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Apple manages to both underwhelm and antagonise with latest launch event

Gadget giant Apple had one of its Autumn events, but this time the new iPhone was AWOL. Meanwhile a new bundle of services is sure to face scrutiny from antitrust authorities.

Apple usually unveils its latest iPhones around this time of year in order to give its Q4 numbers their customary spike. Furthermore Apple is long overdue a 5G launch, with most of its competitors having had 5G phones on the market for over a year. It was no surprise when it didn’t mention 5G last year, since it has only recently been forced to tap-out by Qualcomm, but it should have got its act together by now.

Instead we got tablets and wearables. New iPads stopped being exciting years ago as they tend to just be incremental spec upgrades, but at least this one featured the debut of Apple’s new A14 bionic chip, which is its first to use the 5nm process. The measurement refers to the diameter of the gate within an individual transistor – the basic component of a chip. Hence the smaller the number, the more transistors you can cram onto the same size of semiconductor wafer.

Each successive ‘node’, as they call a given process, thus increases the amount of processing a fixed sized chip can do. This is especially handy for mobile devices, where size energy efficiency and heat production are all key considerations. You can see the claims Apple makes of the A14 below, which take on extra significance when you consider it will be the chip powering the iPhone 12 when it eventually turns up.

Using breakthrough 5-nanometer process technology, A14 Bionic is packed with 11.8 billion transistors for increased performance and power efficiency in nearly every part of the chip. This latest-generation A-series chip features a new 6-core design for a 40 percent boost in CPU performance, and a new 4-core graphics architecture for a 30 percent improvement in graphics.2 To deliver breakthrough machine learning capabilities, A14 Bionic includes a new 16-core Neural Engine that is twice as fast, and capable of performing up to 11 trillion operations per second, taking machine learning apps to a whole new level. A14 Bionic also includes second-generation machine learning accelerators in the CPU for 10 times faster machine learning calculations. This combination of the new Neural Engine, CPU machine learning accelerators, and high-performance GPU enables powerful on-device experiences for image recognition, natural language learning, analyzing motion, and more.

The other gadget launched was a new Apple Watch, which is also a bit better than the last one, but that was it. To be fair, in the absence of a new iPhone it’s hard to imagine what Apple could have served up to reduce the sense of anti-climax. You have to assume something has gone seriously wrong in the production of the iPhone 12 for Apple to miss its usual deadline, but it could just be general disruption caused by the coronavirus pandemic.

One theme that was consistent with last year was a greater emphasis on services, which Apple now makes more from than the GDP of most countries. The big reveal was of Apple One, a bundle of a bunch of Apple services including Apple Music, Apple TV+, Apple Arcade, Apple News+, Apple Fitness+, and iCloud.

“Apple One is a masterstroke and represents a first step into bundles,” said TMT Analyst Paolo Pescatore. “A move to drive value from users and the untapped opportunity with families. Apple recognises the growing importance of services to its future growth. All of the building blocks are in place. Now it is all about strengthening its line of programming across the board. This will pave the way for a new service-based business model.”

Not everyone saw the launch as such great thing, however. Audio streaming giant Spotify had a public moan about Apple One harming competition. On the surface Spotify’s objections seem groundless. All Apple has done is repackage a bunch of its services into a bundle that offers savings over subscribing to each separately. Companies do that all the time.

The thing is, Apple also has control over the channel through which the world’s most affluent consumers access all their digital products and services. This means that if it’s seen to favour its own stuff over others on that platform, it could well be found to be acting in an anticompetitive way. This is the basis for Epic’s action against Apple and Spotify now seems to be alleging Apple is using its position to unfairly promote its own competitive streaming services.

While we’re not entirely convinced by Spotify’s argument, such as it is, at the very least this seems to be another pretext for competition authorities to look at how fairly Apple treats third parties that are reliant on its platform to access the market. When companies reach a certain size almost everything they do has competition implications, a fact not lost on Spotify.


3 comments

  1. Avatar James David 16/09/2020 @ 3:10 pm

    Balanced view Scott. Thanks!!

  2. Avatar Diane 16/09/2020 @ 4:30 pm

    Does apple pay 35% to list it’s own apps? I wonder why Microsoft couldn’t bundle explorer hmmm. Are your reporters appbots? I think yes.

    • Scott Bicheno Scott Bicheno 17/09/2020 @ 9:21 am

      What’s an appbot?

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