Apple has reported a record sales slump, while Samsung’s latest phones win market approval. How did it come to this? ARTHUR GOLDSTUCK tells the tale.
What’s wrong with this picture? Global smartphone sales down 3%, Samsung sales down 4%, Apple iPhone sales down 16%.
Or this one? Samsung revenue up 6% and profit up 12%, Apple revenue down 13% and profit down 23%.
For one thing, Samsung is tracking global trends in smartphone shipments, which is hardly wonderful news for a brand that wants to run ahead of the market. But, for another thing, Apple has lost the magic sauce.
One could be sympathetic and believe CEO Tim Cook when he blames a tough “macroeconomic environment”. But, during the worst financial slump in living memory, the big bad Global Financial Crisis of 2008-2009, Apple not only held its own; it kept growing, quarter after quarter.
The iPhone had been launched in 2007, and kept getting better, allowing the company to outperform not only the market, but also all forecasts. It kept breaking through every barrier, eventually helping Apple rack up 13 years of continual growth that had begun with the launch of the first iPod. That is 51 quarters, of which around 8 had seen the destruction of entire national economies across the globe.
Tough macroeconomic environment? Apple used to trample on tough macroeconomic environments. Rather, try tough competitive environment. In the growing Chinese market, iPhone sales slumped 26%. Meanwhile, Chinese brands like Huawei, Oppo, and Xiaomi hungrily took global markets from their respective positions as the world’s 3rd , 4th and 5th biggest smartphone brands.
Which brings us to the Samsung Galaxy S7. It marks four out of the last five Samsung devices flagship phones that have no longer been part of the catch-up game with Apple. Back in 2012, The S3 was the best that Android could offer at the time, but also for the first time showed that someone else also gets what a smartphone should be. Still, it was considered a Cinderella, a poor copy of the finery invented by Apple for the iPhone ball.
Apple stuck doggedly to its finery: a form factor premised on a mantra that the world was satisfied with a 4” display. At 4.8”, the S3 was already pulling away. However, the iPhone 4S, still enjoying the Steve Jobs halo effect, easily kept up.
In 2013, the Samsung Galaxy S4 truly disrupted the ball, offering a phone as close to perfect as the technology of the time allowed. It overreached with some features, like gesture control. But compared to its peer, the iPhone 5, it was a breath of fresh air, with a 5” display, 50% more power than the iPhone, and a camera that for the first time gave Apple a run for its money.
It gave Samsung undisputed leadership of the smartphone market. Along with the Note series, which introduced the phablet format and proved a voracious market appetite for even bigger displays, the S4 would prove to be a wake-up call at Apple’s Cupertino HQ.
However, Apple pushed the snooze button a couple of times. Instead of coming to the party with a larger iPhone, it delivered the 5S and a youth-oriented 5C, with the same 4” display, but in multiple colours. Crucially, it fell short of market expectations that it would be a phone targeting lower-income users and emerging markets.
Luckily for Apple, the 2014 contestant from Samsung, the S5, was a rare miss-step, offering almost no good reason for anyone to move on from the previous edition. In effect, Samsung did an Apple, offering only incremental improvements.
Both brands then upped their game phenomenally, with Apple’s alarm finally penetrating its snooze late in 2014, and a wide-awake look in the mirror resulting in the iPhone 6 and 6 Plus – respectively 4.7” and 5.5” phones, targeting both the regular Samsung flagships and the Note phablet. Apple reported record sales.
Then, in 2015, came the Samsung Galaxy S6, with its beautiful curved screen Edge as well as a flat-screen option, and an absurdly good camera on both. Apple responded in time-honoured fashion later in the year, with a 6S and 6S Plus, delivering – surprise, surprise – only incremental improvements.
At he beginning of 2016 it followed with the cunning trick of cramming iPhone 6-like power into an iPhone 5-type body with 4” display and calling it the SE. Because, you know, the world is still hungry for 4” displays.
In contrast, the new Samsung S7 Edge pushes the curved device’s display from 5.1” to 5.5”, while the regular S7 keeps to 5.1”. Both have less powerful cameras but more powerful processors and more RAM, along with substantially bigger batteries. The larger phone increases battery life by up to 50% over its predecessor.
Samsung added one other feature that probably made the biggest contribution to its sales holding pattern: it dropped the recommended price by more than 20%.
In a market where the latest features are often not enough to persuade someone to upgrade, and where a good phone remains a good phone for several years, the ever-rising pricetags on flagship phones from the leading brands was bound to result in a backlash. That was probably the main reason the S6 and S6 Edge were sales disappointments, despite arguably being the best smartphones in the world.
Which brings up one of the less publicised numbers from the latest Apple results: gross profit margin, which is the real secret sauce of Apple’s astounding profits and its unprecedented $233-billion cash pile.
Gross profit margin for the last quarter was an eye-wateringly joyful 39.4%. However, that was down 40.8% for the same period the year before and from it being routinely above 40% in years before. Apple has offered guidance for the next quarter that it will fall yet again.
In the “macroeconomic environment” of increasingly thrifty customers, ferocious competitors and Samsung’s cutting edge devices, don’t expect it to begin rising again any time soon.
Why your first self-driving car ride will be in a robotaxi
Autonomous driving will take longer than we expect, and involve less ownership than the industry would like, writes Intel’s AMNON SHASHUA
As we all watch automakers and autonomous tech companies team up in various alliances, it’s natural to wonder about their significance and what the future will bring. Are we realizing that autonomous driving technology and its acceptance by society could take longer than expected? Is the cost of investing in such technology proving more than any single organization can sustain? Are these alliances driven by a need for regulation that will be accepted by governments and the public or for developing standards on which manufacturers can agree?
The answers are likely a bit of each, which makes it a timely opportunity to review the big picture and share our view of where Intel and Mobileye stand in this landscape.
Three Aspects to Auto-Tech-AI
There are three aspects to automotive-technology-artificial intelligence (auto-tech-AI) that are unfolding:
- Advanced driver-assistance systems (ADAS)
- Robotaxi ride-hailing as the future of mobility-as-a-service (MaaS)
- Series-production passenger car autonomy
With ADAS technologies, the driver remains in control while the system intervenes when necessary to prevent accidents. This is especially important as distracted driving grows unabated. Known as Levels 0-2 as defined by the Society of Automotive Engineers (SAE), ADAS promises to reduce the probability of an accident to infinitesimal levels. This critical phase of auto-tech-AI is well underway, with today’s penetration around 22%, a number expected to climb sharply to 75% by 2025.1
Meanwhile, the autonomous driving aspect of auto-tech-AI is coming in two phases: robotaxi MaaS and series-production passenger car autonomy. What has changed in the mindset of many companies, including much of the auto industry, is the realization that those two phases cannot proceed in parallel.
Series-production passenger car autonomy (SAE Levels 4-5) must wait until the robotaxi industry deploys and matures. This is due to three factors: cost, regulation and geographic scale. Getting all factors optimized simultaneously has proven too difficult to achieve in a single leap, and it is why many in the industry are contemplating the best path to achieve volume production. Many industry leaders are realizing it is possible to stagger the challenges if the deployment of fully autonomous vehicles (AVs) aims first at the robotaxi opportunity.
Cost: The cost of a self-driving system (SDS) with its cameras, radars, lidars and high-performance computing is in the tens of thousands of dollars and will remain so for the foreseeable future. This cost level is acceptable for a driverless ride-hailing service, but is simply too expensive for series-production passenger cars. The cost of SDS should be no more than a few thousand dollars – an order of magnitude lower than today’s costs – before such capability can find its way to series-production passenger cars.
Regulation: Regulation is an area that receives too little attention. Companies deep in the making of SDSs know that it is the stickiest issue. Beside the fact that laws for granting a license to drive are geared toward human drivers, there is the serious issue of how to balance safety and usefulness in a manner that is acceptable to society.
It will be easier to develop laws and regulations governing a fleet of robotaxis than for privately-owned vehicles. A fleet operator will receive a limited license per use case and per geographic region and will be subject to extensive reporting and back-office remote operation. In contrast, licensing such cars to private citizens will require a complete overhaul of the complex laws and regulations that currently govern vehicles and drivers.
The auto industry is gradually realising that autonomy must wait until regulation and technology reach equilibrium, and the best place to get this done is through the robotaxi phase.
Scale: The third factor, geographic scale, is mostly a challenge of creating high-definition maps with great detail and accuracy, and of keeping those maps continuously updated. The geographic scale is crucial for series-production driverless cars because they must necessarily operate “everywhere” to fulfil the promise of the self-driving revolution. Robotaxis can be confined to geofenced areas, which makes it possible to postpone the issue of scale until the maturity of the robotaxi industry.
When the factors of cost, regulation and scale are taken together, it is understandable why series-production passenger cars will not become possible until after the robotaxi phase.
As is increasingly apparent, the auto industry is gravitating towards greater emphasis on their Level 2 offerings. Enhanced ADAS – with drivers still in charge of the vehicle at all times – helps achieve many of the expected safety benefits of AVs without bumping into the regulatory, cost and scale challenges.
At the same time, automakers are solving for the regulatory, cost and scale challenges by embracing the emerging robotaxi MaaS industry. Once MaaS via robotaxi achieves traction and maturity, automakers will be ready for the next (and most transformative) phase of passenger car autonomy.
The Strategy for Autonomy
With all of this in mind, Intel and Mobileye are focused on the most efficient path to reach passenger car autonomy. It requires long-term planning, and for those who can sustain the large investments ahead, the rewards will be great. Our path forward relies on four focus areas:
- Continue at the forefront of ADAS development. Beyond the fact that ADAS is the core of life-saving technology, it allows us to validate the technological building blocks of autonomous vehicles via tens of new production programs a year with automakers that submit our technology to the most stringent safety testing. Our ADAS programs – more than 34 million vehicles on roads today – provide the financial “fuel” to sustain autonomous development activity for the long run.
- Design an SDS with a backbone of a camera-centric configuration. Building a robust system that can drive solely based on cameras allows us to pinpoint the critical safety segments for which we truly need redundancy from radars and lidars. This effort to avoid unnecessary over-engineering or “sensor overload” is key to keeping the cost low.
- Build on our Road Experience Management (REM)™ crowdsourced automatic high-definition map-making to address the scale issue. Through existing contracts with automakers, we at Mobileye expect to have more than 25 million cars sending road data by 2022.
- Tackle the regulatory issue through our Responsibility-Sensitive Safety (RSS) formal model of safe driving, which balances the usefulness and agility of the robotic driver with a safety model that complies with societal norms of careful driving.
At Intel and Mobileye, we are all-in on the global robotaxi opportunity. We are developing technology for the entire robotaxi experience – from hailing the ride on your phone, through powering the vehicle and monitoring the fleet. Our hands-on approach with as much of the process as possible enables us to maximize learnings from the robotaxi phase and be ready with the right solutions for automakers when the time is right for series-production passenger cars.
On the way, we will help our partners deliver on the life-saving safety revolution of ADAS. We are convinced this will be a powerful and historic example of the greatest value being realized on the journey.
Professor Amnon Shashua is senior vice president at Intel Corporation and president and chief executive officer of Mobileye, an Intel company.
Sea of Solitude represents mental health issues through gaming
It’s a game that provides a tasteful visual representation of mental health issues. BRYAN TURNER dives into the Sea of Solitude.
Disclaimer: This review is based on four hours of gameplay.
Sea of Solitude, the latest adventure game by Jo-Mei Games and EA Games, takes a sobering look at loneliness. It represents this loneliness visually, using light and dark environmental changes, as well as creatures players must encounter. The main character, Kay, must make it through the sea without finding herself trapped in a sea of loneliness. She meets fantastical creatures along her journey, and she must help them solve their challenges while keeping herself in a sane environment.
The game is systematic in the way it represents its important aspects. It starts with a striking visual art style and a soft storyline, which gives characters a chance to absorb the beauty of the game. As one gets a hang of the controls and used to the art style, the story kicks it up a few notches to reveal the harrowing backstories of the creatures that reside in the sea Kay must travel.
In particular, it features a creature that keeps flying away from Kay. This was frustrating because the previous chapter of the game presents a backstory for the creature that was not only devastating to the main character, but also to the player. Once Kay meets this creature, players must be ready to cry. It’s a brilliantly crafted story and hats off to Jo-Mei Games for being great storytellers.
Cornelia Geppert, CEO of Jo-Mei Games, told EA: “Sea of Solitude centres on the essence of loneliness and tugs on the heartstrings of its players by mirroring their own reality. It’s by far the most artistic and personal project I’ve ever created, written during a very emotional time in my life. Designing characters based on emotions was a deeply personal achievement for our team and we’re so excited for players to soon experience Kay’s powerful story of self-discovery and healing.”
Generally, I steer clear of games that are metaphors about mental health issues because they tend to be crass in how they address mental health. Sea of Solitude is quite different because of its level of relatability. Other games about mental health tend to be about a specific disorder that not many people experience, while loneliness is something that so many of us experience. Additionally, the representation of how loneliness affects Kay in the real world is sharp but tasteful. The combination of relatability and respectful representation is what makes the game’s story so brilliant.
Another great aspect of this game is the music scoring. It uses sound and the absence of sound very carefully to invoke the right feelings expected from players. The game wouldn’t be as good with the sound off and subtitles on, so future players are recommended to turn up the volume or put on headphones.
The game is long for an indie game, at around three or four hours of gameplay until the end is reached. Several sources say there is a hidden ending, so players can look out for that in a second playthrough.
The game’s story isn’t perfect, though. The eventual sameness of creature encounters is a little disappointing. This may be down to the expectation of being extremely devastated by all the stories of the creatures, especially when one is less than devastated by the subsequent stories. One of the most affecting creature stories was also presented at the beginning of the game, which set the bar very high for the rest of the creatures.
One creature, in particular, tries very hard to have the greatest emotional impact, but this comes across as blunt and dampens the meaning of what it was supposed to represent.
While I didn’t mind sharp representation, the perception of themes like bullying, estrangement, and suicidal thoughts may vary in appropriateness from player to player. Prospective players with existing painful mental health issues should consult gameplay videos, like the one below, before purchasing the game, to gauge appropriateness.
Overall, the game is incredible at connecting with what it is to be human and what it means to be lonely. Dealing with issues as physical creatures is a great touch, as the main character tends to resolve the problems of the creature by understanding what the problems mean.