- In 2008, Apple made the most significant keynote in the iPhone era when it announced it would allow third party developers and a 3G version. This tipped the iPhone.
- In 2009, Jobs was ill and Phil Schiller delivered the keynote. He introduced new Macbook Pros and the iPhone 3GS. (Aside: I seriously wonder if Phil Schiller gets more nervous before pitching things to Steve Jobs than doing the "warm up" before Steve takes the stage.)
- In 2010, the iPhone 4 was introduced, but everyone already knew about it thanks to Gizmodo. (Aside: The 2007 iPhone keynote is the gold standard of keynotes. Nothing will ever come close. Seriously, it's still awesome to watch and I already know everything that will be said)
So today's keynote that focused on iOS 5, iCloud, and Lion, bucked the recent trend. Ironically, my local 5:30 news still sent a reporter to the Apple store to report on the new developments. It's unclear if the news station realized that absolutely nothing, not even Lion, would be shipped to the store to be sold. Additionally, as anyone who has ever tried to talk to Apple store employees knows, they know nothing about new products. In fact, many of them don't read rumor sites or watch the keynotes and instead wait to learn about new things directly from Apple. This is because Apple does not like its employees feeding information to these rumor mills (although it has been happening more lately).
So why is this significant and how does it relate to the economy? Well, last month I attended a the conference titled, New Building Blocks for Jobs and Economic Growth: Intangible Assets as Sources of Increased Productivity and Economic Value. The keynote speaker was Ben Bernanke, but he didn't say much of interest except "the Tweeter". He did reference the Solow growth model's technology level input and how half of the US's increase in output over a period of time is due to the increase in this factor. (Aside: Robert Solow spoke at my school's graduation, but not at my ceremony. I was disappointed. Our speaker was not so hot. At least he was short.) After Bernanke was rushed out as quickly as he was rushed in (what's the value of his time?), there was a roundtable discussion. The star of this panel, in my opinion, was Edward Jung who is the CTO for one of the coolest companies around, Intellectual Ventures in Seattle. Any company that comes up with stuff like this AND this is off the charts awesome.
During the panel discussion, there were four topic areas and here are some points I thought most striking from each topic:
Global Competition and Collaboration
- Closed door innovation is impossible because any new idea depends on previous findings/ideas.
- It only takes 50-100 feet to build internal walls. Real innovation occurs when people are brought together.
- People closest to the problem are most likely to solve it. It is easier to move culturally relevant people to the problem than to bring the problem to the solver.
- The difference in value produced by the most productive and least productive workers is small in tangible assets but massive in intangible assets.
- Biggest problem facing the US is equality of human capital, not just wages.
- GAAP Accounting is an antiquated way of measuring value. (Aside: Prepping for the CPA exam, I can say I support this statement 1000%). Cash flow and profits often cause a business to tell stories rather than show data. Need to measure value of business decisions/relationships.
- Nothing destroys growth like an over abundance of metrics because all the metrics push everyone in the same direction and brings the best down to average.
- Information is only valuable if it affects the way decisions are made.
- Need continuous learning to deal with future changes. More of the workforce is working later in life and needs to be continually educated.
- Capital goes to opportunity. Show it a way to make money and it will appear.
These are some of the ideas I've been thinking about since the conference. Apple's announcements today fall in line with many of these sentiments. The iPhone and anything Apple builds isn't much tangibly much different (better or worse is subjective) than anything Google, RIM, HTC, etc can pump out. As I attempted to hammer at in my post on RIM in April, Apple has a sizable advantage on RIM in software. Everything we saw today widens that gap, significantly; RIM is down ~30% since my post (Aside: I exited my short position early and left a lot of money on the table. Never again.) It's not only the iPhone that Apple has an intangible advantage. The iCloud platform appears to be better than anything Google or Amazon currently over. Specifically in the cloud music field, Apple was able to convert its purchase of Lala into something of value that exceeds anything the competition can offer.
I hesitate to write the next sentence at the risk of sounding too much like a fan boy, but I would write this about any company that acts like Apple does, even if Steve Jobs wasn't the CEO and it didn't make gadgety products. Apple is a global leader in converting intangibles of any state into products and realizing substantial profits on them. In the keynote today, Jobs said that Apple has been, "working for ten years to get rid of the file system so the user doesn't have to learn about it." This shows not only remarkable foresight, but also a commitment to invest time and money into something that won't be physically produced and, as it turns out, actually sold. These are the types of investments more companies need to make. Being committed to intangibles allows Apple to create dynamite products because the products are not made until the underlying ideas (software) are in place to make the user experience ideal: Apple does not rush products.
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