00:00welcome to the a 16z podcast I am
00:02Michael Copeland and we are here with
00:04Benedict Davin's to talk about not
00:06surprisingly a mobile app will just
00:09announce massive record-breaking
00:10earnings what did you pull out of that
00:13report and how does we've discussed new
00:17questions in Mobile I want to get to
00:18that but how does this sort of further
00:20the evidence that we are entering into a
00:23new phase so what happened well Mobile's
00:29bigger than PCs lot bigger than B C's
00:31and Apple has basically sealed the top
00:37end of the market so there was a period
00:40two and three years ago where we might
00:42have been arguing well is android going
00:43to crush Apple at the high end just as
00:46we were arguing you know what's gonna
00:47happen with messaging and you know
00:49what's going to happen html5 vs. apps
00:51and all of those questions are kind of
00:53done now at least for the next couple of
00:55years until everything changes again
00:57again and so Apple sold
01:00getting on for 15% of all the phone sold
01:03on earth in the last quarter in the
01:05December quarter that was how many
01:07millions seventy five million five
01:08million and then Android probably sold
01:10the next 50% of all the phone sold on
01:12earth and the remainder is converting
01:15very very fast to and very very cheap
01:16Android right and so apples gonna have
01:19the top 15 percent 10 to 15% of all the
01:21mobile phone users on earth and Android
01:23will have most of the rest but in the
01:25USA that translates to Apple having half
01:27the users and in Japan more than half
01:29the users and in emerging developed
01:31markets probably a third but at least
01:33half of the value and so you have these
01:35two ecosystems where apples got the best
01:37the customers who spend most and
01:40androids got some of the customers you
01:42spend most and everybody else and those
01:44two ecosystems kind of exist in parallel
01:45and apples kind of got you know we're
01:49putting this apples kind of got back
01:52onto the front foot right and so and I
01:54want to ask you about that front foot
01:56because so the iPhone 5 wasn't as sort
02:00of massive as maybe other people saw
02:01iPhone 6 and 6 plus has just been
02:04tremendous but does that say something
02:07or what does it say not just about Apple
02:09and you know its design
02:11it's software but what does it say more
02:14broadly about how the phone is now kind
02:16of penetrating every part of our lives
02:17well we're going from a world weather of
02:20350 million pcs on us replaced every
02:22five years more or less to four billion
02:24phones on earth replaced every two years
02:26and those four billion trains are
02:27converting very fast to smartphones and
02:29so you have a fundamental change in
02:32scale in the computing industry because
02:34those phones are all computers right and
02:36there will contain chips that are much
02:38much faster than a Pentium back when
02:39Microsoft launched windows 95 and so
02:41that is a dominant computing platform
02:43and Apple kind of has the better part of
02:44it it doesn't know it has a smaller part
02:47but it has the best part and the kind of
02:50the interesting dynamic here is that
02:52Apple has basically unwound every
02:56assertion they've made over the last six
02:57or seven years as to what they wouldn't
02:59do so they said they wouldn't make a
03:01small tablet they said they wouldn't
03:02make a bigger phone they've made a
03:04bigger phone three times right and they
03:07said they wouldn't allow ask if you go
03:09back far enough and so they you know
03:12it's the sort of various people have
03:13said about Steve Jobs you know he could
03:15change his mind so fast you'd forgotten
03:17what he was saying before and he would
03:18have you absolutely convinced it you
03:19always been saying that and you can see
03:21Apple continuing that and you know the
03:23only two things that they haven't done
03:24is they haven't made a cheap phone
03:25that's like not a very cheap phone but
03:27you know they haven't made a $300 phone
03:29or $400 phone right and they haven't
03:30done a stylus and both of those are kind
03:33of interesting questions for the future
03:35because those are the sort of the
03:36remaining sort of gaps that other people
03:38are able to exploit that Apple has so
03:40far chosen not to go after I think the
03:43you know what has to be kind of slightly
03:45careful looking at the surge in growth
03:46in this quarter because part of that is
03:48about distribution in China and part of
03:50it is sort of one-off pent up demand for
03:52and particularly in East Asia but also
03:54just generally for a kind of larger
03:56screen phones right but you know it does
03:58seem pretty clear now that you know the
04:00you know the Android assault on the
04:03middle or the mainstream of the iPhone
04:05market just doesn't work that once you
04:07get above a certain price point Android
04:09does not compete well against iPhones
04:11and Apple so forward refused to go below
04:14a certain price point so you've got a
04:15certain equilibrium in in the market and
04:17so there we are kind of for the next
04:19year two years three years or something
04:23that changes everything well what could
04:25and that could be different aware so it
04:27could be one well I think this is the
04:29other thing that one of the things I
04:31keep saying is that you know mobile
04:33means that we're kind of pace Netscape
04:35and post PageRank because we had this
04:37model for 20 years of the web browser
04:38and a mouse and a keyboard and that was
04:39most people's Internet experience and
04:41you go onto a mobile device and clearly
04:43it's not about a web browser than a
04:44master keyboard but it also hasn't
04:46settled onto something new so you know
04:48right now we have apps and we have a
04:49like a four by three grid of like app
04:50icons and then you have people
04:52experimenting with deep linking you have
04:54Apple experimenting with you know local
04:56networking you have watch you have in
04:59particularly you have a lot of people
05:00looking at messaging as another layer
05:02another development environment with
05:04different discovery and sharing methods
05:06that sits on top of the existing
05:08platforms but most obviously we chat in
05:11line in East Asia seems quite likely the
05:13Facebook's going to try and do that what
05:15as well maybe the Google and Apple try
05:17do that maybe not but the point is you
05:19know we haven't arrived on a new settled
05:20model for how all of this stuff works
05:21and that means that you know the kind of
05:24the current sort of modality for Google
05:27is kind of up in the air cos you know
05:28how do you find things what does it mean
05:29to find things what is it gonna mean in
05:31five years time to say I installed an
05:32app on my android smartphone well what
05:34is install gonna mean what is app can
05:35mean what does that old enemy is it
05:37going to be claimed exactly and so
05:42everything is kind of still somewhat in
05:44flux it's kind of you know on the what
05:45you know it's kind of on the one hand on
05:46the other hand on the one hand the
05:47platforms over and Apple and Google won
05:48the platform was away for Apple Google
05:50won on the other hand nothing settle at
05:51all everything could still change right
05:52but it's kind of going to change within
05:54that framework of well people buy
05:56high-end phones and they've been by
05:57mid-range and low-end phones and apples
05:59got the high-end phones and there's not
06:01anybody on the horizon that's mounting
06:03incredible attack on that you know
06:04Samsung tried ran into a brick wall at a
06:07certain level of share only really
06:09succeeded because they were making big
06:10phones big screen phones which Apple is
06:12now doing and now Samsung's she always
06:13slipped back quite dramatically
06:16there's a bunch of Chinese people who
06:17are making very interesting
06:19well-designed phones but there are
06:20don'ts they don't have global
06:21distribution they don't have the ability
06:22to come to market in the US for the next
06:24couple of years and even if they did
06:25again you ask well how well would that
06:27do and you know Nokia's disappeared and
06:30decided Microsoft and we're you know I
06:32mean this is the other you know the way
06:33has changed apples sold more phones to
06:36Nokia I mean then they're not gay you
06:37know this until Microsoft because Nokia
06:39Nakia Microsoft did 10 million feature
06:41phone 10 million new Mia's and 40
06:43million feature phones right well did 75
06:45million smartphones Samsung hasn't told
06:47us how many fast smart phones they sell
06:48but it's not impossible that Apple sold
06:51three more smart phones than Samson
06:53which would make Apple a bigger
06:54smartphone vendor on earth and the
06:55second biggest handset vendor on earth
06:57is that Samsung sells feature phones too
06:58and you think about that for a minute a
07:00politicized is almost certainly the
07:02second biggest handset vendor on earth
07:04now it'll that will change that will
07:06taint a score because obviously there
07:07won't be the launch quarter anymore so
07:08it will smite down again right you know
07:10how's that for changing that kind of
07:11dynamic of the market and so do you
07:12think that this snapshot in this market
07:15you know and this kind of moment like
07:17you said Apple one well Apple and Google
07:21one okay and but this is the way it's
07:24going to stay for the foreseeable future
07:26and tell again like you say there's we
07:28move on to the next big phase of I think
07:31that's right and I think you can kind of
07:32come at this from two directions one is
07:34you know how can I put it this is sort
07:37of narrative in the tech industry that
07:38says well you know these things you know
07:41the good enough and half the pricing
07:43will always win it's very notable that
07:45in China apples had Apple sales more or
07:47less doubled in precisely the period
07:49that you have half a dozen Chinese
07:50manufacturers coming in to market with
07:52really good design and strong brand
07:53which show me is only the most obvious
07:55and what's happening is those guys are
07:56killing Samsung they're not touching
07:57Apple at all right and so you know it's
08:00very overused metaphor but you know when
08:02I hear people saying you know high-end
08:04does not last it gets killed by cheaper
08:05product I think you know yes what car do
08:07you drive right because you know you can
08:11go and buy a VW Jetta and that will be
08:13just fine so why would anybody at all by
08:15BMW or an Audi or a Lexus or Tesla
08:18surely those companies should have died
08:2030 years ago well actually no you know
08:23technology has kind of been the only
08:24product you know and how can I put it
08:26pcs were commodity and there was this
08:28tiny little bit of market at the top
08:30where you could sell high-end pcs where
08:31Apple just managed to eke out a survival
08:32everything else was a commodity there's
08:34a whole bunch of industries that are not
08:36commodity in that sense there is a
08:37commodity part and there is a premium
08:39mid-range part and there's a higher part
08:41and you know as something that says
08:42personal and that you carry around with
08:44you all the time as a phone
08:45I don't believe fundamentally that
08:46there's not going to be a market for a
08:48high-end product right and you know
08:50right now Apple is the only company
08:51that's positioned to sell that I wish of
08:53others you know Nokia for a brief period
08:55was doing that if you look at the
08:57Illumina devices if those Lumia devices
08:59have been running a different platform
09:00you know the hardware was lovely but and
09:02some of the HTC hardware was lovely but
09:04for a whole bunch of reasons that didn't
09:05work and right now Paul's kind of the
09:07only company in that space and when you
09:09look at things like touch ID when you
09:10look at Apple pay when you look at the
09:12things that they do with that
09:13integration you know it's very hard for
09:15commodity om using somebody else's
09:18operating system and somebody else's
09:19components to compete with that
09:20proposition now the interesting question
09:23on the side of this is well to what
09:24extent does that actually matter to
09:25Google because Google isn't in the
09:27hazard business right but they are on
09:29the payments but they are in the apps
09:30business they are and you know well
09:33exactly so then so then you ask the
09:35question well okay which bit of Google
09:36right that's clearly the guys who run
09:38Android would like there to be more
09:39Android sales under the Adsense team
09:41care they make more money from iOS
09:43devices so then you know what happens
09:45when the Adsense guy and the Android
09:47guys sit in a room with the maps guy and
09:49saying the Adsense guy says we'd like
09:51maps on iOS first please and the Android
09:53guys says are you out of your mind
09:56it's a bit like you know the dilemma
09:59Microsoft had putting office onto Mac
10:00except much more so I mean that's it's a
10:02bad example because Mac was so tiny but
10:04you know Google is making more money on
10:05iOS and Android right now
10:07right Facebook is for that matter - okay
10:08so then so then the question is well
10:10okay which part of which parts of Google
10:13feel what about what's going on here
10:15you know why does it matter how much
10:17does it matter to whom how strong
10:19Android is and then you know coming back
10:21to the Chinese guys as they start going
10:23to go outside of China some of them are
10:25quite interested in taking control of
10:26Android for their own purposes and so
10:28then you say okay I mean so this is kind
10:30of this interesting question for Google
10:31about the decline of Samsung because you
10:33know on the one hand it was worrying
10:35because Samsung had half of the android
10:37market by volume more or less and
10:38I was kind of concerning for Google that
10:40you had this big powerful partner but as
10:42Samsung starts to shrink any of these
10:44other guys come up it's actually harder
10:46for Google to stop those guys doing
10:47things because one of them could just
10:48say you know what where are you going to
10:50sell devices with our own platform and
10:52maybe we'll sell quite a lot of them and
10:53if Google says we can't also sell
10:55something running Google Play maybe that
10:57whereas Samson was not a kind of in a
10:59position to do that so it's like is this
11:01is the is the if presuming the trend
11:03continues if the decline of Samson
11:05happens is that good or bad for Google
11:07that's like kind of interesting and for
11:08which part of Google it's like it's but
11:10as I get again you know it's bad for the
11:11guy in Google whose job it is to make
11:13sure that Android isn't fragmented is it
11:14bad for sundar is it bad for Larry Page
11:16well kind of maybe right I want to ask
11:19you we've talked about this a little bit
11:21before but so so for companies like
11:22Facebook and Amazon who are not just
11:24sticking their toes in but like their
11:26entire legs into the mobile side of
11:28things what does this does this turn up
11:31the heat on them to really get moving
11:35faster and and really call I think
11:37platform and a plan I think Facebook and
11:39Amazon have a lot of the same issues
11:41that Google has and a lot of the same
11:43issues that prompted Google to want to
11:46do Android in the first place that is to
11:48say the web browser was basically a
11:50neutral platform for a website and it
11:52didn't really matter what website web
11:54browser people using I mean it was a
11:55period in the late 90s when Microsoft
11:56hoped that it would matter but it
11:57doesn't really matter right and so you
11:59know Facebook and Emerson never really
12:00thought that they had to make their own
12:01web browser whereas you go mobile and
12:04suddenly you've got the operating system
12:06is not this neutral transparent layer
12:07it's got all this stuff happening that
12:09determines how you share things and how
12:11you talk to your friends and how you
12:12engage with people and particularly for
12:14Facebook the smartphone itself is a
12:15social platform which is why you have
12:17dozens and dozens of apps bubbling up
12:18you know it's why snapchat can just
12:21appear out of nowhere and great to be
12:22this big business or Yik yak or secret
12:24or line or all these other things can
12:25just kind of come out of nowhere which
12:27would have been impossible on the
12:28desktop nobody would have used ten
12:29different social networks on their web
12:30browser or mobile it's pretty easy
12:32Amazon has kind of you know similar but
12:34you know related issues and so they kind
12:37of look at this homescreen and think how
12:40could we move down the stack from being
12:41just one icon on the home screen to
12:44having a greater involvement with how
12:47say that was why Facebook came came
12:50along it's why the Kindle Fire phone
12:52exists and neither of those would have
12:54liked approach in a funny sort of sense
12:57it's like you can be too far up the
12:59stack to do this just as you can be too
13:00far down the stack to do this so just as
13:02it doesn't really make sense for a
13:03mobile operator or a handset maker to
13:05try and build a social network it
13:07doesn't necessarily make sense for a
13:09social network to try and build phone
13:11because that's not really where the
13:12network if that's it and they don't
13:14really have the right kind of position
13:15in the value chain to do that but that
13:17doesn't mean that Facebook and an
13:19amazonian gonna give up because you know
13:21there existed a fundamental existential
13:22question well how do you find stuff and
13:25how do you give to us chased off your
13:26friends everywhere does that happen
13:27within the operating system and how does
13:30that affect a social network or an
13:31e-commerce business and again it's got
13:33to have their fingers there even if they
13:34didn't quite know what they might do and
13:36and if that platform isn't theirs to
13:38control in the way that they would like
13:40to you you need to exert control it's
13:43well you need to you need to have
13:45engineers and you need to be poking
13:47around trying to think of something
13:49interesting to do quite what these were
13:52all the more difficult I mean obviously
13:53you know Amazon has this issue outside
13:55Google has this issue on iOS because you
13:57know there's 750 maybe just a hundred
14:01million active iOS devices out there and
14:03there's only 100 million we know now or
14:05was leaked recently there's only a
14:07hundred million active uses of Google
14:09Maps on iOS yeah says maybe four I mean
14:11that's kind of the wrong number there's
14:12probably 400 million iPhones in use a
14:14bit over 400 million iPhones on use and
14:16your quarter of those have installed
14:17Google Maps and that is the thing that
14:18if you ask anyone in the valley they
14:20would say absolutely essential no way
14:21everybody will have Google Maps no no no
14:23no no three quarters of people copyboard
14:24so either don't use maps and I you
14:26suspect quite a lot of people actually
14:27don't use maps at all at all or use them
14:29very well I find that Chuck you know
14:30there's people who tine outs and people
14:32who don't yes people there's people who
14:34you know live in one place and work in
14:36another place and know where the story's
14:37right and I didn't go to any bar of the
14:40week and er you know as people you don't
14:41really use math we often and but this is
14:43kind of the point that Google has got
14:44search on all these devices but it
14:46doesn't necessarily have anything else
14:47on those devices and so they've got a
14:49kind of a similar problem to Facebook
14:51and Amazon which is yes we've got our
14:52one icon on the home screen in Google's
14:55case that one icon might actually just
14:56be Safari right we've got all what icon
14:58on the home screen but then there's all
15:00people could find stuff that used to be
15:02our business and so how do we kind of
15:04expand and understand more and capture
15:06more of that let's shift gears a little
15:09bit and talk about tablets that was one
15:11area where the Apple did not show mass
15:13yeah it's kind of a mirror image so for
15:15the iPhone the numbers record unit sales
15:18also record high ASP of quick juice of
15:20course because people are buying iPhones
15:22with more memory because Apple change
15:23your configuration and also of course
15:24because they're buying the iPhone 6 plus
15:25which is more expensive for the I pad
15:28numbers and sales that was not a record
15:30low but sales have been trending flat to
15:32down for the last 18 months to two years
15:34and it's a record low ASP record low
15:36average selling price and it's
15:38interesting there's a bunch of stuff
15:39going on here one thing it isn't is
15:41compare competition from equivalent
15:42Android tablets because they're not set
15:44because there are none yeah it's more to
15:46the point that they're not selling those
15:47aren't selling worth a damn either where
15:49are selling are seventy five hundred
15:51hundred twenty-five dollar generic black
15:53plastic tablets those really aren't the
15:55they're TVs all the games devices their
15:57screens or their screens they're not
15:59really post PC computing devices of a
16:01kind that anyone at people or Apple
16:02would kind of think about they'd like
16:04the tablet to be and they are you know
16:06she'll either one Android yes but you
16:08know half of them never go online they
16:09just watch video sort of plugged in via
16:10SD cards or something so there's like
16:11that's just like an interesting thing
16:13but it's not the same thing I think
16:14there's several issues with generically
16:17with the tablet as a post PC device I
16:19think one of them is the input methods I
16:23think one of them is that most people
16:27who use a computer all the time still
16:29use the keyboard and mouse a lot and
16:31still have apps that need a keyboard and
16:32a mouse and we've discussed various
16:35times over time that will probably
16:36change there's an awful lot of people
16:38whose job it who make a PowerPoint every
16:40fortnight I need a mouse and a keyboard
16:41but their job doesn't actually
16:42revolve around PowerPoint and they
16:44should be using a sass dashboard or
16:45something right and so there's there's
16:47kind of a time and a nap issue I think
16:49to me the more interesting point is that
16:52we tend to think about tablets and
16:54smartphones as a category our meta
16:56category and then PCs laptops and
16:58desktops as another category but if you
17:00come at it from a kind of consumer point
17:01of view you've got a screen that you
17:02take with you everywhere that's your
17:04phone that goes in your pocket and that
17:06might be a phablet of course which is
17:08right right and then you may or may not
17:10also have a big screen you may not you
17:14know and the iPad came out
17:15a bunch of people said we were always
17:16gonna need a bigger screen actually that
17:17was so completely wrong because not only
17:18were always going to need a bigger
17:20screen they didn't need a big screen at
17:21all people lot of people just have a
17:22smartphone right but if you do have a
17:24bigger screen the odds are you probably
17:25already got a PC and so then the
17:29question is well do I need to replace it
17:30and if you're going to replace it then
17:32yes it's do I need a desktop or laptop
17:34or tablet and the answer may well be
17:35well actually a tablet is pretty good
17:37for what I want to do but you first
17:38you've got to think well I bought a PC
17:39four years ago I turn it on every
17:41fortnight because I'm using my
17:43smartphone all the time do I actually
17:44need this well do I need to buy a new
17:46one well maybe and then when you look at
17:50actual sales of iPads what is very clear
17:52is that there's a very low replacement
17:53cycle so it's and so and so on the one
17:56hand you know that the number of people
17:57who want one is kind of constrained by
17:59the fact that you've got to be replacing
18:01your bu but may or may you may well just
18:02be you this are you replacing your PC
18:04question which is kind of hypothesize
18:06the other issue I think is that when
18:09you've got it you don't need a new one
18:11right and this is quite different from
18:13smartphones I mean there's kind of an
18:14s-curve well nobody explained to me how
18:16that is different because why we don't
18:19need to replace our smart phones every
18:21two years or everything like right so it
18:25is different so I think so there's a
18:26couple of things going on here one of
18:27them is that a lot of high-end
18:28smartphones which allowed us to say
18:30iPhones or on a contract and the
18:31contract tends to be a two-year contract
18:33so you get given a big subsidy to buy a
18:34new one or big whatever you want to call
18:36it a big you have a big incentive to buy
18:38a new one every two years
18:39second smartphones get taken out of the
18:41house they get dropped yeah they get
18:44scuffed they get bashed around they get
18:46scratched the third thing is I think
18:49there is kind of a curve on improvement
18:52of product any technology product and
18:54you know the difference between a new
18:56car and a tenure a car that you might
18:58have bought ten years ago is almost
18:59imperceptible today except they might
19:01have a screen now and wouldn't have had
19:02to screen ten years ago but otherwise
19:03you really wouldn't be able to tell the
19:04difference right the difference between
19:06a new PC and now and a PC that you
19:08bought two years ago again you are not
19:10going to be able to tell any different
19:11store five years maybe and so the PC
19:15replacement cycle is now five years if
19:17you gave about twenty years ago the
19:18difference between a new PC and one you
19:20bought two years ago was enormous and so
19:22you had much more of an incentive to
19:23upgrade today there's not that much
19:24incentive to upgrade your PC because you
19:27then if there's a few like water step
19:29things like retina to squirt display or
19:32SSD or something but basically you can
19:33tell and then you have a smartphone and
19:36again you know the difference between
19:37not iPhone and iPhone was huge
19:39difference between iPhone and iPhone 3G
19:41was pretty big difference between iPhone
19:435 and 5s is quite a lot smaller except
19:46that you got the fingerprint scanner
19:49Apple obviously does this by annual
19:51cycle see but every two years as a big
19:53step right and of course if you bought
19:56the iPhone 4s then the 5s it looks like
19:58a big upgrade to UE but if you have a 5
20:00then it doesn't look like a big upgrade
20:01so you've got kind of bad think about
20:03that because everyone's on two-year
20:03cycles and apples on a one-year cycle
20:05anyway my point is the curve is slowly
20:07flattening out for smartphones and it's
20:09not just a Liam difference between the
20:10Samsung Galaxy s5 or the Samsung Galaxy
20:12s4 is not as big as a difference between
20:14the one and the two and so you do start
20:17to have that effect but then you still
20:19have the durability in the dropping in
20:21the scuffing contract so you still tend
20:23to upgrade these things whether it's
20:24every one year or every two years every
20:26three years you have which seems to be
20:27about two years in the business and and
20:29tablets just kind of to finish the point
20:32yeah yeah there's awful lot of people
20:34who look an iPad look at an iPad air 2
20:35and an iPad 2 and go there's not much
20:39difference right am I going to spend
20:40another 500 bucks right now this one is
20:42perfectly good even though they're on a
20:45similar sort of upgrade cycle well they
20:46are but I think the perceived
20:48improvement is relative is is is is
20:51smaller you know the weight mattered if
20:53you're J if you're leaving it at home
20:54and using it to watch TV in bed the
20:56weight doesn't really make any
20:57difference if you're over a certain age
20:59of retina panel doesn't make much
21:00difference if you're just watching you
21:02know if you're doing high-end games and
21:05y'know real doing all the cool post-pc
21:07apps then the faster processor matters
21:09but if you're not then it doesn't and
21:10there it might a lot of these things got
21:12given got bought by you know older
21:14people who wanted to have it is it
21:15because it was easier than a computer
21:17right so they're not necessarily using
21:18all those really sophisticated out so it
21:20really stretches your processor so I
21:22think there's a bunch of people who are
21:23holding on to a three-year-old iPad or
21:24to your iPad or for your iPad and go
21:26well yeah I mean if I drop it then I'll
21:28buy a new one but it seems like is that
21:30also a perceived utility or a perceived
21:33pleasure problem I mean that like
21:36it's not doing a tablet's not doing
21:38everything that I had hoped and like
21:40changing my life in the way that I had
21:41well I don't think well but you know how
21:43do you quantify that the user
21:45satisfaction numbers for iPad is also
21:47scale right the iPads share of tablet
21:49use is 80 to 90 percent on any kind of
21:52all to the extent that anybody who has
21:54metrics for iPad use sounds to say
21:56ecommerce sites or web sites or you know
21:58anybody who's doing video or anyone
21:59who's actually selling anything sees the
22:01iPad as 80 or 90 percent of their or 70
22:0480 90 percent of their tablet use yeah
22:06so as I said earlier it's not that
22:07everyone is using Android tablets
22:09instead right um and you do see tablets
22:12taking quite a large share of usage in
22:14fact you know 10 20 30 % or for some
22:16people but it's more I think well I've
22:20got one I don't need to buy another one
22:21right I'm not getting a subsidy I'm not
22:24the operator isn't giving me money to
22:25get a new one right and you know we're
22:27all said and done you know the weight
22:28doesn't matter the screen size you know
22:30the the improvements are harder to
22:31perceive if you're not kind of you know
22:33or kind of an early adopter and so hence
22:35you know Tim Cook said you know 50 to
22:3770% of iPad buyers today are still
22:38people didn't know one before because
22:41the people you've got them don't buy any
22:42ones yeah historic footnote the iPod yes
22:46what have we learn about that well Apple
22:49stopped reporting it which they said
22:50they were going to do last year last
22:51quarter um so it's no change the
22:53reporting basis so it's no they're no
22:55longer breaking out unique sales of
22:56iPods all revenue from iPods I feel a
22:58bit sad about that I was so exciting
23:00when the iPad well every time I post a
23:01chart people tell me it's a stegosaurus
23:03chart because this is basically it's
23:04this curve with a spike every Christmas
23:07and the but you know they sold what was
23:10it 400 million awesome and they did
23:12something like 65 billion dollars of
23:14revenue is something you know it's not
23:16quite clear because you have to think
23:17about they included and iTunes revenue
23:19in there for some period of time so you
23:20kind of have to work that out but it's
23:22you know they sell an awful lot of these
23:23things apparently the utilise someone
23:25said to me lifetime sales so the Sony
23:27Walkman were about two hundred and fifty
23:28million units so they sold you know
23:30almost double yeah the what was sony
23:32walkman but clearly it got killed by the
23:33epic you killed by the small fame yeah
23:35killed by at least they killed
23:36themselves as well exactly yeah they did
23:37it themselves before anybody else came
23:39along so what what what now do we look
23:41at on the horizon what what signals are
23:44you going to be paying close attention
23:47moving forward in the next six months or
23:48so the big things that are going to
23:50happen of course are WWC and IO which is
23:53where Apple and Google set what it is
23:56that they're going to do with their
23:57platform in the operating system over
23:58the next year and you know both of those
24:01are very interesting you know and and
24:03it's you know that's kind of the center
24:05of gravity for the mobile industry at
24:06the moment because they set so many of
24:08the terms for what's going to happen I
24:10mean each other of my point about the
24:11web browser you know no one sat eagerly
24:13awaiting what was going to be in the
24:14next version of Internet Explorer to
24:16find out what it would be possible for
24:17web developers to do right that kind of
24:19happened somewhere you know that was not
24:20where the focus of innovation wasn't yet
24:22you can criticize Microsoft for you know
24:23stagnant animation but you know I'd only
24:25anybody's really looking at Chrome
24:26either I'm going oh my god have you seen
24:28what you can do in the evasion of Chrome
24:29right yeah you get the whole thing about
24:30web web RTC and age and you notice I'm
24:33being a bit facetious but you kind of
24:34know what I mean this was not the lit
24:36this is not the thing that fundamentally
24:38changes what kind of stuff you can do
24:39for people to interact with your
24:40properties right whereas the mobile
24:43operating system is and so you know
24:45there's big questions about what's gonna
24:46happen you know what is Apple going to
24:48do you know will will this be apples
24:51maintenance release or they do kind of
24:52new fundamental things to what it's
24:54possible for developer to do the way
24:55they did in iOS 8 for example with
24:57extensions and you know all sorts of
24:59kind of new new and interesting stuff
25:01what it was going to take Android you
25:04know where does Google how does Google
25:07continue to try and blow the difference
25:08between what a website is and what an
25:09app is you know how do they try and
25:11drive forward the consumer experience
25:12there how do they try and change search
25:14and discovery does google try and build
25:15a messaging solution does Apple try and
25:17build you know what does that we'll do
25:18with iMessage is Apple is Apple looking
25:20at WeChat and thinking that's
25:22interesting let me quickly ask you about
25:24payments did we see anything with Apple
25:26pay and did we get any evidence of sort
25:29of it making inroads one way or the
25:31other well we've got numbers but it's
25:32kind of hard to know what they mean
25:33because you know yes Apple pay is X Y
25:35Zed percentage of contactless card
25:36payments that they say well okay fine
25:39write to me I've always thought Apple
25:42pay was more interesting in apps in a
25:44point of sale because you go into a
25:46store you pull something out of your
25:47pocket you put it on a thing and you do
25:49a thing and whether it's a phone or card
25:52and this is of whatever people have been
25:54saying for five years like why is NFC
25:55payment a good idea and you do it with
25:57your iPhone and yeah it is like
25:59a little bit better maybe that it's not
26:01like this transformative wow that's so
26:03much better the way it was when we went
26:05from you know those kind of mechanical
26:07credit card slips things we had to kind
26:09of clunk click and blow that was a big
26:12change you know games from swiping a
26:14card to holding a patent iPhone on a
26:15terminal it's not really but then when
26:19you go to apps all of a sudden instead
26:21of you entering your credit card and
26:22your address and your name and the
26:24authorization and into the app you just
26:27say pay with Apple pay and you put your
26:28finger on the home button and it's done
26:29right and that really is interesting and
26:31what we didn't see you over the holiday
26:33for example just this tidal wave of you
26:35know Apple pay payments we didn't know I
26:38mean you know you have to remember that
26:40this is a replacement cycle issue so you
26:41know it takes time for everybody I have
26:43an apple an iPhone 6 and iPhone 6 plus
26:44so you know 75 million of them or
26:48something well no they didn't 75 million
26:51because they sold a bunch of the old
26:53models as well so they sold some number
26:54less than that yeah and there's a little
26:56ones you know so you know they make the
26:59most that they did was you know replace
27:00a fifth of the base or six of the base
27:02or something and exists in the USA so
27:08the Apple pay and China does exist yet
27:09so all the other things in China don't
27:10mean anything for this purpose so it'll
27:12take time but I just am I kind of my
27:14point then you sit in the saying okay
27:16water building you know if you look at
27:17so why back if you look at how Apple pay
27:21happened you had these building blocks
27:23there first so they had the fingerprint
27:25scanner first and it was there and it
27:27was doing something useful and they had
27:28passbook there first and it was there
27:30and it was doing something useful and
27:32they had the secure element not the same
27:33secure element but they kind of shown
27:35the ability to do a secure element
27:36already and then they kind of light it
27:39up and say oh all these things that
27:41we've already built and been showing to
27:43you they also do this other completely
27:44different thing and so it begs a
27:46question okay what else is Apple going
27:47to do with this stuff mm-hmm
27:49you know what else are they going to do
27:50with the fact that they now have an
27:51identity platform right right well we
27:54will be talking about all of that
27:56I'm sure sooner rather than later
27:58benedict thank you as always thank you
