Tag: revenue

On Episode 28 of The Edge of Innovation, we’re talking about Apple the Iphone 7 taking out their headphone jack.

Introduction

Jacob: Welcome to The Edge of Innovation. My name is Jacob. I had the privilege of hosting Paul, and we are going to be talking about the iPhone 7 today, not just the iPhone 7 but specifically the lack of a headphone jack on it.

Paul: Wait a minute. You’ll telling me that took the headphone jack out?

Jacob: 3.5. Straight off.

Paul: Wow.

Jacob: This has been—

Paul: But I’ve heard you could drill a hole into them and it’s behind there.

Jacob: I was going to bring it up. That’s one of my favorite parts about this whole story. They…there’s like a guy loaded up a YouTube video, putting his iPhone 7 in a vice, and then all through the YouTube said, “This will not work.” And then thousands of people still did it.

Paul: Well, we don’t know about the thousands. Yeah. But at least there was more than one.

Jacob: There was at least a few.

Paul: More than zero.

Jacob: Yeah. More than zero. I would like to think of it as a thousand.

Paul: Do you think they need to turn in their humanity cards or what?

Jacob: I think it calls into question the quality of our our public education. I just… I can’t imagine.

Paul: What were you thinking is the question, really. What were you thinking?

Jacob: It’s a, it’s a hidden feature that you…

Paul: So Apple took it. Actually, they built it in. They just covered it up.

Jacob: Right. Right.

Paul: Interesting.

Jacob: So the whole—

Paul: That would have been really stupid of Apple to do that.

Jacob: Yeah. So I haven’t actually… So I have an iPhone 6, and I’ve actually refused to go to the iPhone 7.

Paul: Because of this issue.

Jacob: Because of this issue. I could easily do it with the way my plan is set up. But yeah…

Paul: So there’s no financial penalty or disincentive financially.

Jacob: No. We’re through Sprint and, if you lease your phone know, and so it’s just, whatever, $5 and month, and you just go get the new phone. But so, I wanted to bring it up as a topic to talk about because there’s a lot of issues in it.

Paul: Well, I don’t really think it’s that big a deal. I mean, my toaster doesn’t have a headphone jack and neither does my microwave, so I’m really not sure. But, you know, I don’t carry those with me, you know. So that’s a good point. That’s a good point.

Jacob: We’ve previously not been used to using your headphone jack on your previous toaster.

Paul: No. No, all the toasters I’ve had to date have not had headphone jacks. They’re all Bluetooth headphones. Yeah, it is interesting. You know, it’s a, as Apple spun it, which I think was a mistake…

Jacob: I think they said it was brave and courageous.

Paul: Brave. Courageous. Courageous, you know, and, you know, I don’t know. People in the floods recently had firefighters rescue them. I think that’s courageous.

Jacob: Strikes me as courageous.

Paul: Yeah, you know, I don’t think changing, you know, making a decision, a difficult decision, to remove the headphone jack… You know, it would be… It’s, it’s a pretty big space, relative to the amount of space that the headphones and the, uh, the wires that go to it and all that, it’s a pretty big space in the, in the microcosm inside of an iPhone. So I can understand that that space was there.

Jacob: It was valuable real estate.

Paul: Valuable real estate. That’s a great way to put it. But you know, they didn’t take it out of the iPad. You know, so I think it’s a little disingenuous to say, “We’re taking it out because we think people should use wireless.” You know, it’s wireless or nothing.

Jacob: Yeah, well, and you know, some of the story was, “This is a hundred-year-old technology. We’re finally coming up to—”

Paul: Yeah, so it light. I mean, you know… You know… As I was saying, you know, I think the iPhone 8 is going to do away with the screen, and the earphone, you know, microphone, and everything. It’s going to be, basically, an ethereal… You know, you’re going to open the box. You won’t be able to see, taste, touch, or use it, but it’s an iPhone 8.

Jacob: But it’s interesting. So the whole category, though, of taking away the headphone jack, it has some… As I was looking into this, and I’ve been watching articles, it has some collateral damage. I don’t even know… Either they intentionally and spitefully did this, or they didn’t think about it, and there’s kind of the collateral damage. So one of them is, for example, like there’s a device called the Square that plugs into the headphone jack.

Paul: The was immediately my thought, is the peripheral devices that depend on the headphone jack, what are they going to do?

Jacob: What? They’re going to go into the adapter for the thunderport? So, there’s that, but then also, because now that the headphones are basically, linked, you know. So they have the wireless headphones, somebody… There’s been some major concerns about how that affects music in terms of, because now you have a device that has to be authenticated and synced to your phone, and there could be a way for Apple to say, “Well, if you haven’t bought your music through us…”

Paul: Oh, sure. Absolutely. They could downgrade the quality and do all sorts of—

Jacob: Or not even allow you to sync it. So it’s…

Paul: Well… Yeah. That would be interesting. So you can’t listen to this non-properly purchased music of these headphones because we have control of the wire. That’s an interesting comment. The, the interesting thing I heard is that, the quality is better. Well, the quality isn’t necessarily better. A wire is pretty darn good for quality. There’s a lot of debates in audio file circles, about the quality of cables. And there’s people who charge enormous amounts of money for cables. It’s a very mythical thing.

But there’s this well-known test for, double-blind test with audio files, So they did the A/B testing. They did these interconnects that were very expensive. I mean, ridiculously expensive. That was A, and then they switched it over to B. And the people, very critical people, very, you know, very astute listeners, couldn’t tell the difference.

You should ask the question now, well what were the connections used for B. Well, they were coat hangers twisted together.

Jacob: No kidding.

Paul: And if you understand the physics of, metal wires, you know, electrons, you know, yeah. There’s a little bit of difference here, but it’s not extreme.

Jacob: It’s… I had somebody once try to tell me, like, this cable for your guitar will transmit the signal faster than the other one. I was like, the physics don’t change.

Paul: Yeah. It’s really hard to slow down electricity or speed it up. And so, you know, there were some people who were saying listening to it through the headphone— or the thunderbolt port, was better quality, so much better quality. I’m not sure that that’s the case. There’s an A-to-D converter, analog-to-digital converter or digital-to-analog converter that does the headphones. They still have to have a digital-to-analog converter to get it into the thunderbolt port or out the thunderbolt part. So the same translations are occurring.

Now I will say, you know, you go and buy good headphones, and they’re going to sound better than cheap headphones. So I’m not, I’m not saying that that’s wrong. But the here… You know, here it is, you know. For… You had sort of hinted, you know, why did they do this. I don’t know. I mean, they, they… I think Apple does have, as part of its psyche, that they need to be ones who push the edge and challenge the, the status quo.

Jacob: And that was my question. Is this the floppy disk innovation of the phone, you know? The mobile phone, you know, dropping the floppy disk from being in the desktop suite was a huge deal.

Paul: Yeah, but the reason it was dropped is because it wasn’t needed. You know, you had USB sticks. So the evolution, you know, when you had 360k floppy, one of them — that was all you had — then you went to 1.2-megabyte floppy. Then you went to the 1.44-megabyte floppy. When you had to super drive, which was 2.88, and then memory sticks came on. So it’s like, “Well, why would I need a floppy?”

And they kept having them for years after that. And then it was, “Well, I just never use the floppy,” and, you know, stores didn’t even stock floppies. So we took the device out. So there wasn’t a need for it, but you know, people still do listen to music on their phones. And, so there… You know, it’s sort of like, you know, we’re going to do the hard thing here of removing that. But why wouldn’t they do that on the iPad?

Rumors are coming out that next week, they’re going to, uh, come out with a new MacBook Pro. And one of the commentators or reviewers said, “I think it will still have a headphone jack.” So, you know, if you’re saying this is an intellectual exercise that we shouldn’t have headphone jacks, because too many headphones are killed in the wild. Like turtlenecks. I mean, how many turtles are killed to make those turtleneck sweaters? And you’ve got to draw the line, you know.

So the little headphones that are out in the wild, they want to stop harvesting them. And we’re going to rescue the headphone. Well, no. That’s not really the case. So It’s a pretty bold thing. I’ll betcha one of the things that drove it is it’s a heck of a lot cheaper to make that, because that’s an expensive piece of equipment.

Jacob: Yeah. Well, and that’s certainly part of the equation. I mean, do you think that this is a sort of thing where they are going to be on the front edge of this new, of a new wave of mobile device technology? Like, all, you know, Androids, iPhones, across the map now are not going to have headphone jacks? And are they being disruptive? Or, you know, how does that kind of play out into the field of this decision?

Paul: You know, I don’t know. It’s hard to say. I don’t think a lot of people are going to follow it. It just seems silly. It’s such an entrenched technology, and all of the devices, the iPhone 6 can work with wireless headphones. So it’s not an improvement. It’s taking something away that I’ve come to expect and especially if I’ve invested in expensive headphones. You know, alright, yeah, I can get an adapter and plug it in…

Jacob: But yeah. So you’re saying that this seems like another instance of Apple feeling like they have to be “The innovators.”

Paul: I think so. I think that they have, you know. They have been the innovators, “the” innovators. And I think they need to do things that are innovative and the problem is, is that this product lifecycle, there’s not a lot of innovation left, you know. And, uh, you know, there’s this whole concept that we as consumers are addicted to innovation. Uh, we expect it. We expect things to get quantum levels better.

But you know, you go and you… You know, I’ll offend some people here, drink a glass of milk, they aren’t improving milk much these days, you know. It’s pretty much leveled off, you know. And you know, we had TVs that were made out of big bulky glass. Now we’ve got flat-screen TVs. You know, now we’ve got HD. Now we’ve got Ultra-HD, and you know, there’s that constant drive for better. Most people who sit in front of an old TV and a new TV can see the difference between non-HD and HD. And I think most of the people who were faced side by side with an HD and Ultra HD would see the difference. They would say, “Wow. That’s really amazing.” And they’d be motivated to do it.

This is a little bit of a contrarian, you know. Because it’s sort of like saying you don’t get something better. We’re just going to take something away. And, and that’s an interesting choice. You know, it’s an interesting way to go.

Jacob: Well, the other part of it that’s interesting to me is that, as I understand it, they don’t… The phones now will not come with the wireless headphones. So now it’s like $160 or whatever to get the headphones, which to me, is just an additional price hurdle that I’m like…

Paul: Well, it’s a way to drive more revenue.

Jacob: Well, it’s definitely a way to drive more revenue, but does it favor the high-end market more so than like the everyman sort of…

Paul: I don’t know. I mean, I am shocked at the number of people I see wearing, Apple watches.

Jacob: Well, that’s true.

Paul: And they’re expensive.

Jacob: Like $500?

Paul: At least. And an iPhone is expensive, and you know, we have… If you look at it, you know, 40 years ago, or 20 years ago, you would have never seen a teenager walking around with a $500 device. That would have been unthinkable. But now we’ve normalized that. And I mean, I got them for my kids, you know, and that’s an amazing change that has occurred through external forces, that my children need to have a $500 device, if not even more than that. But let’s just say $500.

So, you know, Apple, it’d be interesting to see, of the people who buy an iPhone 7 or buy an Apple device, buy the Apple accessories for it. Because you can get $29 Bluetooth headphones, you know, you can get them with a wire, you know, that go to a beltpack or a backpack, you know. And you know, so there’s lot of ways to get it. So if I’m Apple, I need to do things to increase revenue. They are reaching the apogee of their profitability.

That’s a crisis for a business. So what am I going to do? Well, let’s take the headphone jack out and make people buy Bluetooth headphones. And they know that a large proportion of those are, by default, going to buy the ones that Apple make, you know. And I do think it will cause innovation. It will cause innovation in battery technology. It will cause innovation in all these different areas. So there are byproducts.

Jacob: Right. Byproducts that are benefits to the industry.

Paul: Absolutely. But, uh, they made it occur, and I think it’s profit motivated, which isn’t bad. That’s the way it, you know, it works. But I do think, you know, there becomes this whole area here, you know, in this, sort of the addiction to innovation. And, there’s two types of innovation. One is disruptive, and one is incremental. We’re in the incremental place. Now it would be cool, you know, you don’t realize innovation until you see it, you know. I mean, there’s some people like Steve Jobs who see it before other, other people.

Jacob: Well, and the… Yeah, when you’re talking, the moment I think of, like the disruptive is that famous talk where, “Just one more thing,” and he drops the iPhone. I mean, that totally demolished the entire industry, and everybody was recovering.

Paul: Right. Yeah. It disrupted it, really. And it was a change, and all the pieces were there for everybody to put together. But nobody did, and it’s like the minute it was shown, it was obvious. That’s a disruption. Incremental is, okay, let’s, let’s, you know, make the screen harder. Let’s, let’s do this.

Jacob: Make it waterproof.

Paul: Make it waterproof, and so, you know, people, have different sort of elasticity with, you know, if you see something disruptive, it’s like, “Wow. That’s cool. I gotta have it.” But you know, when I grew up, and with technology, I’m one of those people that says, “That’s really cool. I gotta have it.” Most people aren’t that way. They look at it, and they say, “Oh, that’s cool. That’s nice. Oh, well, mine’s fine.” If they’re in the market for buying one, they’ll buy the one with the cooler feature, but not the majority of people don’t say, “New feature. I’ve got to go buy it.”

So that incremental, disruption… I’m sorry. That incremental innovation is not as profit making.

Jacob: Well, I mean, I look at the… So they cut out the, the headphone jack, I’m like, “Well, how does that improve my life?”

Paul: Right. That’s true.

Jacob: I mean, you know, that’s how I look at it. I’m like, if the next iteration is supposed to be an improved product for whatever I use it for in my life, it’s not obvious to me how cutting away something that I… I mean, I have lots of headphones, you know. So, so now you’re adding an additional problem for me to figure out how to connect my iPhone, my iPhone with my existing headphones.

Paul: Right. And it’s interesting, you know. There’s a lot of human… The way humans interact with technology, and one of the things that I’ve noticed with people wearing headphones on an iPhone, or you know, even from the iPod days, is that if you walked up to them, they’d yank the things out of their ears. Now that’s a very different thing. And it was… It was… I didn’t require thought. So you’d just reach up, pull it out, and you’d be conversing with people. Now you’ve got these detached little things. You’ve got to pull them out, and okay, what am I going to do with these?

Jacob: Oh, my gosh. The first thing I saw when they said, “Hey, we’re going to have wireless headphones,” I imagined myself wearing them, and I knew that what would happen is right when I was walking over the street grate, that they were going to fall out.

Paul: Yeah. That’s true. That’s probably true.

Jacob: You just thought, I’m walking across the street in the city, and — boom! — gone. There goes $150 right now the drain.

Paul: Well, $75. You’d only lose one.

Jacob: Right. Okay, yeah.

Paul: You can probably only buy them in pairs, though. So you’ve got always that extra one. It’s like shoes. Oh, man. But I think that, you know, that the… I think we need to be careful, you know. There’s… We’ve talked a lot in the past about cognitive load. And, if anything, I’ve always looked at technology as a way to reduce cognitive load. I don’t want to have to remember that this is this. I want to write it down and have the system remind me that, “Oh, you had to be at this point,” you know. I’d like it to be — and they’re getting there, you know — that “You have to be here at 5:00. It’s 3:00. We’ve checked the traffic. It’s going to take you half an hour to get there. So you need to leave at 4:30.” You know, that would be really nice, you know. And, you know, deal with that fallout of, of that real information.

But one of the things I noticed with iOS10 rr0, two major things. One, it’s a lot slower. And, uh, I had an iPad, have an iPad Air 2. Very happy with it; had it for years. And that’s one of the, that’s one of the issues that, Apple has had is they haven’t been selling as many iPads, because people are happy with them.

So I upgraded to iOS10 and everything is slow, I mean, to the point… You know, I use Outlook, Microsoft Outlook on, on the iPad and on my iPhone. It was almost unusable. And, uh, am I keeping you up?

Jacob: Yeah. Sorry. I just… When you mentioned Windows 10, I just think…

Paul: I see. Did I mention Windows 10? I don’t think I did. So… I mentioned Outlook. So it was really slow, so what did I do? I went out and bought a new iPad, because, you know, the processor is much faster. But, my gosh, they just came out with a new gee-whiz thing, and it forced me to spend $700 on a new iPad. That’s not nice. You know, they effectively obsoleted my machine.

Jacob: Right. The forced obsolete, obsoletion.

Paul: Obsolescence.

Jacob: Obsolescence. I was an English major.

Paul: Yeah. “Was” is the operative word there.

Jacob: But that forced—

Paul: If you’re in Canada, would you be a Canadian major?

Jacob: I said, Can— I said, “Oh, he’s a… He’s from Canadia,” the other day.

Paul: Well, this do say “Ca-NAH-dah” up there, so, a…

Jacob: Yeah. So that forced obsoleshence.

Paul: Obsolescence.

Jacob: Obsolescence is uh incredibly frustrating with products, because I’ve noticed that it’s about, like, uh, you know, it’s about the 18-month mark of a two-year contract that is just…man. It just, like, gets filled with sand.

Paul: So that was one thing. The iPad got so slow that I had to replace it. And the other thing was, is the swipe to unlock. I was… I had muscle memory for that, and I still find myself fumbling over, okay, now I’ve got to hover my finger over the button. That muscle memory was so ingrained in me. And okay, so you say, “Well, that’s no big deal. You’ve got to change it.” But it’s another thing that is… It’s another little log that goes on the cognitive load, uh, and, you know, I look at that, and there’s some way you can turn it off, but I don’t think it’s exactly the way it was before, uh, and I just look at that decision, and I’m saying, “Oh, you know, now I have to press and click.” I’m like, “Why do I have to do that?”

And you know, there was a choice made. And I’m sure there was a big, you know, executive meeting about it. You know, we’re going to do this. And I’d leave well-enough alone in some areas.

But again, they’re trying to push toward innovation.

Jacob: So do you think, just as we’re concluding on this, do you think that other makers in the industry are going to follow suit? Or are they going to kind of brush off this innovation from Apple?

Paul: Well, what did, what did, did Google and the new phones include a headphone jack?

Jacob: I’d assume as much.

Paul: I think they did. I think it would have been in the news had they not. It will be interesting to see who adopts it. I don’t think they will. I don’t think they’re going to follow suit.

Jacob: It will be interesting to see if Apple regrets this and puts it back in the iPhone 8.

Paul: Yeah, boy, I don’t know. They’re not good at that.

Jacob: Yeah. They don’t retreat very much. Do they?

Paul: Yeah. They don’t. They don’t. And yeah. But again, you know, hey, they should be intellectually honest and take it out of all their devices, because, you know, those little headphones in the wild. I mean, who’s going to protect them?

Jacob: Well, thank you for listening to this episode of The Edge of Innovation, talking about the iPhone 7 and the deletion or the, saving of the iPhone jacks. I think we’ll put it like that. Right? We’re saving iPhone jacks by not having them in the iPhone 7 now.

Paul: Saving headphone jacks.

Jacob: Headphone jacks. Yeah.

Paul: Save the headphone jack.

Jacob: Save the headphone jacks. That should be our mantra now for the iPhone 7. Thanks for listening today, guys. And we hope you have a good week.

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Also published on Medium.