Annex Bulletin 2011-11                              June 8, 2011

A partially OPEN edition


Big Blue "Rock of Gibraltar" Stands (Analysis of IBM's first quarter business results)


Wall Street's New "Rock of Gibraltar" (Annual update to our 5-yr IBM forecast)



Updated 6/08/11, 10:30AM HST

Analysis of Apple's iCloud Announcement

Apple Falls from Tree to Cloud, Then to Earth... with a Thud

Last Major Holdout Joins Race to Cloud, But It Falls Flat on First Attempt

HAIKU, Maui, June 8, 2011 - Last fall, we noted how one by one, major IT leaders were falling into line behind IBM and Google, the two pioneers in cloud technologies.  Some of them were dragged into it kicking and screaming, like Microsoft and Oracle (see the charts below). This week, Apple, the last major holdout has given in to what is clearly an industry trend, not a fad.  

On June 6, the D-day in Europe 67 years ago, Apple fell from a tree into a cloud.  An iCloud to be exact.  How is that possible?  See, in cartoons, anything is possible.  Apple's founder and CEO Steve Jobs, who came out of convalescence to make the announcement at a developers conference in San Francisco, used to be Pixar's CEO.  So Jobs did a trick he learned in that job.  He applied some Pixar anti-gravitational magic to make Apple fall from a tree into a cloud. 

It didn't work.  Apple crashed back down to earth with a thud.  After five years of soaring into the blue yonder, the Apple stock proved this week that, unlike its CEO, it is subject to market's gravitational forces after all.   The big iCloud announcement hoopla was followed by a big collective groan of the industry pundits. 

Even a cloud could not hide the flaws of the Apple iCloud.  Such as that it never rains under it.  The iCloud only makes shade.  User vapors can rise up into the cloud.  They stay there until the user attaches some sort of expensive fire hose to drain them from cloud.  Not exactly what one might call an “elegant” solution.

In other words, users can upload content to the iCloud, but they have no ability to stream that content down from it. All content has to be downloaded to each iOS device.  Which defeats the whole purpose of a cloud when it comes to rich media content. Apple's iCloud service is only being used for storing content (and a small amount at that, experts say) and syncing it.

"The limited amount of memory on iOS devices—coupled with the limited connectivity that most users face in rural and, increasingly, urban areas—may be the nail in the coffin for iCloud, if it doesn’t take a hybrid approach to storing the majority of content on end-user devices," Tim Siglin noted in the report.

This is key to user adoption, the pundits note.  Many users want to access their music, pictures, and movies wherever they are, but may not have the capacity on their portable device to store all their music files. 

Oops... So the latecomer to the cloud party may not have thought things threw.  At least not yet.  Which is what also happened with IBM 30 years ago when it announced its first "Personal Computer."  But the product eventually grew up and morphed into the ubiquitous PC, which birthed and gave its name to an entire industry.  One should never say never when it comes to Steve Jobs.  He has proven he can do magic by reinventing his first brainchild (Apple) after his Pixar adventure.

Meanwhile, here's the lineup of the industry leader who followed IBM's and Google's lead into the clouds...


Their presence in this industry segment proves that what some thought once would be a fad, has actually turned into a trend.

Happy bargain hunting

Bob Djurdjevic

Or just click on SEARCH and use "company or topic name" keywords.

Volume XXVI, Annex Bulletin 2011-11
June 8, 2011

Bob Djurdjevic, Editor

(c) Copyright 2011 by Annex Research, Inc. All rights reserved.
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