Painting a Picture

By the way, we don’t have pictures. We’ll use words to paint a picture because the picture we’ll paint with words is bigger than the picture being painted by those who see only a product and not a paradigm. If a picture is worth one thousand words, we’ll use one thousand five hundred words (or so) to paint an even bigger picture.

A Decade Ago

It was 10 years ago (or so) that Apple released the Public Beta of Mac OS X. Built on Unix and the creative work of the folks from NeXT (acquired by Apple in the trade that brought Steve Jobs back to the company and sent the existing Mac operating system to the minors), Mac OS X took center stage in Apple’s efforts to create a new and more modern user experience for Mac owners and spawned development of better, more stable and efficient software products to broaden the Mac’s consumer and enterprise appeal.

A Decade Later

In late 2009, Apple released Snow Leopard, a.k.a. Mac OS X 10.6. This was the seventh major release of OS X. By the way, counting Mac OS X 10.0 as the first release is how confusion enters the picture when counting the number of commercial releases of OS X. It’s the same issue that messes up the count when trying to determine decades, contrary to the method used in popular parlance.

Sharing common code with Snow Leopard is a derivative OS product now called iPhone OS and in its third commercial release (it was called OS X iPhone at one point in its development). By some estimates, up to 80 million iPhone OS–equipped devices (iPhone and iPod touch) have been sold since release through the end of December 2009.

While it’s impossible to determine how many Mac OS X–equipped computers are currently in use, Apple sold almost 10.4 million Macs in its last fiscal year and may have sold another 3 million Macs in the December quarter. In that same fiscal year, Apple sold over 20.7 million iPhones alone.

Paint by Numbers

We’re not talking about the kits for art hobbyists but about the picture being painted of Apple device sales. iPhone OS–equipped products have taken the world by storm. Ambitious estimates for current fiscal year iPhone shipments top 40 million units, while the iPod touch will increase its share of the 60 million (or so) iPod units that will be sold.

At the end of September, more than two billion iPhone OS apps had been downloaded from the iTunes Store. By the end of December, perhaps one billion more apps will have been downloaded. With well over 100,000 apps available for iPhone OS–equipped devices, developers continue to swarm to the iTunes Store, offering up new products and deals on terms that aren’t and won’t be matched elsewhere.

Consider for a moment the size of the iTunes gift card economy. The cards have become a popular holiday gift to be given and received. The cards lock recipients into the iTunes Store and help drive device sales, as well as assist in reducing Apple’s costs to sell everything from music to movies to apps, and quite soon (it’s rumored) electronic books and magazines.

Picture Puzzles

We’ve all sat around a table at one time or another to put puzzle pieces together. Usually we have an image on the box to guide in finding and placing pieces. For now, not all of the puzzle pieces are on the board, and an image of the completed puzzle is not yet available. Yet we can start at the edges and work our way inside.

Back to the Beginning

Apple, so the company claims:

Ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.

The above quote is taken from Apple’s press releases.

From the Beginning to the End

The fastest-growing segment of the PC market is netbooks. They are inexpensive, small in size, and limited in usability and functionality. The ascent of the netbook signals the decline of the PC.

Apple started the personal computer revolution and will soon end the era of the PC-centric paradigm. Apple was there at the beginning, and the company’s newest products will bring about its end. The PC as we know is quickly being replaced by personal computing devices designed specifically with the end-user in mind. Apple will not release a netbook due to the limitations of that product category. The company will release a product that does more with more and does more with less.

When Apple brought Mac OS X into development, the company had more than the Macintosh in mind. At its core, Mac OS X is designed to be versatile, scalable, and adaptable for a variety of products and uses.

We are about to witness a new revolution, not in personal computers, but in personal computing. A paradigm shift away from the PC and a shift to multiple personal computing devices built around the same OS (OS X) that work well independently and work even better when integrated with one another, all sharing access to the iTunes Store and services, such as MobileMe, provided by Apple.

From the End to the Beginning

It’s the end of the PC as we know it. It’s the beginning of the era of Apple’s personal computing devices. Later this month, Apple may release its latest offering in the new Apple product paradigm. It’s a tablet-shaped device. But less important than one new device is the extension of the iPhone OS to yet another device. These devices had their beginnings when Mac OS X was first spawned by the engineers from NeXT who took up shop at Apple.

Get the Picture?

There’s more to this story than can be captured in a photo or illustration of one more new device. It’s a picture of an expansive collection of digital devices that will change the way we work and live in ways far beyond what was imagined in the days of the first PCs. Device sales will dwarf the sales of PCs, and these devices will be found in almost every pocket of every person on the planet.

The Pretty Profit Picture

Obscuring the view of Apple’s profit picture is something called deferred revenue accounting. Because Apple defers revenue on the iPhone due to the company’s commitment to provide users with iPhone OS updates for free, not all revenue is reported when earned due to accounting rules. Those rules have now changed. Apple will soon begin reporting all revenue and earnings from iPhone sales in the periods in which the sales are realized and will no longer be deferred over the economic life of the phone. In Apple’s last fiscal year, removing the impact of deferred revenue accounting, Apple had revenue of over $40 billion and earnings of about $8.75 billion dollars. It’s possible, based on the pace of sales of Apple’s iPhone OS–equipped devices, that revenue could reach close to $60 billion this fiscal year.

I will be commenting regularly on Apple’s continuing success on my blog. I look forward to seeing you there as Apple’s profit picture becomes much more clear. I paint by numbers of a different kind and in colors not often seen in digital print.

The Personal Computing Experience

From its beginnings, ATPM has been less about computers and much more about how we use them. We begin this new decade (depending on how one counts the years) in much the same way we originally began publication—celebrating the ways in which we use computing devices to enhance our quality of life and communicate with those in the world around us. Join us this month and every month as we explore this new decade of personal computing devices and leave the PC behind.

Our January issue includes:

MacMuser: CoPilot Live

Mark Tennent tells a tale of the £27 CoPilot navigation application for iPhone in comparison to a £100+ dedicated GPS navigation device.

MacMuser: It Just Sits There Dribbling

Mark Tennent tries to send a large attachment—from a Dell computer running Windows XP.

How To: Additions to the Services Menu

Find out how to take advantage of your own additions to the Services Menu with help from this month’s How To from Sylvester Roque.

Desktop Pictures: Water in Motion

Delwin Finch, who loves macro photography, offers this month’s desktop wallpaper images which came from experimentation of water drops under low light conditions.

Out at Five

At Wieser Graphics, they’re feeling the economic crunch. Todd runs headlong into the digital vs. analog wall, but proves adept at translating marketing speak for his boss. His greatest achievement, however, may be…well. You’ll see.

Qaptain Qwerty

Lose twenty pounds, quit smoking, organize iPhoto with geotags and face recognition…are they not all Impossible Resolutions?

Review: Harmony 510 Universal Remote

While there are some minor nuisances and bumps in the setup and usage of the Harmony 510 remote, a little perseverance in setup and attentiveness is use renders the Harmony a great addition to my living room.

Review: Marketplace 1.2.2

Matthew Glidden looks into a lightweight, Mail-like interface to the classified ad bonanza that is Craigslist. Marketplace expands its bare-bones usability with a clean look, saved searches, and multi-region access.

Review: Ortelius 1.0.5

With Ortelius, making maps is an educational snap.

Review: U-Motion

A useful but flawed iPhone case for gym rats.

Review: U-Suit Folio Premium

A flip-style leather case comes to the iPhone but, like many iPod flip cases before it, the U-Suit Folio Premium is not without its flaws.