Roger McNamee, managing director at Elevation Partners, spoke with Bloomberg West anchor Emily Chang from Bloomberg’s Next Big Thing conference taking place at the Ritz Carlton in Half Moon Bay, CA today.
McNamee said, “Apple is caught in a classic innovator’s dilemma. They are doing the same things now that they were doing five years ago and the difference was five years ago they were creating the smartphone market as we know it today.”
He also said that Apple needs to be “thinking about a much more customer-focused approach to it. What is not happening? Automation is not happening. You know where I am, you know what time it is, you have my calendar. Automate my life for me…I would like to start with the Internet of me…”
McNamee on Apple’s iOS 7:
“We’ll have to see how customers react, but in my mind Apple is caught in a classic innovator’s dilemma. They are doing the same things now that they were doing five years ago and the difference was five years ago they were creating the smartphone market as we know it today. And now, their product has been so successful that customers need them to something different. They still think that they need to be hunters of the next hot product. For me and for most people who use iOS — iOS is so pervasive. It’s like electricity in your house. It is a utility. What I need them to do is to make the utility to do more things. I do not need them to make a new interface for iTunes or any of the apps.”
On whether he needs an iWatch or Apple TV:
“I don’t know. Maybe somebody does. I don’t happen to. That is not what I am worried about. I am fine with them doing new hardware. Back to iOS, it really is about iCloud now. It’s about putting context into everything you do so that instead of me having to ask for directions, traffic, look up Wikipedias on people are going to see, what Apple should be taking my calendar each night, populating it with all the information I need for the next day, and updating it in real time as I get to each new thing. And the way their operating systems are architected, it is easy to do that. For Android, they can do it, but it would have to be all Google to work there.”
On what one thing he would say to Tim Cook:
“I’d say to Tim Cook, look at the lesson of the Chicago Bulls after Michael Jordan left. You need a different kind of team. I would only say this to Tim Cook because I do think the challenge that they have is that they have the greatest hunters in history. Now they need farmers. Tim Cook is a farmer. Farmers are people who are very focused on delivering perfection through a process. They are not looking for the glitzy great new product and I think Apple can produce great hardware without the same Steve Jobs mentality they have. But they need to be thinking about a much more customer-focused approach to it. What is not happening? Automation is not happening. You know where I am, you know what time it is, you have my calendar. Automate my life for me.”
“I am saying just take the stuff out of my calendar and go and grab the free stuff on the internet that I would have to go and get myself and just do it for me automatically…I would like to start with the internet of me which is help me automate my life. Right now I have to direct everything I have to do on the internet. That is ridiculous. In iOS that is no longer necessary. In Android, they will be able to get there eventually. But right now, because they don’t control the other operating system in your life–whether it’s the Mac OS or Windows–Google does not have the ability to get your personal information quite the same way.”
On whether Samsung’s diversification gives Android or Google an edge:
“It gives them a different opportunity. What Google has done which is both very cynical and incredibly clever, is they have worked to commoditize absolutely everything about that operating system so that it does go into everything. The good news from that is obviously if you want an operating system you can get that one for free. The bad news is there is no one watching the store to make sure that you have a consistent, great user experience, so it operated as a pretty low level. As a result, like Windows, we are going to be stuck for a long time with the stuff we have now. We may get fancier hardware, but the experience is not going to change much.”
On the implications of Samsung essentially owning Android:
“That is potentially a positive because Samsung can now do the things that I wish Apple would do on top of Android because they’ve got the whole system. And I hope they do that.”
On what should be the next big thing out of Samsung:
“If I were Samsung, I would be asking the very simple question: How do I become as good at making software that makes customers successful as I am at making semiconductors and flat panel displays and phones? They are the world’s best at high-volume consumer electronics manufacturing for a lot of the components that go into it, but software is not historically been a strength.”
On whether Samsung is far ahead of anything else with its Smart TV:
“The way I look at it is none of that really matters if there is nothing to do with the Smart TV. The trick is how do you get interesting stuff onto it. I have a little investment in a company called Player that makes a device this big and lets you get anything off of your phone or off of your computer onto your big flat panel TV. Until they solve that problem then having a Smart TV does not mean anything because you can’t plug anything into it. To me, that is a problem that will be solved very quickly, but how do you get stuff onto it? That’s the trick.”
On how he sees the Apple/Samsung competition play out over 5 or 10 years:
“I have no idea. I look at this and I go, a year ago, it never occurred to me that Apple would have the problem it is having right now. I really thought that they understood that they had differentiated themselves from Android, and that their optimal strategy was different than Android’s optimal strategy. At the beginning I never understood why Android went around apps because apps reinforced Apple’s strength. Android is about the web. To me, I don’t understand why Google isn’t all over HTML5 because that would really hurt Apple. I look at everybody having more problems than benefits right now. To me it looks like the Keystone cops–guys who did not understand their customers, do not understand the use cases because they are changing. When these products came out you had to convince people. Now everybody is totally convinced and they are begging for different classes of things and the vendors are not listening. They are still trying to go after the 10% of the market that has not bought a smartphone yet.
On Google’s purchase of Waze:
“It’s a search engine, right? What I would rather have, in a perfect world, is Google has not shown itself to be a particularly careful shepherd of personal data. So I am personally cautious on using some of their apps simply because I don’t like the experience that comes with Gmail. I don’t want to sit there and say I am going to Boston and then suddenly get a bunch of ads for hotels in Boston. That is very creepy to me. I would rather work with somebody who isn’t quite so commercial with my ideas. I think Waze is a great move for them. It’s a cool product. People really love it. It fits into Google like a hand in a glove. Google’s situation is great. I wish they had done Android differently because I think there was a bigger opportunity than the one they did. But the one they did is humongous. As long as they can get somebody besides Samsung to be successful in phones, then I think Android’s future is bright. If it’s just Samsung, it is over.”
Interview transcript credit: BLOOMBERG WEST
