Overture:


As mass production has to be accompanied by mass consumption; mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.
-- Marriner Eccles

This quote is part of the permanent preamble to one version of these endeavors. Today's essay was going to deal with the Death of Apple, but, of course, Apple isn't dead and a more interesting bit of reporting passed by my eyeballs.

To wit, this piece by Randall Stross on who's to blame for the Theranos fiasco. In a nutshell, the real quants figure out the snake oil, while the fools did not.


Part of the company's appeal was the familiar origin myth of Theranos's founder, Elizabeth Holmes, who, like Bill Gates and Mark Zuckerberg before her, dropped out of college in order to found her company.

That might impress some social media investors, but in life sciences, everyone puts in years of formal study just to earn a seat at the table. For example, at MPM Capital, a venture firm that invests in life sciences, almost every one of its 20 investing directors and partners has either a Ph.D. or M.D., and one has both. Even the general counsel has a Ph.D. in cell, molecular and developmental biology.

Real quants are difficult to flummox: the scientific method matters in science, but not so much in web driven social networking apps. There's a reason dropouts can get rich doing the obvious: their limited vision makes the obvious appear unique. Real science doesn't give a rat's ass about such playthings.

So, back to Apple. I, proudly, was/am in the orbit of Dr. Gordon's book, and have mused about the relevance of his conclusions (mine, too, and long before I read the book). One phrase that he repeats, in various forms, throughout the book is, "it could only happen once". My standard example is the periodic table; in three ways. First, humans don't invent elements (molecules, yes), we merely find them. Second, once we have found all of them, we have hit a wall of infinite depth and infinite density. They ain't no mo, Billy Bob. And, third, as we found new elements, we devised new devices. The transistor wouldn't be possible before the discovery of germanium: "Historically the first decade of semiconductor electronics was based entirely on germanium." Without new elements to find, the momentum to make new devices ebbs. We are in that perpetual future.

The same is true of iPhone. Not the first smartphone, but Apple had cornered the supply market of cap touch screens, so they had that sort of smartphone to themselves for a couple of years. A natural monopoly, commercially created. Also note that iPhone was the first, and only, product that moved Apple's revenue/profit needle. Ever. It can only happen once. The TAM is satisfied. Eccles must be grinning from ear to ear.

Some, perhaps most, of Apple zealots keep bleating about how Watch will be the next iPhone, what with all of these (not yet specified, of course) whiz-bang new sensors. Most of them health related. Tim and Elizabeth are getting married. There is no way FDA gives Tim a blank check to sell health devices. Not going to happen, not least because the top of the wrist is just about the worst place on the body to read internal data. QED.

Views: 114

Comment by koshersalaami on April 27, 2016 at 11:20am
What could only happen once? I agree about the Watch. But I've seen companies innovate more than once. Not for that kind of market share, though, at least on that scale.
Comment by Robert Young on April 27, 2016 at 11:55am

finding a specific element happens only once.  the building of transcontinental railroad happens once.  the first cap touch screen smartphone happens only once.  and so on.  Apple zealots think that there's another iPhone in Apple.  history says, about as often as hen's teeth.

Comment by koshersalaami on April 27, 2016 at 1:51pm

If we accept the proposition that Apple invented the personal computer, the iPhone IS another iPhone

Comment by Safe Bet's Amy on April 27, 2016 at 2:16pm

Nah.  

You ignore the creation of the PC (as KS mentioned), the iPod, iTunes, etc., etc., etc.  They have consistently built a better mouse trap.  

Comment by Robert Young on April 27, 2016 at 2:50pm

Apple didn't create any PC.  the microprocessor machine pre-dated the first Apple computer.  the PC (as brand or device) was invented by IBM.  the iPod was a late entry into MP3 players.  iTunes ditto.  the point is:  if you look at a graph of Apple revenue or profit, from the beginning to now, it was an irrelevant company until the iPhone.  the Mac, in its many variations has never been more than 10% of personal computer market; and that share has been falling in recent years.

Comment by Safe Bet's Amy on April 27, 2016 at 3:04pm

Robert you are splitting hairs too fine to even see.  

Apple created the first commercially viable personal computer back in 1976.  The IBM PC didn't appear until 1981.  

As for the iPod, literally BILLIONS of those have been sold and right along with THOSE sales went the astronomical sales via iTunes.  (which kinna shoots your whole "them being irrelevant" thing in the foot).  

So yes, the iPhone had a huge impact, but that hardly diminishes what Apple was or will continue to be.

Comment by JMac1949 Today on April 27, 2016 at 3:24pm

Amy you may be pleased to know that both you and Robert are wrong and the Programma 101 was the first commercial "desktop personal computer", produced by the Italian company Olivetti and invented by the Italian engineer Pier Giorgio Perotto, inventor of the magnetic card system. The project started in 1962. It was launched at the 1964 New York World's Fair, and volume production began in 1965, the computer retailing for $3,200.

No word if any were manufactured by contract labor goat herds on hillsides in Sicily.  ;-)

BTW: I worked for eight years for a company called Micropolis in California and we were a primary supplier of floppy and rigid disk drives to Olivetti among other PC companies including Radio Shack, Vector Graphics and Commodore.

Comment by Robert Young on April 27, 2016 at 3:36pm

JMac1949 (which, I gather makes you my age):

the issue wasn't any kind of "personal" computer (engineering workstations running full-blown cpus existed long before that, generally running *nix), but rather a micro-processor architected machine.  there were many before any from Apple.  I used a Tektronix 4051 (here: https://en.wikipedia.org/wiki/Tektronix_4050 ) around 1976; it ran on a real cpu, the Motorola 6800.  the Apple I ran a 6502, not much of a cpu.

"Perhaps the first computer that might qualify as a "workstation" was the IBM 1620, a small scientific computer designed to be used interactively by a single person sitting at the console. It was introduced in 1960. One peculiar feature of the machine was that it lacked any actual arithmetic circuitry. To perform addition, it required a memory-resident table of decimal addition rules. This saved on the cost of logic circuitry, enabling IBM to make it inexpensive. The machine was code-named CADET and rented initially for $1000 a month.

In 1965, IBM introduced the IBM 1130 scientific computer, which was meant as the successor to the 1620. Both of these systems came with the ability to run programs written in Fortran and other languages. Both the 1620 and the 1130 were built into roughly desk-sized cabinets. Both were available with add-on disk drives, printers, and both paper-tape and punched-card I/O. A console typewriter for direct interaction was standard on each."

here: https://en.wikipedia.org/wiki/Workstation#Origins_and_development

so, we're all right.  or left.

Comment by JMac1949 Today on April 27, 2016 at 3:38pm

BTW: If you want to restrict viable to the US market then it was in 1973 that the IBM Los Gatos Scientific Center developed a portable computer prototype called SCAMP (Special Computer APL Machine Portable) based on the IBM PALM processor with a Philips compact cassette drive, small CRT and full function keyboard. SCAMP emulated an IBM 1130 minicomputer in order to run APL\1130. In 1973 APL was generally available only on mainframe computers, and most desktop sized microcomputers such as the Wang 2200 or HP 9800 offered only BASIC. Because SCAMP was the first to emulate APL\1130 performance on a portable, single user computer, PC Magazine in 1983 designated SCAMP a "revolutionary concept" and "the world's first personal computer".

I still own a 1984 DOS version of an IBM luggable (portable) PC that came with a whopping 640Kbyte of RAM and two 5 1/4 inch floppy drives.  I replaced one of the floppy drives with a prototype Rodime 3 1/2 inch rigid disk drive with an amazing 5 megabytes capacity; the hard disk serial number is 0000005, making that the fifth 3 1/2 inch disk drive ever made.  My total investment in that PC was $2300 include the hard disk.

Comment by Robert Young on April 27, 2016 at 3:45pm

-- SCAMP emulated an IBM 1130 minicomputer in order to run APL\1130.

good God!!!!  APL is the bane of any computer scientist.  built by a genius, of course.  known for its "one liners": http://catpad.net/michael/apl/

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