January 2013 – Testing

The Model T iPhone

I distinctly recall seeing for the first time—this
goes way back, kids—something on a car dashboard that wasn’t your basic
odometer, or gas tank indicator, or engine light or battery gauge: it was a
little outline of the car doors, with lights that went on when a door was open.

It seemed, at the time, extremely silly—sort
of like when somebody first stuck a camera on a cell phone—because, after all,
who needed to know when a door was open?
Turned out young parents did. They loved it because they never had to worry about whether their toddler or car seat-strapped baby was going to fall out. And it helped sell cars.

That feature happened to be on a Subaru,
and while it seems quaint given that nowadays you can see almost anything on
your dashboard except the future, it was very near the beginning of the
Japanese assault on the US car industry.

And those little door lights came to mind
while listening to the Apple call last night—specifically, when the subject of
the iPhone’s screen size, which is one reason the iPhone is losing share to
Samsung’s large-screen Galaxy, came up.

Asked by one of Wall Street’s Finest whether
“there’s a long term case for a larger screen size?” Tim Cook said:

The iPhone 5 offers,
as you know, a new 4-inch Retina display, which is the most advanced display in
the industry, and no one comes close to matching the level of quality as the
Retina display. It also provides a larger screen size for iPhone customers
without sacrificing the one-handed ease of use that our customers love. So
we’ve put a lot of thinking into screen size, and believe we picked the right
one.

In other words, he said, “We don’t think so.”

Now that’s perfectly fine. Since joining Apple, and well before he even became
Steve Jobs’ successor, Cook’s been helping bring about a revolution in the way
millions of people go about their lives every day. So who’s to argue with Tim Cook?

But it called to mind Henry Ford, who likewise
brought about a revolution in the way millions of human beings went about their
lives nearly a century ago, when he offered his Model T in “any color so long
as it is black.”

Because, at some point, people want something different.

Jeff Matthews

Author “Warren Buffett’s Successor: Who It Is And Why It Matters”

(eBooks on Investing, 2013) $2.99
Kindle Version at Amazon.com

The
content contained in this blog represents only the opinions of Mr.
Matthews. Mr. Matthews also acts as an
advisor and clients advised by Mr. Matthews may hold either long or short
positions in securities of various companies discussed in the blog based upon
Mr. Matthews’ recommendations. This
commentary in no way constitutes investment advice, and should never be relied
on in making an investment decision, ever.
Also, this blog is not a solicitation of business by Mr. Matthews: all
inquiries will be ignored. And if you
think Mr. Matthews is kidding about that, he is not. The content herein is intended solely for the
entertainment of the reader, and the author.

The Most Interesting Comment We’ve Heard All Day

Verizon had their earnings call this
morning. And since they sell a lot of
iPhones (among other things), it was worth listening to for a whole host of
reasons—not least of which was to hear whether the issue of cell phone
subsidies would come up.

Low and behold, it did:

Now having said that, on the subsidy side of the
house, you can see that the price of the handsets continued to decline. We now
have the Windows platform in our mix, and we saw some steady, albeit slow,
increase in some of the uptake of that platform. But as we get more and more
platforms in the mix — and now we have RIM out there again — there is going
to the incremental competition, there will be subsidy reduction, as there was
in the basic phone history in the ecosystem.

—Verizon CFO Frank Shammo, January 19, 2013

There. They said it.

Jeff Matthews

Author “Secrets in Plain Sight: Business and Investing Secrets of Warren
Buffett”

(eBooks on Investing, 2012)
Available now at Amazon.com