The Apple AirPods won’t succeed

Apple AirPods are the price Apple pays for innovation.

Apple AirPods
The New Apple AirPods

The problem is that I don’t want to pay that $159 price for the new Apple AirPods.

I am a died in the wool Apple guy, as you know. I write this blog on my MacBook Air, have an iPhone 6+, two iPads (including the iPad Pro), an iPod in my car and an Apple TV connected to all the TVs in my home. Even at Stealing Share, we are Apple folks with an Apple server and Airport Wireless.

But I do have a simple complaint. Apple focuses on great design. But often, that design is more about how things look as opposed to how they work.

Apple Airpods
The Old Bluetooth Earpiece

I remember when I bough my first iPhone nine years ago and also paid for the Bluetooth headphone (not anything like the Apple AirPods). It was very cool looking and was tiny compared to competitive products. But syncing it to the phone and keeping it charged turned out to be a nightmare. I have never bought another Bluetooth product from Apple.

I won’t buy the new Apple AirPods either. Once again, they look very cool and are tiny compared to the competitor’s products. But they suffer from the same flaw as that earpiece I bought almost a decade ago. They simply won’t stayed charged long enough for me to use them.

Bluetooth headphones are common today

I travel a great deal and always take Bluetooth headphones with me. They are large, bulky and cumbersome but… they are noise cancelling and seem to last for days. Apple claims its new Apple AirPods will last for four hours between charges. That means they won’t even last a single cross country flight. They are worthless to me.

Apple AirPods
Apple packages everything with style

Apple AirPods look great

Great design says that form follows function and Apple often forgets this. I want them to be tiny, cool and simple. But I demand that they function in a way that matters to me. These have pushed the limit on smallness and Bluetooth compatibility but the technological limitations of having a powerful enough battery in such a small design is not there yet. So I’m not there yet either.

Apple eliminating the earphone jack on the new iPhone seems as overdue to me as when the original iMac eliminated the floppy disk drive and the MacBook eliminated the CD drive. I don’t need to connect a wire to my phone. But I NEED the device I use for sound and talking to last me a full day. Apple needs to be as concerned about how well something works as much as it is obsessed with how it looks.

So the Apple AirPods won’t find their way into my briefcase. Its too bad really. I would prefer to buy more Apple products but sometimes they leave me in the cold.

Apple Sirius XM would be a bad fit

The battle over market share in the automobile industry will be fought over technology, according to a study by Nielsen. With that in mind, CNBC’s Jim Cramer said an Apple Sirius XM acquisition would make sense so Apple can own more space in auto technology.

For the first point, consumers are already expecting a greater level of technology in their cars. Most of us have become accustomed to using Bluetooth to play music and podcasts from our phones through the auto’s stereo system. And GPS is now simply a table stake. It’s what you have to have to even be a car manufacturer.

But the stakes are getting higher because the differences between automobiles are small. They all last longer, get better gas mileage and have similar designs.

Now, though, the new expectation is that all cars will have rear camera mirrors, smartphone-linked media functionality, blind spot detection, surround view cameras and smartphone-navigation interfaces. If they don’t have those things, then you can’t be manufacturing cars.

That doesn’t even take into account the coming of driverless cars. Like most of our devices, we’re expecting our cars to be smart, just like our phones and, for some of us, our homes.

Apple Sirius XM would not fix Apple’s issues.

That’s why Cramer is proposing the Apple Sirius XM acquisition. Apple is reported to be working on a car itself. Even if that doesn’t happen (and I have my doubts), Apple wants to be more important inside the car than it is now. Just like any technology company.

Apple Sirius XM
Apple doesn’t need Sirius XM.

But Apple Sirius XM is a bad fit. While Sirius XM is adding subscribers, it doesn’t fit within Apple’s brand. Apple doesn’t have permission to own Sirius XM. Actually, more accurately, Sirius XM doesn’t fit into Apple’s brand of “Think Different.” Sirius XM is radio and, while that has value, it does not represent the true innovation that has made the Apple brand.

Admittedly, Apple has lost its way a bit in fulfilling its brand promise. The brand that Steve Jobs built set very high expectations that Apple hasn’t met recently. It just keeps trotting out new versions of the products it already has, while purchasing Beats in an attempt to goose Apple Music. What would it need Sirius XM for?

If I were Apple, I’d concentrate on new products, not just acquiring new properties in the hope that they will help. Any new innovation must come from Apple. Because the reason people buy Apple products and stand in line for the first run of them is because of the brand.

If the new product or service does not represent “Think Different,” than Apple shouldn’t do it. And Sirius XM is not different.

Why are we slow to adopt the Apple Watch?

A funny thing has happened to my family members of late – they won’t go anywhere without their Apple Watches.

Me, I still don’t have one. (I am a fervent collector of antique pocket watches, and won’t leave home without one.) But that doesn’t mean I haven’t noticed the behaviors of my most beloved.

Apple Watch
Why are we so slow to adapt to the Apple Watch?

Right now, my wife, daughter, daughter-in-law and son all own Apple’s wrist technology. In fact, three of these folks camped with me in Shenandoah National Park, where each was dutifully monitoring the steps and calories burned on hikes.

I have to admit; I felt a twinge of jealousy over the cool gadgetry. This was quite a change from earlier feelings I had about the device. I’ll never leave my pocket watches. But, after totally dismissing the Apple Watch when it first came out, I re-considered.

The Apple Watch is only being considered

Not enough to buy, however. Like a lot of people, it has taken some time to consider it. My son admitted that he stopped wearing his watch for a long while. He even tried selling it on Craigslist (but to no avail) until he came around again to liking it again and using it daily. My wife and daughter just bought their watches last week (a long time after the watches first arrived on the scene). Same, too, with my daughter-in-law. For many, it appears that the jury is still out as to whether or not it’s a necessary buy.

Gone are the days where people couldn’t live without an Apple product. Now, it just peaks our curiosities. Sure, everything looks cool and all, but it’s just not all that different anymore. That’s a different feeling than I’ve previously had about Apple, often waiting in lines on release days in the past.

Not so much these days.

Could that level of vigor come back? You bet. But Apple’s recent track record says otherwise. As for now, people, like my family members, will eventually come around to try a new Apple product. How long will it take them? And what does that say about the current state of the Apple brand?

A market study in the era of Peak TV

The winners and losers of Peak TV, and what Apple TV can do about it

We are living in the world of Peak TV, a term coined by FX President John Landgraf a few years ago – and he was right in many ways. We are living in an unprecedented era in which the TV options are more varied, more accessible, better overall and just plain more.

In 2015, there were a whopping 409 original scripted series, which is double what was produced six years ago and is now a record. 2016 promises to top that.

Landgraf coined that term because he believes the industry can’t sustain that kind of production. There are only so many eyes watching screens so how can more than 400 shows exist and networks continue to succeed?

For the first time, networks are taking on the challenges of Peak TV by viewing themselves as brands rather than simply deliverers of content. If you’re just a collection of shows without a guiding principle then you won’t succeed. That’s true in television and it’s true in any business.

How do networks figure out their brand? How does it affect which shows a network airs? And how can brand aid in the battle against (or co-exist with) the streaming giants of Netflix, Amazon and Hulu?

With most of us waiting breathlessly for a groundbreaking Apple TV to fix this problem, what are the networks doing now and what should Apple TV look like? What is the future of Peak TV?

The streaming networks changed everything

Let’s start answering those questions by addressing the elephant in the room: Streaming networks. They have significantly changed the landscape because it took the power from the networks and gave it to viewers. No longer would consumers be beholden to what the networks offered and when they could see shows.

The viewer emerged as the one in control.

Netflix
Netflix changed the way we watch TV.

Consumer control is now the way of the world. The days of being told that you could only watch a limited offering at a certain time are gone. That is the single biggest reason why the streaming networks have succeeded.

Sure, their offerings have often been stellar. But that’s only a small part of it. Netflix, which started as a mail order DVD rental service, didn’t really take off until it jumped into streaming with content that was early seasons of current and past shows from other networks.

You might even remember the outcry when founder Reed Hastings planned to split the two sides of the Netflix business into two different brands, causing fears among Netflix customers that their subscriptions were going to double. Hastings backed off.

The success of Netflix was in giving customers control, thus positioning TV networks as out of touch and even arrogant. The idea that you could only watch what you wanted under somebody else’s rules created images of TV execs sitting in their offices and smoking cigars like Mr. Potter in It’s a Wonderful Life.

Netflix also structured its services as subscription based instead of on a pay-per-view basis. I’ve always thought that one of the reasons Apple has struggled with its online services is because it is not subscription-based. In music, Pandora and Spotify have overtaken the industry because they’re subscription based. When Apple finally released a subscription-based Apple Music, it was too late. (That and other problems.)

Subscriptions add the illusion of control because, subconsciously, the viewer (and listener) believes they are watching (and listening) for free. When you charge on an individual basis – like what Louis CK did recently with his critically acclaimed series Horace & Pete – many commentators were outraged that the comic would charge per episode. How dare he?

The advantages of being a cable network

Before we go any further, let’s put this out front. We’re not going to examine the broadcast TV networks: NBC, CBS, ABC and FOX. Those networks still air shows that get high ratings and bring in tons of money even if their ratio of failure is enormous. In fact, they are the ones hurting the most from Peak TV.

We’re more interested in the networks that have upped their sophistication, matching the tastes of the television watching public and critical landscape. Let’s focus on the cable networks.

Within them there are subsets. There are the prestige networks like FX and AMC (for my money, the two best networks on TV). Then there are the niche players, ranging from a powerhouse like ESPN to The Food Network, Bravo and Nickelodeon. We’re not going to get much into the niche networks but just note: They should not be ignored. HGTV’s Fixer Upper, for example, is a ratings juggernaut.

A third subset is the premium channels like HBO and Showtime, which have a different delivery and payment system than the rest.

What are the advantages to each? For FX and AMC, they have each created a prestige brand based on the success of its shows. Breaking Bad and Mad Men made AMC. The Shield provided liftoff for FX.

Peak TV
Two shows that lifted the AMC brand.

Both networks then became known for high-level, gritty programming that led for FX to roll out Justified, The Americans, Fargo and The People vs. OJ Simpson. All are terrific.

AMC had original programming before the double whammy of Mad Men (July 2007) and Breaking Bad (January 2008) gave it the identity it has now.

What’s interesting about each is that they both started as niche programmers. AMC was the place for cheesy moves from the 70s and 80s. AMC, after all, stands for American Movie Classics. (Although its definition of classic was different than mine.) FX was the place for special effects-laden action movies that had completed their theater and premium channel runs. (The name FX was actually supposed to mean FOX +, of a sort. But the movies they aired suggested otherwise.)

Therefore, each had to overcome pre-conceived notions about themselves.

To do that, each rebranded itself with an actual meaning. AMC rebranded under the theme of “Story Matters Here,” which immediately set it apart from both its past history and other networks. (The less said about its current theme, “Something More,” the better.)

FX added the theme of “There is No Box” (meaning, think outside the box). Soon, the programming each offered fulfilled their promises – that they were different and better.

Could they work as a streaming service? Well, each has a streaming app today and they are two networks that most rely on so-called second-day ratings, meaning viewership measured by DVR recordings, cable on demand and streaming from their apps. Sure, it could work as a streaming service.

Peak TVBut part of the advantage of being on a cable (or satellite) system is increased awareness and brand recognition. You have the ability to promote your new shows during commercial breaks of your current ones. While cutting the chord is becoming increasingly popular, only about one in seven Americans have actually done it.

There’s another advantage that needs to be addressed. The Internet, specifically, the online press. The critical TV landscape changed when some sites, like the now defunct Television Without Pity, began recapping shows that aired the night before. Those recaps started out as funny jibes (the recaps of Survivor on TWP were freakin’ hilarious) but have now become serious journalism.

Any website that covers TV in some fashion now has re-cappers – and that includes The New York Times.

While those re-cappers do write about the streaming shows from Netflix, Hulu and Amazon (AV Club is probably the most robust of them all), it’s what has aired to the nation the night before that gets the most ink and attention. There’s a different immediacy when recapping the day after most viewers have watched that program.

In the age of Peak TV (or, as Hollywood Reporter critic Tim Goodman rephrased it, “Too Much TV”), generating that kind of chatter and momentum puts you in the current zeitgeist. Google how many sites are still trying to find ways to recap Game of Thrones weeks after the last episode of Season 6 and you’ll get my point.

The premium channels

The dominant premium channels are HBO and Showtime, with subsets also succeeding (Cinemax, owned by HBO, and Starz). Their advantage is that they are compensated directly from the cable subscriber, a kind of Netflix with a middle man (the cable system) and a regular programming lineup.

Considering what we have examined before, premium channels would seem to have the best of both worlds. You have subscribers (like Netflix, Hulu and Amazon). You have the advantages of being on air (like FX and AMC). And, in the case of HBO, you also have a standalone streaming service available without a cable subscription.

The HBO model is the best in the industry, but you’ve got to wonder. In this era of Peak TV, does the future of HBO really look that bright?

I’d say yes because HBO built its business on the shoulders of the best brand in the business. “It’s Not TV. It’s HBO” was brilliant. It was a stronger version of AMC’s “Stories Matter Here” because it more clearly explained that HBO was different and better.

HBOIt also gave the network brand permission to do anything. It could do drama, comedy, documentary (it has the best documentary division on TV), comedy specials and movies. HBO is so good at branding that its theme for HBO GO, “It’s HBO. Anywhere” speaks to the control issue that streaming currently owns.

HBO has a model to follow, but there is another issue to consider.

The relationship between content and brand

As part of our brand relaunch process, we do a brand audit. This exercise looks at everything the brand does, both physically and emotionally, so we can be sure the brand can fulfill the promise. One of the values we examine is brand-product relationships. Do the products themselves follow the brand?

Brand AuditFor example, if the brand promise is about simplicity, do the products of the brand make things simpler for its customers? If they don’t, we tell the company that they shouldn’t create that product because the brand will become less believable. Do it only if it fulfills the promise.

How do the current networks stack up?

The interesting one for me here is AMC. “Story Matters Here” has directed the network to develop a menu of tough, interesting dramas. They may be of varied quality, but there’s no doubt that Preacher, Hell on Wheels, The Walking Dead, Better Call Saul, The Night Manager and Turn came from the same network. That’s not say they have the same style or storytelling angle, but that they fulfill the brand promise.

It’s when they networks away from their promise (if they even have one) when they struggle. For example, what does A&E stand for? Who is the A&E viewer? A&E stands for Arts & Entertainment, although the network has long dropped that association.

It has the successful Duck Dynasty (although it’s not as successful as it once was), but its lineup is littered with The Wahlburgers, Escaping Polygamy, Storage Wars and Bates Motel. The problem A&E has is that it doesn’t have a brand promise that can direct its programming. With that lineup, I don’t even know what that promise would be. This is a network in dire need of a rebrand.

Apple TV

Here’s what we know. Streaming networks have given back control to the viewer and probably started Peak TV in the process. Sophistication is in (even in comedy). And having a brand promise that is fulfilled by your programming is the road to success.

Visibility and preference win the day.

In reality, the way to create a successful network is the same process in creating a successful brand. You find the value that has the highest emotional intensity in the market (through quantitative research) and align your brand with that intensity.

The streaming services have done so well because their own models are aligned with a belief that had been increasing in intensity ever since Apple introduced the iPod: I believe things turn out better when I’m in control. That intensity has gotten stronger in the era of Peak TV.

The one thing missing in the TV landscape is a focused brand promise that is clearly stated and differentiating. Even with the positions of HBO and AMC standing tall, no one has clearly stated who the viewer is when they are watching that network.

Let’s make an assumption. Let’s pretend quantitative research demonstrated that the highest emotional intensity among viewers was the difficulty that FX President John Landgraf stated. That Peak TV means there’s too much good TV.

So how does Apple TV (or something like it) capitalize and align itself with that belief? Since we’ve been waiting years for Apple to fulfill the deathbed promise of Steve Jobs that he had “figured out TV,” we’re going to state what Apple TV should be.

It should be a portal that allows you to build your own network. Apple collects all the access to your channels and develops your own, customized network where you add shows and requests in one place. I’m not just talking about shows that appear on your cable system. It would include Netflix, Amazon and Hulu. That is, you would build your network with streaming networks, cable networks, premium channels and broadcast networks combined into one portal.

This may sound like something similar to a DVR, but not if you had the ability to have one search engine, program your networks, categorize your shows and, mostly importantly, see yourself in the brand itself.

You simply tell Apple TV (through Siri, I imagine) what you want to watch now and in the future, and it pulls it up in an interface that you control and program.

Apple CEO Tim Cook said the future of TV is apps. It’s in simplicity because right now (according to our imaginary research) viewers are overwhelmed with choices and have no easy way to navigate it all from all the sources at their disposal.

Our brand promise is that we make Peak TV watching simple because it’s the smart thing to do.

We have a brand promise and have given control to the viewer. It’s a demonstration of the way to win in today’s current TV landscape: To have a clearly defined brand. Without it, you are A&E.

In a way, I think that’s the problem the broadcast networks are having. The definitions of what describes NBC over CBS or any of the others are blurred, and often defined by on-air personalities. CBS probably has the best brand in the market but that’s mostly because it has procedurals that have many variations (such as the CSI and Law & Order series) and appeal to an older demographic.

Hannibal
The Peak TV show that got away.

We leave you with this. The most interesting broadcast network TV show of the last decade was Hannibal, a dreamlike expression of evil that was gorgeous and disturbing – and canceled after two seasons. It should have been a gigantic hit. But it aired on NBC and nothing about NBC’s brand gave it permission to run Hannibal. Viewers, therefore, were sure that Hannibal was a failure without seeing a frame of it.

If Hannibal had been on AMC, FX or HBO, I believe it would have been a smash.

Brand is the key to success for any business. It’s just as important in Landgraf’s Peak TV.

Xiaomi phones are coming to America

Xiaomi, the Chinese smartphone maker, just announced that it has acquired a few patents from Microsoft as it prepares to enter the US market for the first time.

Xiaomi
Obstacles await the entrance of Xiaomi phones in the US.

In case you missed it, Microsoft announced last month that it was exiting the smartphone business, which all but kills Nokia phones for good – an acquisition that cost Microsoft north of $7 billion.

This new effort by Xiaomi is an attempt to both siphon any remaining value out of the Microsoft patents as well as stave off some potential patent infringement in the US. Remember, some Chinese companies don’t always play by the same rules as everyone else when it comes to patents and intellectual property.

The deal also allows some Xiaomi devices to come preinstalled with Microsoft’s office apps.

Is the time right for a Xiaomi phone in the US?

For Xiaomi, it’s as good of a time as any to enter the US market considering the recent sluggish sales performance of the iPhone. But the reality here is that the US market has two entrenched brands with very loyal consumers already: Apple and Samsung. Breaking into the US market, especially with a phone that’s been called an iPhone clone, is going to be exceptionally difficult if not impossible.

I can’t go so far as to say it can’t be done. But let’s take a look at the power of brand in the smart phone category. In 2015, Apple, Samsung and LG accounted for a shade under 94% of the US smart phone market sales. (This is even with a powerful brand like Google, which owns Android, in the market.) Now Xiaomi, a Chinese brand with all that baggage for the US market, will try to break through.

The only possible way Xiaomi can break in is with its brand – it will have to mean something more than the brands of Samsung and Apple, more than the Galaxy and iPhone. It won’t be able to get more distribution than Samsung and Apple. It may be a lower priced option but that could only mean cheap. Even though some of Xiaomi’s devices will have some features and performance advantages, they’ll pale in comparison to the consumer loyalty enjoyed by Samsung and Apple.

Good luck, Xiaomi. You are going to need it. But if you don’t want to rely just on your luck, give me a call.