Perezonomics
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Apple isn't the Next Blackberry

5/29/2016

 
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​So, is Apple going to go the way of Blackberry and be left in the dustbin of history? Quite doubtful. I actually agree with Marco Arment’s piece stating that if the market swings hard towards devices that lean heavily on intelligent assistance that Apple is in big trouble. But I’d also agree with anyone that stated that if our planet were to run out of water tomorrow that the human race faces extinction. The statement would be true, but I wouldn’t lose any sleep over it. 
My problem with Marco’s piece is that it takes small trends today and tries to extend them out on a 1:1 basis. Let’s say that it was 60 degrees at 8 in the morning and 80 degrees by noon. If you extend the temperature graph out to 8pm, then it should be 120 degrees by tonight, right? Of course not; you’re not accounting for other major shifts that will occur in tandem. 

I have the same problem with Wall Street analysts who seem to think that Tesla could own the automotive future.  They’re essentially saying that Toyota and Ford Motor Company could be in serious danger of becoming the next Blackberry if electric self-driving cars become what the public wants. They’re making the assumption that the shift to electric self-driving cars will happen with lightning speed while Toyota et al make no effort to go in that direction. In that unlikely scenario, then yes, Toyota would be in huge trouble. But in reality, the cost of new technology and the long life of automobiles will be high enough to ensure that there is a gradual migration. If Toyota sees that they need to go where the market is headed, they will have plenty of time to expend the resources necessary to get the job done. 

So I think any hysteria about Apple falling behind in intelligent assistance is way too premature. Artificial Intelligence is going to be a long hard road. Whether or not it ever becomes good enough to drive the market is a huge question mark. If the market does head in that direction, everyone will go there due to the natural pull of market forces.  Just like everyone dropped buttons for touch screens. Well, except for Blackberry. 

Artificial intelligence on my iPhone or Apple Watch seems just as difficult, if not more, than programming self-driving cars. After more than twenty years of marriage, my wife and I still misunderstand each other when communicating.  My wife told me yesterday that we needed to get some coffee. I wasn’t sure if she meant that we were out of coffee in the house and needed to go to the grocery store or if she wanted go to Starbucks for a few minutes of relaxation time, two situations that are almost the opposite of each other. 

One thing that the general press overlooked was that Marco couched his thesis on whether or not intelligent assistance becomes more than a novel curiosity outside of tech circles. This is definitely not a given. I don't care how much data Google has or how good their demo at the Google I/O looked, machines will never be better than people at assisting you. But for the sake of argument let’s say that after 20 years of untold spent labor and wealth Google was able to create the ultimate artificial intelligence that was just as good as a human being at understanding what you just said. You know what we’d have? A device that would misunderstand what you really want 20% of the time. People misunderstand one another all the time.  Other people can’t read your mind, and machines won’t be able to either, which is really what we want. Intelligent assistance is doomed to forever being like the weather report, immensely valuable but highly inaccurate. 

I once heard an axiom explaining why man will never achieve utopia along the lines of “man’s ability to do evil grows with his ability to do good”.  I’m going to coin another axiom right now. “Technology’s ability to break down and cause frustration grows with its ability to assist”. This means that the more complex our software becomes, the more prone to errors and inexplicable lapses it will be. I don’t think that intelligent assistance will be much more than a novel curiosity as long as it continues to let people down on a significant basis. And until it can read your mind, it will always be of limited value. You could make the case that this kind of intelligent assistance is more difficult than self-driving cars since the scope is so much wider. 

I don’t think that Tesla is going to be putting Toyota or Ford out of business, because I think the migration to electric vehicles will be a slow slog. Likewise, the whole world of intelligent assistance is so early in its infancy and will take so long to develop that even an unknown company that doesn’t even exist yet could someday own that space. 
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But companies generally do whatever it takes to survive. If the public starts to demand more intelligent assistance that learns from observing your daily habits, then so be it. Apple would need to either develop their own capabilities in house, buy a company, or consider partnering with Google more closely. 

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    Robert Perez

    Manufacturing and distribution analysis since 1993.

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