Apple reported truly astounding numbers for the quarter, with revenues up 82% and profits effectively doubling. The numbers beat the Street handily and sent Apple stocks trading after hours at over $400 per share. Apple’s upside was almost totally due to its iPhone/iPad products, with the Mac and iPod both underperforming estimates. Given the economic pressure of the summer the numbers are a tribute to Apple’s positioning and marketing of its iOS products.
They’re also a demonstration of the growing power of the consumer and the appliance. Apple’s total revenues are now approaching $30 billion. That’s approaching Cisco’s numbers, folks. It may explain why Chambers has been captivated by the consumer and appliance market, though the reorg this week makes it clear that he’s abandoned his hope there. Apple’s success also creates dramatic evidence of a shift of power. Even OTT giants like Google have to fear the Box, the device, and sustain a position in that space to protect their site incumbencies. Advertising is shifting more dramatically to mobile as it becomes clear that mobile ads can better engage a consumer because there’s a better chance the consumer is in a position to execute on an ad-induced whim or decision.
I think that it’s also becoming clear that mobility is going to have a major impact on the cloud. Because we have mobile broadband devices with us all the time, everywhere, we can build a dependence on what they can provide. That induces everyone on the services side to experiment with providing more and more useful things through the appliance conduit. Given that users of appliances aren’t really in a position to immerse themselves in an experience without being disconnected from their surroundings, that induces more “decision” and less “knowledge” in the focus of the stuff. Apps became popular largely because mobile users didn’t find direct web searching convenient.
The next logical step in mobility is a play on a marketing tagline from the cloud space; “contextual intelligence”. We all live on a timeline, with events around us creating behavioral and mood changes as we move through time and space. When your appliance is a window on your “real” world, it has to be accommodating to those shifts, and that means making all sorts of correlations between who you are, who your friends are, where you are, and what you and your friends are all doing at the moment. That’s the “context” of your moment, the situation that any ad or any request for information is linked to implicitly. I’d argue that the major goal of mobile services in the future is to gather and exploit contextual intelligence, to take hints from all of the influences on the user to make the most accurate possible interpretation of a given request.
Apple is not only enabling this revolution, it’s arguably driving it. Will iCloud embody contextual intelligence? We’ll see.