Fortune’s Seth Weintraub calls Steve Jobs a liar, predicts Android tablets will sell
March 4th, 2011
Daniel Eran Dilger
Not everyone respects Apple’s chief executive Steve Jobs. Just ask Seth Weintraub, who blogs about Google for Fortune, often by blogging his seething contempt for Apple and everything how it builds and sells its products. Following the company’s iPad 2 event, Weintraub accused Jobs of lying about components, lying about tablet market competitors, lying about market share, and lying about pricing.
Weintraub has a limited grasp of the tech industry, having worked as an IT manager for 15 years before becoming a full time pundit. In 2008, he teased out the “rebriculous” idea that Apple would be cutting MacBooks from metal using lasers, apparently unaware of how milling machines (and the laws of physics) work.
Last year, he tried to foment outrage that Apple was holding AT&T back from adopting Android as part of a conspiracy to keep the masses from buying Android phones. A year later, Verizon is now selling the iPhone, having decided that Android isn’t exactly as cool as Weintraub thinks, at least for the purposes of attracting subscribers.
Weintraub was also a leading proponent of Death Grip hysteria, and he called Jobs’ predictions last fall about the coming failure of 7 inch tablets “the most laughable comment” back in October before the market for those devices actually plummeted, leaving Samsung with unsold inventory and vast numbers of returns from unsatisfied customers.
Twisted facts to convince crowds
Addressing Jobs’ surprise appearance at the iPad 2 event, Weintraub claims Apple “twisted facts and used an erroneous quotation to try to convince crowds that all other tablets had no shot at de-throning the iPad in 2011.”
His first accusation was that Jobs’ comment that the A5-powered iPad 2 will be “the first dual core tablet to ship in volume” was a lie, because Weintraub had “tested a Dell Streak 7 which had a dual core Nvidia Tegra 2 chip in January. They’ve been shipping ever since on T-Mobile. In volume.”
Really? Volume suggests substantial numbers. Surely if Dell were selling any meaningful amount of Streaks, it would be crowing about it to regain some relevance in the post-PC era, at a time when Gartner is bending over backward to call the iPad a tablet just to create the suggestion that there are other tablets being sold . But Dell isn’t crowing about volume sales of the Streak because it isn’t happening. How do we know? Because T-Mobile isn’t selling anything. It’s losing subscribers faster than Motorola on Verizon.
Weintraub also claims the new Motorola Xoom “is certainly shipping in volume as well,” before changing the subject to the Atrix and LG Optimix 2X smartphones, both of which do use dual core chips, but which, notably, aren’t tablets. The fact that all these are on sale, Weintraub would have the crowds believe, is proof that the iPad 2 won’t be the first dual core tablet to ship in volume.
Of course Jobs probably had in mind the real world when he spoke, rather than the vaporous marketing nonsense Android licensees waft up Weintraubs’ nether regions. As someone who hasn’t ever designed, built, shipped, marketed or sold a consumer electronics product, Weintraub seems to possess a rather weak grasp of what words like “ship” and “volume” mean, particularly in the context of Apple’s blockbuster sales.
This basic ignorance is reflected in Weintraub’s next attack on Jobs, which involved Apple’s quote of a Samsung executive admitting that the company’s sell-in (inventory stacking) and sell-out (sales to consumers) of the Galaxy Tab were not really in the same universe.
After first being quoted as describing its sell-out to analysts as “quite small,” Samsung scrambled to maintain that no, it really meant its sales were “quite smooth,” although it wouldn’t say what percentage of the 2 million units it dumped in the channel were actually bought by customers.
Whether the word was small or smooth doesn’t matter, because the obvious point Jobs was making was that Samsung isn’t successfully selling the Galaxy Tab. Instead, just as Jobs predicted last fall (even as Weintraub mocked him for doing so), Samsung and Dell are now scrambling to bring full sized tablets to market, leaving their early adopter 7 inch tweener tablet customers abandoned with no upgrade roadmap. Jobs was right, and Weintraub’s arrogant laughter turned around to make him look as ignorant, foolish and out of touch with what people want as the executives from companies with failing PC-era tablets that Weintraub flatters with incessant praise.
That makes one wonder, does Weintraub even understand that he is carefully documenting his own ignorance and faulty vision even as he tries to portray Jobs as a fraudulent trickster rather than the tech world’s brightest luminary of whom the entire industry is intently listening to as they frantically try to ape his every move?
Or is Weintraub just a method actor rehearsing the role of playing John Dvorak or Paul Thurrot in a made for TV movie about self-important PC era pundits?
Weintraub next attacked Jobs bullet point of “>90% market share” among tablets in 2010, claiming that the 2 million Galaxy Tabs Samsung dumped into the global channel should lower Apple’s share substantially. Of course, outside of Gartner and other flack-fact groups, “market share” refers to a share of the market, not a share of retailer’s inventory.
At the end of 2010, both Apple and Samsung had a channel inventory of about two million tablets. The difference was that Apple had actually sold well above ten million iPads, while Samsung had only been “quite smooth” in pushing a few tweener tablets to early adopters before killing its future upgrade path after just a few months.
Weintraub also took issue with the fact that Apple had been selling iPads for three quarters, while Samsung hadn’t gotten its product to market till the winter quarter. Apparently in his mind, the numbers should be distorted and weighted to make things appear more ‘fair and balanced,’ despite the reality that IDC reported Apple’s market share among tablets at 87.4% in the third quarter, after selling more than 90% in the second.
After disputing Apple’s numbers, Weintraub wrote, “That’s not including all of the Android-powered Nooks out there, those cheap $100 Androids you can buy at Walgreens or Amazon and even Windows-powered Tablet PCs. If you choose to include the Kindle, Apple may not have even reached 50% of the market.”
Actually we know, again by citing real figures from iDC, that even when adding up all the ebook readers (which are clearly not tablet computers) including those garbage Pantech toys that can’t do anything apart from claiming to run Android, that Apple still had 58.7% of the global market for anything even resembling a tablet.
However, if the point of market share is really to determine relevant sales that provide an accurate picture of what’s being sold and by whom, then this toy/ebook/tweener/tablet market should also include the iPod touch, which is far more powerful than most tweener tablets and far more sophisticated than the Pantech instant ewaste Weintraub is so excited to count. Those numbers give Apple a 79.6% share of the tablet-like market.
Where I went to school, 79.6% is a lot closer to Jobs’ >90% than to Weintraub’s <50%. The point is not to stage a fanciful pissing contest, but rather to establish that Apple currently owns the tablet market. This isn’t controversial. It’s not a trick that requires fudging market boundaries or making up numbers or counting unsold inventory. It’s a fact.
Everyone else is dropping their pre-iPad plans to try to copy the iPad to get some sliver of Apple’s sales. But Apple clearly has a >90% lock on the valuable end of the tablet market. Counting a bunch of inventory fad-trash dumped into the market (but not actually selling, generating profits, building a platform or supporting development) to generate a false picture of “market share” is the dishonest, twisting distortion that Weintraub hypocritically rails about.
Why does Weintraub hate the truth? And why does he resort to Sarah Palin-esque AOL chat language in trying to present his attack on the president of Silicon Valley? Perhaps when Wientraub complains about Apple “twisting facts to convince crowds,” he’s just projecting his own desperate efforts to represent reality with the fidelity of a funhouse mirror.
The price is right
Weintraub was also troubled that Jobs alluded to the Xoom as costing more than 7 out of 8 of all the new iPad 2 models, pointing out that the Xoom has “a much better, bigger” screen (it actually has a wider aspect ratio with a slight resolution bump few users will notice, but lacks the iPS quality of the iPad and it picks up fingerprints faster), “far superior cameras” (because tablets are primarily used to take photos, apparently), 4G, a card reader and more RAM.
This is why users will happily pay a $80 premium over the iPad 2 for Motorola’s first generation Xoom Honeycomb tablet despite its paucity of apps, beta-quality Google operating system software (including non-functional Adobe Flash), and more weight (a third of a pound more) and thickness (its 50% thicker). Never mind that Apple also offers a $399 iPad and that the iPad 2 starts at $499. Everyone I know would rather pay $300 more for all that Droid-like masculine heft and bragging rights to RAM.
Taking a break from the nonsense land of Weintraub’s affection for Android, it’s interesting to note that flash storage was once the primary selling point for new iPods. With iOS 4.3′s Home Sharing, Apple is making it easier to get by with less flash storage, making cheaper iPads more attractive. Motorola can’t do that, because it doesn’t have a lower end tablet model to sell. And if it did try to offer a 16GB model, it would have to take a big hit against margins. The reason why Motorola is starting out at $800 is because it lacks the market volume to sell anything cheaper.
Who wants to bet Apple is making more money on the iPad 2 than Motorola is on each Xoom it sells, given Apple’s vast economies of scale in having already sold more than 15 million iPads and 150 million smartphones? Motorola had one good year of smartphone sales with Verizon’s Droid campaign, a brief flirtation with profitability that its unlikely to sustain in the era of the Verizon iPhone and the overpriced Xoom (not to mention that $500 docking Folio tied to the Atrix).
But wait, Weintraub claimed, “Perhaps Jobs could have also compared the iPad 2 to other Android tablets’ prices? Samsung’s Galaxy Tab and Dell’s Streak both now start at $499 and have better cameras, 3G radios and GPS, which seem to compete well with Apple’s $499 Wifi-only offering. Reality distorted.”
They ‘seem to compete’? In what Universe? Weintraub is again banging the drum of 7 inch tweeners as if his song and dance hasn’t already been gonged off the stage months ago. Who, apart from pundit ninnies, is digging the tablet toys from Dell and Samsung? They have no real software and are about as useful as those Pantech LCD picture frames they sell at Walgreens and Bed Bath and Beyond. Were they actually selling, Apple would be the one in a tailspin, rushing a 7 inch iPad to market accompanied by blustering marketing, instead of things being the other way around.
“I have a lot of respect for Steve Jobs and Apple’s products,” Weintraub wafts up his readers’ nether regions. “It’s just a shame that all the truth-bending destroys the keynotes.” He also repeated another mention of “Kool-Aid,” a Godwin-like allusion to a cult-indoctrinated murder-suicide that killed 918 people manipulated by Jim Jones in 1978.
Somehow I have a hard time understanding how you can respect a person while comparing him to a mass murder and repeatedly suggesting he is using deceptive marketing to fool the market into loving his products. Is there something in iPad 2 that will kill us all? Or is Weintraub just using egregiously emotionalized language to foment hate and fear about certain technology products in an ideological battle to give away an American invention to an adware monoculture supporting incompetent companies that can’t compete?