Boomerang: Apple's "It Just Works" Promise to Customers

iPhone Maps app icon: what's wrong with this picture?

Mapplegate, the PR fiasco surrounding Apple's new iPhone mapping software, doesn't appear to be going away anytime soon. You can read all about the details elsewhere but I wanted to make a couple general observations.

First, flashback to 2008 and Apple's launch of their cloud email/calendar syncing product called MobileMe. From MacRumors and Fortune:

Mr. Jobs called the MobileMe team into a town hall meeting in one of Apple’s auditoriums after the service launched with problems and garnered unflattering reviews from noted tech commentators like Walt Mossberg of The Wall Street Journal. 

Mr. Jobs reportedly asked the assembled engineers and other MobileMe team members, “Can anyone tell me what MobileMe is supposed to do?” When one of those employees then volunteered a satisfactory answer, Mr. Jobs followed up with, “So why the fuck doesn’t it do that?”

He (Jobs) then spent some 30 minutes berating the team, telling them that they had “tarnished Apple’s reputation,” and that they, “should hate each other for having let each other down.” 

He added, “[Walt] Mossberg, our friend, is no longer writing good things about us.” 

Jobs appointed a new executive on the spot to run the MobileMe team. 

The MobileMe story may suggest that the iron fist with which Jobs ran Apple may now be missing, but it also helps explain why Apple's new map software problems are getting so much media attention.

Ever since Jobs returned to Apple the mantra he emphasized over and over again about new products was "It Just Works". What you're seeing here is what happens when, contrary to what you promise customers, something not only doesn't work but actually fails in very unpleasant ways. From NY Times tech guru David Pogue:

99 percent of it (iOS6 Maps), Apple says, is accurate. Unfortunately, when the overall data set is that huge, even half a percent of faulty data means a lot of flaws. And the trouble is, you never know when you’re going to encounter one. One wild goose chase, and you’ll find it hard to trust the software again. 

So Apple has written a beautiful, well-designed app — and fed it questionable data. It’s as though you just got a $1,500 professional coffee maker and then poured moldy beans into it.

The actual map with safe instructions

Whenever Apple stumbles, be it Maps, MobileMe, antenna-gate, Foxconn sweat shops, and my personal favorite (because I experienced it) - the irrecoverable Time Capsule hard drive failure - people pounce. People love to call out hypocrisy and shoot down 'hollier than though' types at the first sign of indiscretion. They did the same thing with Google and its 'Don't Be Evil' motto everytime Google engaged in an anywhere remotely questionable practice. It also doesn't help Apple right now that it's the world's largest company in terms of market capitalization and price to perfection, meaning it can't afford to execute sloppily.

The blow to Apple's promise to customers that everything just works certainly doesn't help the company. But whether or not Apple's maps fiasco figures prominently into this blog's prediction that Apple is nearing its high water mark remains to be seen. For more on the future of Apple, Holman Jenkins of the WSJ also has a good read.

2012 Predication #2: iTV Will Prove Apple's Waterloo

Should Apple's all but confirmed iTV make landfall in 2012 I expect that it will serve as a fitting high-water mark for the high-flying tech company.

In this sense perhaps the Battle of Waterloo, which marked the once-and-for-all final defeat of Napoleon, is the wrong metaphor. Instead the Battle of Borodino, a contest which Napoleon won and allowed him to enter Moscow but also ultimately led to his later retreat from Russia in 1812, may prove a better analogy.

All great runs ultimately meet the same fate

I'm sure the iTV will be a huge hit and will make a great addition in Apple's ecosystem. I'm so frustrated with the TV market that it was the subject of a rant a few months back. Let me be clear: TVs are begging for the Apple treatment.

And there is no doubt that Apple will be a successful, highly profitable company for years to come. Apple is more than Steve Jobs, and there is enough magic and momentum to sustain success for the next 3-5 years, at least. But having said all that some recent trends for Apple aren't looking so hot.

Apple is squarely in the competition's cross-hairs and very few -- if any -- companies have historically been able to sustain the level of success achieved by Apple this past decade. And the reasons are well known: people leave, get rich and lazy, retire, distracted, all of the above.

But perhaps the biggest problem will be Apple's own DNA, which is based on cult of personality, not long lasting institutions. Steve Jobs lionized and embodied the Great Man school. In contrast Bill Gates' favorite business book was Sloan's My Years with General Motors, a rather dull treatise on the art of running a large corporation through a series of committees. As so often happens following the departure of a dominant, charismatic leader there is growing talk of an Apple palace coup. Jockeying and politics won't make success any easier in Cupertino.

There is nothing Apple does that can't be replicated, and part of the evidence of that comes from Apple increasingly turning to the courts to fight its battles. Steve Jobs' seethed vitriol from his deathbed over Android's success. Because Apple controls its products end-to-end it has to flawlessly execute by itself every time. But there are literally hundreds of younger, hungrier companies competing with Apple. In some ways the relative demise of Apple is simply a numbers game.

The iTV will likely be insanely great in the way it integrates and simplifies our digital lives, and it is a product I'm very much looking forward to. But I predict that it will also mark the plateau of the greatest run in tech history.

Recapping The PolyCapitalist's 2011 Predictions

For those keeping score three topics I made 2011 forecasts on were:

1. Rise of Android
2. China's bubble
3. U.S. Housing

On Android, the verdict is in:

The U.S. housing market officially double dipped in May and then continued to fall, so that call looks correct as well.

The China prediction is a bit murkier, but here are some points worth noting:

• The Hang Seng and Shanghai stock markets are in a bear market and down roughly 20% for the year, or 30% since May. From its peak in 2008 Shanghai is off 60%.
• Housing prices are softening quickly; in Beijing new home prices dropped 35% in November alone.
• Coastal cities such as Wenzhou and Ordos appear to be experiencing a credit crisis with reports of businessmen leaping off rooftops.
• Hot money appears to be flowing out of the country: China's $3.2 trillion in foreign reserves have been falling for three months despite a trade surplus.

Things aren't shaping up too well for China or trade relations with the U.S. in 2012 either. For more on this see here, here, here and here.

Overall, does 2.5 out of 3 predictions sound about right?

Two more quick ones: bullishness on gold has been a steady theme since starting this blog in May 2010. And how did gold do in 2011? Despite the autumn selloff gold priced in U.S. dollars has returned around 10%. Not too shabby given that the S&P500 is flat YTD. I also managed a correct mid-year bearish call on the euro.

Check back later for The PolyCapitalist's 2012 predictions.

Recommended links

1. Is there a shadowy plot behind gold? (FT)

2. Ray Dalio video interview (Charlie Rose). Ray doesn't have the most compelling television presence, but as the world's largest hedge fund manager he's clearly doing something right. Here is an interesting earlier read from the New Yorker on him and his firm, Bridgewater.

3. Eurozone summit - despair and backbiting in the corridors of power (Telegraph)

4. Steve Jobs Was Willing To 'Rip Off' Everyone Else... But Was Pissed About Android Copying iPhone? (TechDirt)

5. Michael Pettis Talks China (Infectious Greed)

6. €1.5bn Dexia loans used to buy shares in...Dexia (FT)

7. Generation X Doesn’t Want to Hear It (Emptypage)

Steve Jobs RIP (1955-2011)

The King of the BHAG is dead.

Steve Jobs (1955-2011)

Official statement from the Apple Board:

We are deeply saddened to announce that Steve Jobs passed away today. 

Steve’s brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve. 

His greatest love was for his wife, Laurene, and his family. Our hearts go out to them and to all who were touched by his extraordinary gifts.

For more reflections on Jobs recent resignation as CEO and some rare, early interview footage of the Apple co-founder see End of a Tech Era.

One Chart: Why Apple, Microsoft, Oracle, etc. are Teaming-Up Against Google

Here's last year's prediction, made back when Android had under 25% of the market and was smaller than the iPhone. Below are the latest comScore market share figures, which have Google's Android up 5.4% in three months and rapidly closing in on 50% of the U.S. smartphone market.

Top Smartphone Platforms 3 Month Avg. Ending Jul. 2011 vs. 3 Month Avg. Ending Apr. 2011 Total U.S. Smartphone Subscribers Ages 13+ Source: comScore MobiLens
	Share (%) of Smartphone Subscribers
	Apr-11	Jul-11	Point Change
Total Smartphone Subscribers	100.0%	100.0%	N/A
Google	36.4%	41.8%	5.4
Apple	26.0%	27.0%	1.0
RIM	25.7%	21.7%	-4.0
Microsoft	6.7%	5.7%	-1.0
Symbian	2.3%	1.9%	-0.4

Look no further than above for an explanation of the strange bedfellows which recently united against Google.

End of A Tech Era - Steve Jobs Resigns as Apple CEO (Video)

Details here.

Sadly, this is likely grim news as I imagine the only reason Jobs would resign is for health reasons.

The multi-episode documentary Triumph of the Nerds is one of the first films to chronicle the early rise of Mr. Jobs and Silicon Valley, as well as Jobs' legendary rivalry with Bill Gates. It features rare, candid interview footage with Jobs.

Embedded below is the Jobs-Apple focussed episode 3, and if you want to skip ahead to when Jobs comes on go to the 9:45 mark.

P.S. The earlier Triumph of the Nerds episodes 1 and 2 are also on Google Video.

Software Is Eating The World

The tech world was roiled this week by Google's acquisition of Motorolla and HP's corporate makeover. Here's a good read from Marc Andressen (HP board member, VC and Netscape co-founder) on the current state of tech and where things are headed.

Review: Unlocked/Off-Contract Smartphone + giffgaff = Mobile Heaven

Does your phone company advertise with a gimp?

I regularly travel back and forth between the U.S. and the U.K., with extended stays (approximately a month) during each trip. Every time I make the transatlantic jaunt I receive a stark reminder of how much better Brits have it when it comes to mobile providers. Before I explain, a little further background:

Last year after owning all of the first three iPhones, each locked and on multi-year contract to AT&T, I made the smartphone switcheroo. Crucially, I decided to purchase my new device outright to avoid any multi-year contracts or being locked to a single carrier. In exchange for paying a relatively hefty ($500+) up front for an unsubsidized smartphone, my total cost of ownership should come in around or under $1K, or 1/2 to 1/3 of the $2-$3K cost for something like the iPhone 4 on two-year contract.

How are the above savings possible? Part of the answer is the wonderful U.K. mobile provider with the quirky name called giffgaff.

Still think the name 'giffgaff' is weird? It gets weirder: my mobile plan name is called the Hokey Cokey. Funny name alright, but this plan is anything but hokey: for only £5 a month (about $8) I get 60 UK anytime minutes, 300 UK texts, 100MB/day data, a free extra minute for every minute I get called, plus free giffgaff to giffgaff calls and texts on top of that.

Another nice feature that giffgaff offers is that I don't have to pay when I'm not in the U.K., and when I don't pay I don't lose my phone number. I'd be more excited about this if I was getting charged the $80 or so I pay in the U.S. for a comparable plan, but it's nice all the same.

$8 for all that? Yep. There must be a catch? Yes, but it's pretty minor.

First, the Hokey Cokey is a giffgaff 'labs' plan, meaning it's experimental and may not be around after June. Also, the 100MB/day data* (see comments for further discussion) portion of the plan is not normally a part of the Hokey Cokey, but is being offered to all giffgaff customers through at least the end of May June.

Bottom line: there is no guarantee that I'll have the same, exact plan come June. What then? If the Hokey Cokey goes bye-bye for jusst £10 a month (about $17) I can sign up to to next plan, which has 250 UK anytime minutes, unlimited UK texts, and unlimited mobile Internet (plus the same free giffgaff to giffgaff calls and texts as the Hokey plan).

So the plans and pricing sound incredible, but what about the network coverage? Giffgaff runs on O2's network, which is the second largest in the U.K. So far as I can tell I receive the same service quality and coverage as a regular O2 customer. In London, for example, call quality is excellent and I have no problems streaming music while on the move at the highest bitrate (320 kbps) offered by Spotify (which is another great thing the U.K. has going over the U.S., and perhaps the subject of a future review).

Review: TripIt, My New Favorite Time Saving Smartphone App (Video)

The key value add: being able to simply forward emails I receive from the airlines containing my flight details/confirmations to TripIt, and then TripIt does two things:

1. automatically and instantaneously syncs all that info to my Google calendar
2. stores it on my Nexus S TripIt app 

No more manually typing flight information into my calendar, and no more searching for emails to dig up a confirmation number.

And it does a couple other nifty things mentioned in the video below. Marvelous.

Adios iPhone: On Making the Smartphone Switcheroo

The iPhone is unquestionably one of the biggest game changing consumer goods in recent memory. Netscape founder Marc Andreessen has characterized it as a "wormhole product", seemingly delivered unexpectedly to Earth straight from the heavens.

Just how revolutionary was the iPhone? At the time of its dramatic January 2007 introduction in San Francisco by Apple CEO Steve Jobs, Canada-based Research in Motion -- then the world's leading mobile device maker -- dismissed it, believing the iPhone as described by Jobs to be an "impossible" engineering feat.

I've been a very happy iPhone user ever since the original went on sale 3.5 years ago. Each successive iPhone iteration has delivered significant enhancements. And I've even stood in a relatively short iPhone purchase wait line (but a line nevertheless), anxious to upgrade as soon as the latest version became available. That was until the announcement of the underwhelming iPhone 4.

iPhone Alternatives

The failure of the iPhone 4 to impress, combined with the changing smartphone competitive landscape, led me to take a hard look at two emerging iPhone alternatives: Google's Android and Microsoft's Windows Phone.

Microsoft's smartphone efforts the past few years have been nothing short of a complete failure. But Redmond's new Windows Phone software shows real promise. I was particularly impressed with the creativity that went into the elegant and innovative new Windows Phone user interface, called Metro. It's intuitive and refreshing, and the whole scheme is particularly pleasing to the eye on one of Samsung's Super AMOLED screens.

With the new user interface and other encouraging signs across various Microsoft product lines (i.e.,  ZunePass, SkyDrive, Xbox Kinect), I have growing confidence that the Washington-based software behemoth is recovering its form. In short, Microsoft has a potential winner on its hands. However, at this point in time there are just too few apps available for Windows Phone. Further, many features widely available on the iPhone are missing (e.g., copy/paste, multitasking, etc.).

What about Android?

Smartphone Wars: Android vs. iPhone

Google and its hardware partners, such as Motorola, Samsung, and HTC, have made big strides in 2010.  The iPhone/Android app gap has largely closed, and Android's market share is about to (or already has) overtaken the iPhone.

In contrast with the two versions of the iPhone currently available for sale (iPhone 4 and 3GS), there are some 80+ different Android devices. This greater selection -- and the increased freedom of choice Android offers over the iPhone in general -- is considered to be both Android's greatest strength and biggest weakness.

Many find the array of Android choices somewhat dizzying, while others want features like a Blackberry style keyboard, or a removable battery, or a larger 4" screen for browsing the internet -- all things you can find on an Android device, but not on an iPhone.

Ladies and Gentlemen, We Have a Race!

Let's be clear up front: the idea that there is an "iPhone killer" lurking out there somewhere over a not so distant hill is a myth. The iPhone has established critical market share mass, and it will likely remain a solid smartphone for the foreseeable future. Barring a major snafu millions of iPhones will continue to ship.

While 'power' smartphone users have had some great Android options to choose from for awhile now, the more typical smartphone owner basically just wants their technology to be simple and work. I suspect many of these folks who are familiar with Android have probably heard that Google's software is simply not as polished (in terms of ease of use) as Apple's.

However, Google just came out with a new smartphone, the Nexus S; it has been thoroughly reviewed and the verdict is in: it's a winner.

The Nexus S is the "official Google smartphone". It is manufactured by the same South Korean tech powerhouse which provides many of the iPhone's core components (Samsung). In my opinion, it is perhaps the first true mainstream alternative to the iPhone. 

Not only does the Nexus S possess hardware which can compete head-to-head with Apple's flagship iPhone 4, but the latest Android software (called 'Gingerbread') is intuitive and easy enough for the average iPhone user to switch to without having to spend much time getting up to speed on a new system.

Google's Nexus S

Long story made short -- the Nexus S not only delivers, but it also delights. The total experience is not just comparable to the iPhone, but in many ways superior. This is particularly true if you use Google services such as Search, Maps, Gmail, and especially Google Voice (which I reviewed here).

The Myth of the One Size Fits All Smartphone

The Nexus S, like all smartphones, has shortcomings because, like the iPhone, it simply can't be all things to all people.

For example, the Nexus S is perhaps the ideal international smartphone for a bevy of reasons; however, if you're based in the U.S. and you need a 3G carrier other than T-Mobile (the Nexus S can't utilize AT&T's 3G network, just AT&T's 2G service) then this iteration of the Nexus S (new versions of the Nexus S may be launched on the other carriers) may not be right for you.

The Nexus S also can't take advantage of the even higher speed 3.5G / 4G data networks which are starting to roll out in the U.S. Last, some Android apps are not as fully fleshed out as they are on the iPhone. For example, the Android Bloomberg app doesn't allow you to reorder your news preferences like you can on the iPhone.

Change is Hard

Ignoring network considerations, my best guess is that the majority of users would find the Nexus S comparable to the iPhone 4 in terms of overall pluses and minuses, and superior to the 3GS. Equal, however, is hardly a good enough reason to switch, so I don't expect the Nexus S to generate blockbuster iPhone-like sales.

Many users are understandably reluctant to switch to a different smartphone platform, particularly those who have made a significant investment in iPhone apps and accessories. If you are in this camp then you may be better off sticking with your iPhone.

But if you're new to smartphones, or ready to make a switch, then you should definitely give Android phones like the Nexus S a serious look. And for those worried about having to learn a whole new smartphone I think you'll be pleasantly surprised with how familiar Android seems compared to the iPhone.

And for those making the switch to Android, here are some things you can look forward to: I believe 2011 could very well be shaping up to be the Year of Android. What do I mean by that? We already discussed Android's rapid market share growth. With that growth we should see what remains of the the app gap disappear in 2011. And Android's next operating system, called Honeycomb, is generating significant positive buzz and is set for a Q2 2011 launch -- just before Apple typically launches its latest iPhone. Other hardware advances, such as battery sipping dual-core processors, are slated for Q1 release in Android devices. Overall, it's clear that Google and its partners are innovating at a faster clip than Apple.

In the battle of the smartphones, it certainly feels like Google has captured the momentum. For a variety of reasons, Google may also have the medium-term upper hand over Apple.

How Much Does Your Phone Say About You?

There has been a lot made of what your phone, like your car, says about you.

One emerging area where your choice of smartphone may be saying something important about you is the price you are charged when shopping online.

Recently the growing use by online retailers of 'dynamic pricing' has come to light. Reports have emerged that Google Chrome users are offered lower prices than Firefox users (apparently Chrome users are considered to be more savvy online shoppers). It's somewhat unclear how widespread the practice of dynamic pricing has become.

Perhaps the takeaway here should be that regardless of whether you feel your phone choice reflects the deeper you, our minds are naturally drawn to outward symbols such as cars, clothes and now smartphones. Like it or not, your consumer choices do say something about you, and perhaps there's a good reason why.

The Politics of Technology

While the Nexus S is the smartphone that led me to abandon the iPhone, the question of "which smartphone?" actually carries larger implications for even non-geeks.

Google and Apple take markedly different approaches to technology. Whether one approach is "better" depends on your perspective, which end product or service we're talking about, and above all else generates heated debate. What is not up for debate, however, is which platform is more open to individual expression and choice -- values which the western democratic world has generally held in high regard.

Why the difference? Whether or not Google fully walks the "don't be evil" talk is open to question, in my opinion. However, when it comes to Apple's approach to technology I think Rich Karlgaard's assessment of Steve Jobs psyche pretty much nailed it.

Closing Thoughts

As discussed previously, the Nexus S and Gingerbread now offer a near iPhone like experience in terms of intuitiveness, simplicity and ease of use. I concur with those who claim the iPhone still has the overall edge in these categories. For now. The gap has closed (and in my opinion will continue to do so) to such a degree that it is no longer credible to claim that if you want a simple, trouble free, and premium smarthphone experience then your only choice is the iPhone.

The bottom line: while it's certainly not black and white, if you prefer Google's approach to technology over Apple's then it's now safe to make the switch away from the iPhone without much risk of regret.

Note: for more Nexus S reviews see also CNET's video review, or from the slightly-to-more progressively geeky writeups respectively by Wired, Engadget, and AnandTech.

Further note: if you read the often entertaining comments sections of the above reviews you'll find remarks from a number of existing Android smartphone owners stating how "disappointed" they are in the Nexus S, often because it's too 'evolutionary' rather than 'revolutionary'. As someone who is brand new to Android, I understand but don't share this point of view. The Nexus S has some bleeding edge tech (i.e., NFC chip, integrated SIP calling). However, the Nexus S is not solely targeted at early adopters. Rather Google has focussed on small details to refine the Android experience for broad consumer adoption.

Auf Wiedersehen iPhone

At the time of the iPhone 4 launch I wrote an unexpectedly controversial article about my reasons for holding off on upgrading my 3GS. Well, my 3GS just went kaput (right outside the 12 month warranty, naturally) so it's time for a new phone.

In my June iPhone 4 launch writeup I only mentioned Android as a possible alternative. However, I've also been quietly keeping an eye on the new Microsoft mobile phone OS, blandly named Windows Phone 7.

I say 'quietly' because until recently anyone caught considering a Microsoft phone product would have received a heap of public (and deserved) ridicule. Microsoft's mobile phone effort is perhaps one of the more well publicized tech disasters. CEO Balmer's bonus was slashed by 50% due to the Kin debacle.

In my case, there were further reasons not to consider Microsoft. Chiefly, I have a Mac computer and don't plan on switching from Mac OS X anytime soon. Windows Phones at present won't sync with Macs. However, amid reports of the temperature cooling in Hell that's apparently about to change.

Still, with the iPhone generally considered the class-leading platform why would I consider switching to something else?

Apple's Innovation Slowdown

As noted in my June article, iPhone 4 failed to generate the same level of excitement as previous iPhones. I believe the main driver of this disappointment is that Apple is innovating at a slower clip than in years past. One of iPhone 4's big selling points was multitasking, which has been available on Android and Palm devices for quite awhile. And Steve Jobs' "one more thing" was video conferencing, a technology which has been around forever (by tech standards) and currently only works over WiFi.

The slowdown in innovation can be observed in other Apple products. Take the recent 13" MacBook Air refresh. Its uses the same Core2Duo chipset as the MacBook Air I purchased two years ago. The Air is billed as an "ultraportable" but there has been no material reduction in its 3 lbs. weight since it was first launched nearly three years ago. And it is still useless as a "laptop" as it continues to get too hot for comfortable use in your lap.

Overall, the pace of innovation appears to be slowing in Cupertino.

While the iPhone Has Lost its Hardware Edge...

The iPhone no longer possess the top-of-the line hardware kit.

Don't believe me? I encourage anyone to put an iPhone 4 with its highly touted "retina display" next to one of Samsung's Super AMOLED screens (e.g., Samsung Omnia 7). To use Steve Jobs' favorite term when describing displays, compared to the iPhone's the Super AMOLED screen is "gorgeous". Further, Super AMOLED crushes the iPhone's IPS tech in power consumption (30%), viewing angles and contrast.

We're also starting to see other hardware innovations leapfrog the iPhone 4's specs, such as faster processors, better WiFi, and other features which are already making the only four month old iPhone 4 look dated.

If hardware inferiority weren't a big enough challenge for Apple, the iPhone is also wrestling with poor design. The much ballyhooed death grip problem has been followed up with reports of increased glass screen damage. In all, it appears that the chorus of iPhone gripes is growing, not shrinking.

What makes these hardware and design shortcomings particularly problematic is Apple's product refresh cycle. Apple's pattern has been to release three versions under the same basic design, which means iPhone users are likely to be stuck with the same design until iPhone 7 (summer 2013).

...Apple's Software Advantage is Rapidly Eroding

Nokia mobile boss's characterization of using Android as being like “peeing in your pants for warmth” in winter is a bit much. However, the iPhone's strongest selling point over Android has been its software. Three strengths commonly highlighted are:

• User Interface
• Multi-touch (e.g., accuracy)
• App store

While Android has made big strides in catching up to Apple's App Store, the overall user experience is still inferior to the iPhone. The opposite is the case with Windows Phone 7.

I had a chance for the first time yesterday to test drive the Windows Phone 7 (on a Samsung Omnia 7). I have to say that the Windows Phone 7 UI rocks! And don't just take my word for it: influential Apple fanatic John Gruber of Daring Fireball agrees.

While Windows Phone marketplace lacks the sheer number of iPhone apps, this statistic is misleading. Microsoft's Phone already has many of the most popular apps (i.e., Twitter, Facebook, Netflix). Given Microsoft's resources I expect that, like Android, it will quickly close the app gap.

Last, has anyone else out there grown tired of the iPhone's cutesy candy icons, which have been copied ad nauseam? If so you'll find Microsoft's Phone UI, called Metro, a breath of fresh air. I'll be the first to confess that this an altogether superficial factor, but it's a factor.

Apple's Stock Price: Where to From Here?

Apple's stock price is bubblicious. The company has been on a tear for years now and the stock price has responded accordingly.

However, as evidenced by Samsung and Motorolla on the hardware side, and now Google and Microsoft on the software side, the competition has not only caught up but is leapfrogging a slowing Apple.

Further evidence on how times have changed: recent discussion of the upcoming 2011 launch of the first CDMA iPhone centered on how Apple needs Verizon a lot more than Verizon needs Apple. Prior to the original iPhone when Apple was seeking wireless carrier partners, Apple spurned Verizon. Apparently Verizon hesitated on Steve Jobs' request for carte blanche control over the iPhone's design and features, leading Apple to partner with AT&T (its second choice). With the iPhone's early blockbuster success Verizon was roundly criticized for its obstinance. But the proverbial Mountain would not to come to Mohammed, and now Steve Jobs and the iPhone need Verizon.

Apple investors may possibly see some modest stock price appreciation from here, but we're definitely in the late innings of the extraordinary run in AAPL.

Thoughts on iPhone 4 and Android

To be sure, we pretty much expected this year's iPhone announcement to be a yawner compared to prior years.

Much of the yawn is of course attributable to the highly publicized Apple employee party foul leak of an actual iPhone 4 prototype. That, combined with Apple's pre-announcement of some of the new OS features like multitasking, was always going to make it difficult for Jobs to deliver the same "wow!" factor as he has in the past. But to boot Steve's normally flawless presentation suffered from WiFi trouble. Liz Gannes of GigaOm, speaking on behalf of the many iPhone owners frustrated by AT&T's network issues called Job's WiFi trouble "poetic justice".

Yet iPhone 4 managed to make a splash with its appealing features. The new hardware (screen resolution, build quality) sounds rock solid. And I personally really like the emphasis on making the iPhone a better portable camera/video recorder. Extra battery life is always nice. The iPhone and Apple have a lot of momentum, and I expect iPhone 4 to sell well. And it will sell even better if it finally becomes available on Verizon.

But like other reviewers I was expecting at least a few more positive surprises from Apple with iOS than what we heard yesterday. Much of what Apple has done with the new OS is Android catchup (e.g., multitasking). And this might be the least exciting "one more thing" in Jobs keynote history: Face Time, the video calling feature. While video conferencing is new to the iPhone, it's a relatively old and familiar technology. And for now FaceTime only works on WiFi. Many times when I'm around WiFi I have my laptop and would prefer to use that for video conferencing because of the larger screen size.

One of the takeaways from iPhone 4 is that Apple may be struggling to make the same "insanely great" attention grabbing iPhone technological leaps as it has in the past. This doesn't bode well for Apple's product or stock price momentum, which is already in heady territory.

I would also add that some part of the iPhone's appeal as a status symbol has definitely been lost. This is in part due to the ubiquity of the iPhone, but also due to Apple's own iPad becoming the new must have gadget to show off.

Overall, iPhone 4 is a nice evolutionary update. But I don't plan on upgrading anytime soon from my iPhone 3GS. A big reason is I'd like to wait a little while to see what Android has in the pipeline. Android has rapidly closed the gap with Apple to the point where their respective OSs and hardware are close to parity, in my opinion. And the speed at which Android's software and hardware is advancing is impressive compared to Apple.

Apple Surpasses Microsoft, But Google Is Another Story

Now that Apple's (AAPL) market cap has surpassed Microsoft (MSFT), where next? The short answer (as far as Apple fanboys who cheered today's news are concerned) is "lookout Exxon, we're coming for you!"

The last time Apple had a higher market value than Microsoft was in December 1989. Apple shares are now worth more than 10 times what they were a decade ago. Given how ego-centric the Gates/Balmer vs. Jobs battle has been through the years, one can't help wonder if Apple's market cap ascendancy was the final trigger for Tuesday's senior management shakeup in Redmond.

Tech investors who have ridden Apple shares to the current valuation are naturally wondering whether Apple can sustain its incredible stock price momentum?

While Apple is certainly on a roll, the company faces several headwinds:

• Mounting antitrust risk - Ironically, today there was news of additionalantitrust scrutiny of Apple's business practices, this time related to iTunes. Microsoft stumbled after the U.S. government began its long and protracted antitrust case against the company and its Windows operating system monopoly. The iTunes inquiry is not nearly as central to Apple's business as Windows was to Microsoft's. But this is also not the first or even second time the federal regulators have more than poked around Apple's business practices.
• Apple vs. Google - In Q1 smartphones featuring Google's (GOOG) mobile operating system, Android, outsold the iPhone. An iPad competitorfeaturing the Android operating system was officially announced by Dell (DELL) on Tuesday. In the consumer space, I would definitely put my money on the fruit-logoed company when it comes to Apple vs. Microsoft or Apple vs. Dell. But Apple vs. Google is a different story. Google is able to attract superior software engineering talent. While talent comes and goes, the next Google advantage which I highlight below sticks around.
• Battle of the Big Brass Brands - At the risk of getting flamed by the Apple online fanboy gestapo, I believe Google's brand is more trusted than Apple's. And not entirely due to Google's "Don't be evil" ethos. Perhaps more important is the nature of Apple's and Google's respective business models. Apple has to charge consumers money for its products and periodically suffers criticism and backlash for gouging customers. In contrast, on the rare occasion where Google actually charges a customer anything is when it offers some ridiculously inexpensive bargain, such as Google's pricing for storage. Where they compete head-to-head, Apple charges $99/year for MobileMe while Google offers basically the same service for free. Apple's recent iPhoto upgrade (as part of iLife) cost customers $79, while Google doesn't charge for its Picasa upgrades. With the retail consumer that both companies are now directly competing head-on for Google is the undisputed "King of Free". That's going to be tough for Apple to compete with ultimately unless it can come up with something similar to Google's behind the scenes money-minting machine called AdSense and AdWords (which Apple is beginning to try and do with iAd.).
• In a lawsuit, only the lawyers win - Nokia (NOK) recently announced another lawsuit against Apple. Previously Apple announced that it was suing smartphone maker HTC for infringing 20 iPhone patents. There has been talk of Palm (PALM), recently acquired by deep pocketed HP (HPQ), of both suing Apple and/or being sued by Apple. It's unclear what the result of these legal battles will be, but they certainly pose at a minimum a distraction to Steve Jobs and Co., and in the case of the Nokia lawsuit, a threat to one of Apple's hottest new products.