Apple is Smiling as They Watch Your No-iPhone-5 Temper Tantrum

Very few of Apple’s product introductions are breakthroughs from a pure technology standpoint. Anyone working in Microsoft, Google, Nokia or any one of a dozen other technology companies had seen everything in the first iPhone before Steve unveiled it. What they hadn’t seen before was a user experience that brought it all together in such an utterly useful and compelling way, with a marketing campaign that clearly focused on the benefits and retail distribution that is remarkably good at educating people about new product concepts.

That is Apple’s unique ability. Packaging of newness. Nailing user experience. Messaging it in a simple way. It is innovation, but UX and marketing and retail innovation more than technology innovation. Put differently, it is useful innovation.

But even Apple struggles to convey the significance of software innovation sans sexy new hardware. We human beings have not evolved as fast as the technology we have created and for most people, hardware is more impressive than software. Most of us have our thoughts grounded in the physical world, not in the abstract world of algorithms and data.

And before you think I’m talking about the naïve masses: I’m not. This is not about technical sophistication. I spent almost two decades — first in industrial R&D and later in consumer devices — working on very early stage projects. I have done countless presentations and demos. And no matter who the audience was, if I had an actual physical piece of hardware to show them, then I was an order of magnitude more likely to get funded. Even the most seasoned software executive couldn’t just “imagine what this would look like in a cool case instead of on my crappy hardware mockup with exposed wires.”

So here’s the reality that’s playing out after Apple’s announcement yesterday. No matter WHAT Apple introduces in their software — it could be living, self aware artificial intelligence — people will grumble if that new software is not built into a sexy new physical form factor.

They will blame Tim Cook (only months into the job) for the update being “incremental”. They will talk about Apple’s “fall from grace.” Some of these are emotional outbursts based on disappointment. Others are just attempts to find the most extreme or newsworthy hook. But all of these ridiculous points of view have one thing in common: they are only credible because we human beings still struggle to see software as “real”.

So why not just make the phone look new every time? There are many good reasons why you wouldn’t do that if you were Apple, and here are a few of them:

  • You don’t want to make current owners feel bad. They’re probably halfway through a two year contract. Even with the iPhone 4S in market, the 4 still feels new because it looks the same.
  • You don’t want to make potential owners skittish. Let’s say for argument’s sake that for most people will wait for a new model if the current model has less than a 3 month window remaining. If new models appear every year, then that is 25% of the cycle. If they appear every 2 years, then it is 12.5% of the cycle.
  • You want to maintain iconic status for the object. This is harder to do if it is changing frequently. The longer a product is in market, the more easily identifiable it becomes. If the iPhone looked new and different every month, our ability to see it “in the wild” would be the same as our ability to spot a Samsung phone in the wild.
  • You want to maximize margins. A big part of this is keeping the hardware constant, because the tiniest changes have massive cost implications. There is the (loss of) economies of scale in component procurement, the cost of redesign, the cost of retooling a production line, and the period of ironing out teething problems and “settling in” to a new product. These are the main costs, but there are many others. Even something as prosaic as having to change the product photography in every piece of marketing material is significant.
  • You are building suspense for the next form factor update. Frequent updates will undermine the impact of a new form factor. We’ll soon lose interest if Apple responds to our temper tantrums about no new form factor and starts to update the iPhone more frequently. After the first couple of 6-monthly form factor updates, we’ll be “Meh, another beautiful iPhone.”

It is a balancing act, and one that Apple is managing in a masterful way. They are not sitting in Cupertino worrying about the current wave of “no iPhone 5″ angst. They are embracing it, because they know that the wailing and gnashing of teeth is evidence that the iPhone is still the king of gadgets and everything is going according to plan.

None of this is to say that I didn’t want a new iPhone 5. And I hope it is coming soon. I am only human, after all.

See also: No iPhone 5 this Year? Suck it Up!