but has no track record of success with this. Oculus is very promising, but I was much more excited about it when it was a standalone company and John Carmack et al were equity compensated. The addition of Abrash is exciting though. I think this could be Facebook's Youtube if they play it right, but still not going to change Facebook's 5yr+ trajectory.
Apple: I largely agree with Fred Wilson about commodification of hardware.
[+] [-] jp555|12 years ago|reply
[+] [-] mark_l_watson|12 years ago|reply
That said, Apple has done something that really alienated me: no iTunes support for Android, like they provide for Windows.
I had my music set up very well using Apple's paid service, then discovered that I was out of luck on my Android phone. A sister in law hit the same problem, bought an Android tablet and had no easy access to her years of iTunes purchases. It is on my todo list to export thousands of songs for her to the Amazon Music Cloud.
So, I now use Amazon for music, Kindle, and Audible books. I also really like iTunes and Apple's eBooks, but they lost me as a customer by not supporting my Android phone. I use mostly Apple gear, but it is fun having an Android phone for that different experience.
[+] [-] paul_f|12 years ago|reply
[+] [-] ziadbc|12 years ago|reply
From an MBA perspective, Apple just owns more of the value chain in software, i.e. some of the silicon via the mobile processors, and the proprietary cases. Other than that, most of the hardware follows pretty closely with the industry standard tech [intel's roadmap]. They don't seem excessively tied up at all.
[+] [-] unknown|12 years ago|reply
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[+] [-] unknown|12 years ago|reply
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[+] [-] adventured|12 years ago|reply
[+] [-] shmerl|12 years ago|reply
[+] [-] snom380|12 years ago|reply
[+] [-] qq66|12 years ago|reply
[+] [-] harywilke|12 years ago|reply
[+] [-] pinaceae|12 years ago|reply
http://en.wikipedia.org/wiki/USB#Connectors_types
ubiquitous, indeed.
[+] [-] captainaj|12 years ago|reply
[+] [-] millstone|12 years ago|reply
Heck, some of Apple's "proprietary connectors" even become the standard, such as Mini DisplayPort.
[+] [-] ryanburk|12 years ago|reply
[+] [-] alayne|12 years ago|reply
[+] [-] badman_ting|12 years ago|reply