Concepts, shipping, and secrecy

At Vox, Matt Yglesisas posits that Apple is losing the innovation race to Google: Google wants to reinvent transportation, Apple wants to sell you fancy headphones

There were two striking pieces of business news this week from America’s leading technology brands. On the one hand, Google unveiled a prototype of an autonomous car that, if it can be made to work at scale, promises to end mass automobile ownership while drastically reducing car wreck fatalities and auto-related pollution. Meanwhile, Apple bought a company that makes high-end headphones.…

But that’s exactly why it’s so disappointing to see Apple focused overwhelmingly on small-ball extensions of its existing franchise while Google goes for big plays.

Yglesias posits that one of the reasons that Google can make this big plays and Apple is playing small ball is because Google’s complete control by Brin and Page  (or their lack of lack of accountability to shareholders) allows them the freedom to experiment with big ideas. Apple is beholden to activist traditional shareholders who want the company to release its huge cash reserves to shareholders. 

However, there is no way to actually know if Apple is in fact working on big ideas or just making iPhones in new colors. Apple doesn’t announce new product concepts or share their work in development. Apple creates products, Apple announces products, and Apple ships products. Since Jobs returned to Apple after the NeXT acquisition, it focused on creating and shipping products. See e.g. John Gruber  in 2011 The Type of Companies That Publish Future Concept Videos and Kontra in 2008 Why Apple doesn’t do “Concept Products”. I’m sure that Apple is irking on all kinds of product variations and new product ideas in house. But without signing Apple’s restrictive NDA, we’re not going to know about those new ideas. 

Apple has a culture of obsessive secrecy and Apple employees do not leak information. Last year, at the D10 conference, Tim Cook announced Apple’s plans to “double down on secrecy.” By all indications, this has been successful.  

Tomorrow, Tim Cook and Apple’s senior executives will step on stage at WWDC, their annual developer conference, to announce OS X 10.10, iOS 8, likely introduce Jimmy Iovine and the Beats team. But aside from a “flatter design” or Healthbook app, we have no leaks on what Apple plans to introduce. This could be because either Apple is not coming up with any major innovations, or because Apple doesn’t leak them. The Apple rumors community hasn’t seen screenshots from either operating system. Apple watching is like Kremlinology. Apple doesn’t announce what their plans will be, but analysts have to infer those plans from third party sources of information. This is mostly through the supply chain and potential partners. Under Jobs, Apple was not afraid to be vindictive if partners leaked details about Apple products before Apple announced them. 

The majority of releases about Apple hardware come from sources within its manufacturing partners in Asia, whose employees and contractors are not as strongly incented to protect Apple’s proprietary and confidential information as Apple’s own employees. (This is unfortunately, why I am not optimistic about a new Retina Thunderbolt display or Retina iMac release tomorrow. I really do want a full-sized Retina monitor, but more importantly, a 12” or 13” laptop that can drive a 4K panel.)

From the roundup of rumors reported by Macrumors likely to be announced at WWDC tomorrow, all involve the types of applications and APIs that will rely on integration with third party hardware and/or software: Healthbook (integrating with fitness tracking), song identification (partnering with Shazam), mobile payments (partnering with retailers), smart home integration (partnering with hardware and software). Where rumors seem unlikely (major new hardware announcements) it’s because of the lack of smoke from the hardware supply chain.  Apple’s own innovations do not leak. 

This doesn’t preclude Apple announcing a wholly new product type that is not yet ramped for production. But if Apple only announces products, why would it announce something that it’s not ready to ship? Because, regulatory approval.

The single biggest product announcement that Steve Jobs made was the 2007 introduction of the original iPhone at Macworld. (Back when Apple presented a keynote at Macworld.) Part of what made the keynote so surprising was the audacity of the product. Apple watchers had been expecting an iPhone for a number of years, expected to be some kind of hybrid iPod and mobile phone, maybe with a click wheel or hardware keyboard. Most people were floored by the device, which Jobs announced as three things: a “widescreen iPod with touch controls,” “a revolution mobile phone,” and a “breakthrough internet communications device,” which, by the way, were not three different devices, but just one. 

Even though Apple announced the iPhone in January 2007, the first iPhones didn’t ship until June 27. Apple’s hand was forced to announce before release because the FCC requires manufacturers of wireless devices to obtain regulatory approval of devices that will transmit over the public airwaves. If Apple submitted the iPhone for approval before announcing it, rumors sites and the tech press would have uncovered all of the product details before Apple itself announced. If nothing else, Apple wants to control its message. New categories that require regulatory approval won’t be ramped for production and so we won’t see leaks.

But regulatory approval is also the reason that we are hearing so much about Google’s self-driving cars and Amazon’s drones. These are not only products that would require regulatory approval, but that would require significant changes to rules or legislation in order to be legal to use or sell. Any commercial aircraft, including autonomous aircraft, requires FAA approval. NHTSA is evaluating guidance and regulations on self-driving cars. In addition, each state will have different regulations governing the use of roads and driving standards, multiplying the lobbying burden for obtaining regulatory approval. 

Between attempting to catalogue all the world’s knowledge, create self-driving cars, and by acquiring Boston Dynamics, the creator of various military robots, do we as a society need to worry that Google is building Skynet

Andrew Raff @andrewraff