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It will be interesting to see how Apple will price the different editions of the Watch. We know the starting point of $349, and we will have additional points above them. I believe it will largely look like this:

The $499 for the Standard is quite likely, it is a very standard price point to cover. For the gold watch, we know that it will have a gold casing, but this casing will likely not weight more than 10g to 20g. Gold is currently $1250/oz, or $40/g, so the cost of the gold in the Watch will not exceed $500. Given the volatility of the gold price, Apple will charge a nice margin above that, so depending on the actual gold content we could have 1499 or 1999 as the starter price for the gold watch.

While we still await detailed information on the A8 chip, we know the core parameters: 28nm to 20nm shrink, 1.3GHz to 1.4GHz speed increase, 25% better performance, 50% better GPU performance. This amounts to the smallest update in CPU performance the iPhone has ever seen.

It used to be that a die shrink would enable higher frequencies at the same power level, according to Denard Scaling. So we would have expected a 40% increase in frequency, instead of the 8% we actually got. But this seems to no longer be possible, as also evidenced by the slow progress Intel is making. This means that we are now reaching a significant slowdown in Moore’s Law, so getting better performance will require a different approach. One will need to use the huge transistor budgets now available to create accelerators for bottleneck functions, instead of relying on CPUs to become faster to run the software at a sufficient pace. And it seems that is what Apple has done, with the following uses for the extra transistors:

• 6 instead of 4 GPU cores
• improved CPU, likely including larger caches
• specialized functions for camera and video processing
• Metal provides an interface to the GPU to offload hugely parallel workloads

One wonders what this will mean for the future, and I suspect it will help Apple, as you will need to integrate hardware and software to achieve optimal performance, and it makes Swift an important part of the future, as it allows you to squeeze more performance out of the hardware.

It also means that Intel will have a problem, as they can no longer count on their process prowess to help them overcome the efficiency problems caused by the dated x86 architecture. What they need to do is create a new architecture, optimize the silicon for it, and provide a secondary decoder for x86 that can effectively feed legacy programs to the hardware. This is not easy, but in the current age of billions of transistors, it is feasible to create a dual decoder, where one can power gate the one not in use.

One of the interesting aspects of the Apple Watch is the large number of customization options coming with it. This takes it close to fashion. In fashion markets there are two important aspects: timeliness and prestige. In general we have fast changing items, really cool, but superseded fast again. These tend to be relatively cheap: lot of throwaway stuff. And then there is timeless luxury. Especially high end watches are jewelry to show off your status, and we justify the high prices to ourselves by assuming that they will not quickly deprecate in value.

The inherent deprecation coming from technological progress limits the appeal as a luxury. I wonder how long the replacement cycle must become before we start to be willing to pay huge premiums for personalization. Cars can last for decades, especially high end ones taken good care of. And we probably still have a couple generations of miniaturization before us before quantum effects make progress too expensive. But Apple has made changing the straps dead simple, the insertion point is flat enough to fit into less thick variants in the future, so you could treat the strap as the jewelry, and the watch as replaceable.

This however does not look like the current Apple thinking, if you survey the current lineup. But if you recall the improvements to the iPhone over the years, it is faster, and has better connectivity and a better camera, but has otherwise remained essentially unchanged. With the display matching the physical limits of our eyes, and processing that can be relayed to the iPhone, the Watch could be much more stable, and settle into a long enough replacement cycle to support luxury.

An interesting presentation from Apple today. On the iPhone side, I was surprised that we no longer have a small 4" model to choose from. One handed operation has become more cumbersome than it used to be, and there are enough people out there with small enough hands to find 4.7" already on the large side. But this is something that we can only properly judge with the phone in our hands. But it could well mean that 5S sales will remain stronger than they used to be.

Even though Apple was doing its best to hide it, by basing the comparison on the first model, this was by far the smallest advance in computing power ever for the iPhone. A 25% increase in speed means that with desktop class performance comes also only desktop class performance improvement. Should this stay this way, and it is likely that it will, given all the problems Intel has in getting its 14nm process under control, then we will see the same lengthening of the replacement cycle coming from PCs to phones: 25% annually instead of 80% means we need now 5 years instead of 2 for the same improvement.

Payments could well be a much larger deal for the US than Europe, given the relatively archaic state of the US payments infrastructure. Given the high cost of an iPhone, Apple Pay would in Europe not be able to become the sole or cheapest way for a customer to pay (there must by law be a common, surcharge free option to pay, and iPhones are just not common enough to be that option), but together with Continuity it could become a great way to pay on the web.

The watch is nice, using fitness as the angle for people to start using it. What it’s true value will be, we will see. Notifications and universal access control token seem two promising options; I would have loved to have Touch ID as well on the device. As long as battery life is sufficient, it would seem to me that it will have low replacement cycles, with the option of deferring processing to the iPhone it necessary.

Apple have made some impressive improvements in ease of use with Swift, their new programming language. It breaks with the past, and they have followed a laudable design goal in making the language safe to use. Comparing it to C#, it still lacks a good deal of power: no exceptions, dynamic type system or an equivalent of LINQ. On the other hand, the new Playground is a good prototyping tool, and their rigerous commitment to keeping it a statically compiled language yields impressive performance which can only be good for power consumption on mobile devices. Personally I have the impression that it has removed a lot of syntactic cruft, the biggest improvement over Objective-C are generics. It still lacks some of the power, but it has captured most of the important stuff from C#.

With iCloud Drive, they now have a way to allow apps to work on the same document, but it feels like a bolt-on solution. Firstly it seems to be via the cloud only, which is pretty crazy for important documents where you cannot trust Apple thanks to National Security Letters. And then there is no solution in sight to group and organize documents from diverse applications.

Continuity is the answer to Microsofts All-In-One Windows 8, providing great interoperability of multiple devices optimized for their own job. I am curious how this is implemented and to which extend they will protect any data that needs to travel via the cloud.

With iPad sales y/y essentially flat, some people worry about iPad having plateaued, and no longer taking the world by storm. The basic worry behind this is that the iPad has become good enough, and so people will start to lengthen their replacement cycles, as they are doing now for PCs. But to which extend is this true?

As far as computing power is concerned, the A7 chip is already very close in performance per cycle and core to the latest Intel chips. This suggests that any further increases will have to come from using faster clocks, where we only have quite limited room to grow left. This leaves other attributes to provide desirable improvements.

The iPad would still benefit greatly from further weight reductions, as well as getting Touch ID, while the camera on the iPhone could do with some better low light ability. Also both would benefit from becoming more resistant to the elements, but otherwise I am at a loss what I would want to see improved. Now I did not see Touch ID coming, so there could still be positive surprises out there.

But I believe that people are already well served, and this will make them less likely to upgrade. For the carriers, the iPhone is already very good at generating photo and video traffic, and getting the customer a new model would no longer significantly increase his data usage. This leaves as a good reason for subsidizing a new phone increased spectrum efficiency, but carriers are still busy expanding LTE, and have not started on deploying a successor.

Apple depends mainly on two things to achieve huge margins in the iOS business:

• carrier subsidies allow them to price the iPhone $200 higher than otherwise possible, and effectively hide from the end user the huge margins of the iPhone

• pricing each doubling of flash capacity at $100 provides strong price discrimination

Both are only possible as long as iOS provides superior value compared to Android. But as can be seen with the Mac, Apple is perfectly capable of maintaining a value differentiation. Also Apple will rather sell you a quality product for a healthy margin that you will then replace less often, as it is an easy win-win: 35% every three years is better than 10% every two years, and it is better for the customer too, 270% instead of 330% over six years. Of course, this setup will not support 50% iPhone margins, which means a 100% profit markup.

To see when iOS becomes good enough, Europe will be the first market where carrier subsidies will come under pressure, since they have a single standard allowing you to keep your old phone when switching carriers.

When children unexpectedly run up huge in-app purchasing bills, a lot of people blame the parents, and not the real culprit, Apple:

• Caching credentials for ease of use is the default, so there is no way to learn about this dangerous behavior.

• Apple requires caching to be active when you want the convenience of updating your apps without entering your password.

• Even though caching can be convenient, I doubt that there are many people who intend to spend more than $10 this way. Being able to spend hundreds without any further confirmation is utterly unexpected.

Before blaming parents, one must understand that iOS customers are now mainstream, much less tech savvy than Mac customers used to be, and many were utterly unprepared for what could happen, and probably failed betrayed by Apple.

As I have said before, Apple benefits from these faults. And while I doubt these happen intentionally, at least not from the leadership, they better should hurry up fixing this.

I now believe the best fix would be to set a limit how much you can spend with a cached authentication, give it options of $0, $10, $20 and $50, and make $0 the default. In addition, Apple needs to understand that iTunes accounts are targets for fraud, including from store purchases, and improve their anti fraud measures so unusually high spending is caught before it becomes a problem.

Marco makes a good case how Apple will update the Macs to Retina. Assuming that we can live with a reduction in resolution similar to what we got with the MacBooks, where we went from 128 dpi to 2×110 dpi, we would need 108/128x110x2 or 186 dpi. I see the following options for new screens:

• 3840 x 2160, 24", 184 dpi

  Requires 11.124 GBit/s. This will be the only iMac size offered from now on.

• 4480×2520, 28", 184dpi

  Requires 15.141 GBit/s. This I hope will be the update for the Thunderbolt Display. It would have at least 2 GBit/s free to support Ethernet and USB, and the bandwidth would be just low enough that later you could daisy chain 2 of them with display port 1.3.