Jan 2, 2019 · 26m · a16z
a16z Podcast | Apple Has Lock on Luxury Smartphones, But Not Business of TV
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of the a16z Podcast, host Michael Copeland and tech analyst Benedict Evans analyze Apple's major product launch event, examining the strategic, technological, and market implications of the iPhone 6s, iPad Pro, and Apple TV.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 3.0 Guest teaching 4.2 Guest disagreement 1.7 The host pushing back 1.7
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 14:14 Direct premise correction on tablet market
When Copeland attempts to summarize consumer behavior regarding tablets, Evans immediately interrupts to disagree, stating 'Well, no, the answer has been...' to correct the host's premise.
Hardest push from the host ▶ 9:01 GM financing business model challengeCopeland challenges Evans's framing of Apple's installment program by asking if Apple is entering the high-margin auto-style financing business like GM.
Biggest teaching moment ▶ 24:05 Cable bundle structural analysisEvans delivers a clear structural lesson on why Apple cannot easily disrupt television, pointing out that existing cable bundle economics disincentivize content owners from changing their business models.
The host holds their own ▶ 9:01 Corporate financing comparisonCopeland demonstrates business acumen by drawing a direct comparison between Apple's new installment program and GM's profitable auto financing subsidiary.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| iPhone 6s Innovations: 3D Touch and Live Photos | 3 | 4 | 1 | 1 | Host Michael Copeland asks introductory and clarifying questions regarding the hardware upgrades like 3D Touch and Live Photos. Guest Benedict Evans provides deep technical contextualization around structural OS advantages and hardware engineering. | |
| Market Dominance and Apple's iPhone Upgrade Program | 4 | 4 | 2 | 2 | Copeland attempts a business analogy comparing Apple's installment plan to GM financing cars. Evans clarifies that Apple's financing is off-balance-sheet and primarily designed to lock users into an annual hardware membership. | |
| iPad Strategy: iPad Mini Decline vs. iPad Pro Innovation | 3 | 5 | 2 | 2 | Evans reframes Copeland's take on consumer tablet buying trends, laying out a macro breakdown of 5-year PC replacement cycles vs. smartphone scale. Copeland offers personal observations about laptop usage. | |
| Apple TV Hardware, App Ecosystem, and Casual Gaming | 3 | 4 | 2 | 2 | Copeland pushes Evans on Apple's ambitious claim that they changed television. Evans breaks down how hardware and app SDKs evolved without altering the underlying commercial TV distribution model. | |
| Siri Integration and TV Industry Commercial Realities | 3 | 5 | 2 | 2 | Copeland questions the absence of major content partner announcements. Evans educates on cable industry economics, explaining how rigid bundle structures prevent TV networks from partnering with Apple. | |
| Event Structure, Omitted Content, and Conclusion | 2 | 3 | 1 | 1 | A brief meta-discussion on event logistics where Evans outlines what was omitted due to time constraints during Apple's compressed 2-hour presentation. |
Statements from this episode (13)
Evans: Smartphone hardware improvement curve is flattening out
“You know, the pace of improvement is kind of slowing a bit just because, you know, we're not making, the curve is kind of flattening out a bit, and it's a bit harder every year to tell why this one's better than the one from last year.”
Evans: Apple's vertical integration gives it a structural advantage over Android
“Whether it's good or not, it's the kind of thing that's very, that's much more difficult for an Android OEM to do because Apple controls the operating system and all the apps as well. Whereas whenever Samsung tries to do something like that, it only works with…”
Evans: Apple captured Samsung's high-end smartphone market share with larger iPhones
“Apple has always been pretty secure in its market, and then it sounds like Apple had, as it might be, a half to two-thirds of the high-end, and Samsung had most of the rest. With the big phone, it took, big phones last year, it took a lot more of that, and you…”
Evans: Carrier transition to unbundled installment plans did not harm high-end smartphone sales
“And that didn't happen at all. Because actually it's still an installment, and people kind of knew that they were paying an installment for the phone anyway, and people actually still want to get those phones.”
Evans: Apple's iPhone Upgrade Program uses off-balance-sheet third-party financing
“It's not even on their balance sheet. It's been done by a third-party financing company and, you know, GM made with a low-margin business, and all the margin was actually coming from the financing. I don't think Apple are doing that here, and we want to have t…”
Evans: The iPad Mini is failing due to larger iPhone cannibalization
“From looking at the kind of the metrics that I've seen, it looks like the iPad Mini is basically not working, because people are just buying, if you're, like, your people will buy the Six Plus.”
Evans: Styluses lack mass consumer appeal because most people cannot draw
“I'm pretty skeptical about the kind of the broad value of styluses, styli, I think. I mean, people always show you drawing, and people creating beautiful illustrations, and I think, fine, what about the other Seven billion people on earth you can't draw.”
Evans: Apple controls two-thirds to three-quarters of online tablet usage
“And then there is a market for like The post-PC replacement, which is what Apple and Samsung and everybody else is trying to play in, and Apple has like three-thirds, two-quarters has like two-quarters to two-thirds of that, and if you look at all the usage st…”
Evans: Apple TV adds an SDK but leaves TV's commercial model intact
“Version two of the Apple TV is not a fundamentally new product. That is to say, it's basically the same UI concept. It's basically the same stuff, except that now there's an SDK. So to get HBO onto it, Apple doesn't have to write the app. To get X or Y or Z on…”
Evans: Nintendo Wii failed long-term because non-gamers bought no additional software
“The problem the Wii had was it turned out that they were selling games to people who didn't like games, and people bought it for the game that was bundled, and then never bought any more games. So we just basically, it looked like this huge success, and then i…”
Evans: Siri performs well on Apple TV due to narrow search domain
“Siri should work well here because it's such a kind of a narrow domain. It doesn't have to deal with any question you could possibly ask. It's just got to, like, do voice recognition, like, I want to watch Guardians of the Galaxy. It's not hard.”