BlackBerry CEO Questions Future of Tablets

Bloomberg: BlackBerry CEO Thorsten Heins:

In five years I don’t think there’ll be a reason to have a tablet anymore. Maybe a big screen in your workspace, but not a tablet as such. Tablets themselves are not a good business model.

Not for BlackBerry anyway.

Glass How-to: Getting Started

Project Glass on YouTube: Google posted up an introductory video explaining the basics of Glass. I believe one of the main advantages of Google Glass is hands-free: You no longer need your hands to do a lot of the things you did on a smartphone. The touch UI looks fairly intuitive to me, except that I have to wear a pair of geeky glasses, tap and rub its temple. I don’t want to be tapping and rubbing the Google Glass temple; I’d rather be tapping and rubbing the display on my smartphone. If I ever get over the geekiness, this is what I want to be doing instead: “Glass, take a photo. And send it to Flickr.”

Why Didn’t Apple’s Margins Improve?

Horace Dediu:

My guess is that the largest contribution to the “reduction of margin” is the increased cost of components.

But why did component costs increase?

The primary method of driving down costs is to make more of the same thing. Apple is failing to make more of the same thing. Take displays for example: Both the iPhone 4 and the 4S made use of the same 3.5-inch LCD. When Apple introduced the iPhone 4S the company procured more 3.5-inch LCDs and drove down the cost of the display for both the iPhone 4S and the iPhone 4. This didn’t happen with the iPhone 5. Apple was not able to make more of the same thing and so the company was not able to drive down the cost of the display as much as it did in the past.

iPad mini 2

When the iPad mini 2 comes out it wouldn’t be out of character for Apple to reduce the price of the original iPad mini. To what price? I’d guess to around US$249.

Larger iPhone?

During Apple’s earnings call, Tim Cook answered a question regarding the 5-inch smartphone market. Cook cited factors other than display size customers value: resolution, color quality, white balance, brightness, reflectivity, screen longevity, power consumption, portability, and compatibility with apps. He then stated “our competitors had some significant tradeoffs in many of these areas in order to ship a larger display.” I disagree.

Let’s start with resolution. Most, when mentioning resolution, are referring to pixel format as in something like 1920×1080. But even if Cook was referring to the correct definition of resolution as in density, a larger display does not need to make a resolution tradeoff. On the contrary: High end 5-inch smartphones sport a pixel format of 1920×1080 and that translates to a resolution of 441 ppi. Both the pixel format and the resolution is higher than the 4-inch iPhone 5.

Color quality has no direct connection to the size of the display. What might have been on Cook’s mind is the terrible color quality of OLED displays used by Samsung on many of its larger smartphones like the Galaxy S III, IV, Note II, etc. But look at the HTC One or the LG Optimus G Pro; these smartphones feature large displays with excellent color quality. No tradeoff there.

White balance is terrible on OLED displays, but on high end large LCDs used in smartphones such as the HTC One and the LG Optimus G Pro white balance is just as good as the iPhone 5. Like color quality, there is no direct connection between white balance and the size of the display, unless it’s a Samsung OLED smartphone. (This used to be true, not any more.)

I am convinced when Cook was answering this question Samsung was on his mind. Who can blame him? Samsung is the only company that sells massive smartphones with inferior displays, sells a lot of them, and makes a lot of money. Apple’s biggest (and only?) competitor when it comes to smartphones is Samsung.

Reflectivity is a big issue with touch devices. This again has nothing to do with display size. Glossy cover glasses are one big reason why there is so much reflectivity, but not size.

Screen longevity is not a concern for LCDs, but it is for OLED displays. Most OLED displays if used on a regular basis and at high brightness will not last more than a couple of years before the color becomes unbalanced due to the blue OLED material dying out quicker than the red or green.

Power consumption is a valid tradeoff, but smartphones with larger displays generally have more space than smaller smartphones for larger batteries.

Portability is also a valid tradeoff, but almost half of the adult population carries some type of bag. For them the difference in portability between a 4-inch iPhone and a 5-inch Samsung is trivial.

Compatibility with apps is a weird one. A larger 5-inch iPhone with the same pixel format of 1136×7640 would have no compatibility issues with current apps designed for the 4-inch iPhone 5. Larger fonts and larger icons would be great for an aging population.

Cook didn’t mention one-handed operation as a tradeoff because one-handed operation on the iPhone 5 is difficult for a lot of folks. If Apple had stuck to a 3:2 aspect ratio 3.5-inch display for the iPhone 5 Cook could have mentioned just two tradeoffs—one-handed operation and compatibility with apps—and those would have made sense. But after three generations of 3.5-inch iPhones Apple decided to make the display bigger and the tradeoffs Cook mentioned aren’t good enough reasons for why Apple shouldn’t make an even bigger iPhone.

The Extinction of Film

David S. Cohen, Variety:

Odds are that before the end of the year, one or more will decide that the meager returns from 35mm screens simply don’t justify the cost of prints, particularly for their tentpole releases.

There are almost 40,000 screens in the U.S. and Canada, and 86% have converted to digital according to the National Association of Theatre Owners.

“Jony is Obi-Wan.”

Bono, TIME:

What the competitors don’t seem to understand is you cannot get people this smart to work this hard just for money. Jony is Obi-Wan. His team are Jedi whose nobility depends on the pursuit of greatness […]

LG Display: Q1’13 Results Were Good & Bad

via John Gruber. Min-Jeong Lee, The Wall Street Journal:

LG Display Co. swung to a net profit in the first quarter as tablet screen sales to Apple Inc. increased, and analysts said the South Korean display maker’s fortunes this year will be closely tied to demand for the U.S. company’s gadgets.

This is how I understand the analysis by Min-Jeong Lee: LG Display lost money in Q4’12, but sold more LCDs geared for Apple’s iPad or iPad mini (or both?) and that’s why the South Korea-based display manufacturer made a profit in Q1’13. And the only way for LGD to continue generating profits in 2013 is for Apple’s iPads to sell well and for Apple to continue procuring iPad displays from LGD.

Here’s a different take on the same news. Miyoung Kim, Reuters:

LG Display Co Ltd reported its smallest profit since it returned to the black in the second quarter of last year, as demand for iPhone and iPad screens from Apple weakened amid concerns the U.S. company is losing its luster in the mobile device market.

Here’s what I think Miyoung Kim is trying to say: Apple is concerned the U.S. is losing its luster in the mobile device market. So the company’s demand for iPhone and iPad LCDs from LGD weakened. And that’s why LGD’s profit in Q1’13 was the smallest since Q2’12.

How can both of these analyses be true? Let’s see if we can make sense out of these seemly contradictory analyses. LGD’s sales of iPad LCDs to Apple increased. The portion of iPad LCD sales to Apple grew relative to the portion of iPhone LCD sales to Apple. LGD’s sales of iPhone LCDs to Apple decreased. Because LGD’s sales of iPad LCDs to Apple grew the South Korea-based display manufacturer was able to eck out a profit in Q1’13, but because LGD’s sales of iPhone LCDs to Apple declined profits could have been better but weren’t. I think that makes sense, doesn’t it?