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Competitors to Apple's iPad risk issues with excess inventory

post #1 of 61
Thread Starter 
A large number of companies hope to take on Apple's iPad with their own tablets later this year, but the sheer number of options and limited consumer interest may lead to excess inventory.

Market watchers told Taiwanese industry publication DigiTimes that Apple's competitors face a "high risk" in the tablet PC market, as demand scale is only estimated to be around 20 million units. Those customers will be able to choose from over 10 major players that are expected to release their own take on the touchscreen tablet in the second half of 2011.

Both first-tier smartphone makers and second-tier companies are hoping to get in on the fledgling market, where Apple found success right off the bat with the launch of the first-generation iPad in 2010.

Samsung launched its Galaxy Tab late last year, and the Motorola Xoom debuted earlier this year, but both devices saw weaker-than-expected sales. Market watchers are said to be concerned that other players, including Acer and Asustek, will find themselves in the same situation.

In addition to competing with the market-leading iPad, major players like Samsung, Motorola, Acer and Asustek must also compete with smaller companies like Micro-Star International, ViewSonic and Gigabyte Technology in the enterprise market.

"Since there are already many tablet PC models with different specifications causing a mess in the tablet PC ecosystem, the market watchers (are) concerned that the market will soon enter fierce competition with many players to start phasing out of the segment in the fourth quarter," the report said.

On Tuesday, details of another major player's entrance in the tablet market emerged, with a new report claiming that retailer Amazon plans to launch a touchscreen tablet with an LCD touchscreen in the second half of 2011. Such a device would allow users to watch movies and listen to music, offering greater functionality than the e-ink-based Kindle reader.



Weak sales of the Xoom, the first tablet running the tablet-oriented version of Google's Android operating system, prompted device manufacturers to delay the release of their own Android 3.0-powered tablets last month. And Motorola is said to already be working on a successor to the Xoom, which is expected to launch in the second half of 2011.

Apple meanwhile, sold 15 million iPads in 2010, earning $9.5 billion in revenue. In the last quarter alone, Apple sold 4.7 million iPads, a number that was even lower than expected due to supply constraints following the launch of the iPad 2.
post #2 of 61
Quote:
Originally Posted by AppleInsider View Post

A large number of companies hope to take on Apple's iPad with their own tablets later this year, but the sheer number of options and limited consumer interest may lead to excess inventory.

Talk about an understatement.....
post #3 of 61
Quote:
Originally Posted by anantksundaram View Post

Talk about an understatement.....

I was thinking the same thing when I read this:

Samsung launched its Galaxy Tab late last year, and the Motorola Xoom debuted earlier this year, but both devices saw weaker-than-expected sales.
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post #4 of 61
This tends to force prices down. If you have 100K extra units, you need to sell them eventually. The price keeps dropping until somebody buys them or a deal is made to give them away for a tax deduction. Only in the very worst cases will they become landfill.

Would you buy a Xoom for US$9.99?
post #5 of 61
Quote:
Originally Posted by anantksundaram View Post

Talk about an understatement.....

Euphemism, not understatement. "Excess inventory" makes it sound like they were over-efficient in production instead of what they were... crappy sales with a glut left on the shelves and in the channels.
post #6 of 61
Hey, if they have an inventory clearout sale, I'd try a Xoom for $299.
post #7 of 61
Quote:
Originally Posted by Urinal Mint View Post

Hey, if they have an inventory clearout sale, I'd try a Xoom for $299.

You and me both...
post #8 of 61
Quote:
Originally Posted by Twelve View Post

This tends to force prices down. If you have 100K extra units, you need to sell them eventually. The price keeps dropping until somebody buys them or a deal is made to give them away for a tax deduction. Only in the very worst cases will they become landfill.

Would you buy a Xoom for US$9.99?

$9.99? Most certainly yes. It could be useful for the kids to watch movies in the back seat of the car. In all fairness, I'd probably be willing to pay as much as I would for a good-quality portable DVD player, perhaps even a few bucks more.
post #9 of 61
For $9.99 they would make great coasters.
post #10 of 61
Quote:
Originally Posted by Twelve View Post

This tends to force prices down. If you have 100K extra units, you need to sell them eventually. The price keeps dropping until somebody buys them or a deal is made to give them away for a tax deduction. Only in the very worst cases will they become landfill.

Would you buy a Xoom for US$9.99?

Nah, it wouldn't play out that way. At some point, the manufacturer would halt retail sales, then attempt to sell the remaining inventory to enterprise buyers with volume sales discounts.

If a total enterprise sell through isn't achievable, then the leftover units would be cannibalized for parts.
post #11 of 61
I'm actually starting to see an increasing number of non-iPad tablets on my morning commute. Still way less than half, but until a month ago I'd seen almost none. I've seen a couple of the small form factor ones which fit nicely in women's purses. And I've seen what I think is a Xoom (some sort of Android tablet). It's becoming a little more normal to buy something other than an iPad, especially with inventory-clearing sales. Apple has to be careful that they can compete if a dozen competitors try-and-fail-and-lowball their prices for clearances, one after another.
post #12 of 61
Anytime your 2nd biggest selling point has an asterisk you know the thing is going to suck. I mean, come on people! Releasing a half-baked tablet will not help you to win this category. You need a better product as a whole. Not just a bunch of crappy tech specs that mean nothing. I have seen OSs running on low power chips far out run bloated OSs running on chips 2x as fast. It is the WHOLE SYSTEM that is important. </rant>
post #13 of 61
Quote:
Originally Posted by Booga View Post

I'm actually starting to see an increasing number of non-iPad tablets on my morning commute. Still way less than half, but until a month ago I'd seen almost none. I've seen a couple of the small form factor ones which fit nicely in women's purses. And I've seen what I think is a Xoom (some sort of Android tablet). It's becoming a little more normal to buy something other than an iPad, especially with inventory-clearing sales. Apple has to be careful that they can compete if a dozen competitors try-and-fail-and-lowball their prices for clearances, one after another.

A company has to commit to that kind of behavior. You can't just go on releasing crapware hoping to eventually get it right some day. The brand will pick up a bad reputation; even today many people won't touch anything from Real Networks.

Acer chased unit sales rather than profit margins by selling lots and lots of cheap, low-margin hardware. Recently they came to the conclusion that they were doing it wrong.

The Acer CEO resigned and the founder basically said, "Sorry, we effed up our business model. We built a bunch of cheap crap and even though we sold a bunch of it, at the end of the day we're not very proud of what we've done. Sorry, shareholders."
post #14 of 61
Quote:
Originally Posted by Booga View Post

. . Apple has to be careful that they can compete if a dozen competitors try-and-fail-and-lowball their prices for clearances, one after another.

I don't think so Booga. Clearance is just that. Once they are gone, they are gone. The company may try to introduce another pad of some sort but Apple doesn't have to compete with any poor quality orphaned product that loses money for a competitor. Such companies can take only so many hits before the bottom line and research pockets tank. The more the other pads fail, the better Apple and the iPad look.

The only thing Apple has to compete with is itself. It will continue to update, improve and expand the iOS experience and refresh its pad product line annually. It seems to be a slam-dunk by Apple, this iPad of theirs. Apple's in the fortunate position of not being in a hurry to get to the race. It is there, running on the track well into the second lap and the rest keep stumbling at the starting gate.

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post #15 of 61
What about the $399 Asus Transformer, which sold out within minutes on release and is impossible to find in stock since? It is pretty competitive to the iPad 2 in specification. It is a tiny bit heavier and thicker, but otherwise has twice the ram and equivalent storage (along with all of the expansion ports everyone hates Apple for not including like MicroSD, HDMI, USB with host support, etc). There is even a keyboard dock for it that has an extra battery and turns it into a netbook-like-thing. Doesn't look like Asus is having an excess inventory issue in this case. Ok, ok, I will go ahead and address the first knee jerk response "they only shipped [some relatively small number] units". Even so, there's a pretty clear demand for them, no?
post #16 of 61
I haven't bought an iPad nor any tablet, however if I was in the market for one (I still feel like I will buy one soon) then my first choice is an iPad 2. Because I believe these other manufacturers not only need to make their tablets better then the iPad 2 but cheaper as well for it to stand a chance. Matching apples 499 price in my humble opinion is not enough. Consumers understand that no tablet to date can replace a laptop completely, not the iPad or any other tablet. So in that regard specs don't sell tablets. And when these manufacturers try to compete with apple on the user experience level they're shooting themselves in the foot. Because even if their tablets user experience is better then apples, they have an uphill battle trying to undo the mindset of consumers that apples ecosystem is not the best. Again in my very inexperienced opinion that's almost impossible to do at this stage. People don't want tablets, they want ipads. And it's getting more and more noticable as time goes on.
post #17 of 61
Quote:
Originally Posted by cvaldes1831 View Post

If a total enterprise sell through isn't achievable, then the leftover units would be cannibalized for parts.

I was under the impression that cannibalizing for parts is a very costly undertaking.
post #18 of 61
Quote:
Originally Posted by AppleInsider View Post

Both first-tier smartphone makers and second-tier companies are hoping to get in on the fledgling market, where Apple found success right off the bat with the launch of the first-generation iPad in 2010.

Fledgling my butt. The tablet market had been around over a decade by the time Apple entered with its iPad. Newtons, Palm Pilots, the Go platform, and Windows Tablet... remember those? Everybody keeps wanting to dismiss Apple's innovation by making out that there hadn't been competitors when it entered the market just because its entry made those previous products irrelevant. But we shouldn't be in the business of piling on, too.

Both first-tier smartphone makers and second-tier companies are scrambling to copy Apple's solution so that they can find success in the ancient but previously stagnant market. That would be a better way to put it.
post #19 of 61
Quote:
Originally Posted by tundraboy View Post

I was under the impression that cannibalizing for parts is a very costly undertaking.

Hard on the teeth, as well.
post #20 of 61
The salesperson at the cellular kiosk at CostCo here said they got 9 Xooms when they came out, and have sold 4 of them.

Oh, and there was no line!
post #21 of 61
eventually means good deals on Woot! Looking forward to it.
post #22 of 61
you know that if Samsung, Motorola, and the rest had actual tablet sales figures that were good, or even respectable, they would have bragged about them by now. or at least reported numbers along with the financial quarterlies. but if they are embarrassing ...

however, it is still too soon to conclude the tablet market will turn out like the "MP3 player" iPod market, with Apple holding 70+% indefinitely. by the end of this year we should see fully-baked Android and other OS tablets, not the half-baked models released so far. and their 4G infrastructure and various ecosystems and apps stores will be more filled out, putting them more on an even footing with the iPad in consumer usability.

of course Apple won't be standing still either. we know some kind of iCloud and iOS 5 are coming. more content/capabilities for Apple TV are certain. but to really nail the market, one or more new Apple products would be conclusive. a bigger 5.5" iPod touch? or how about a Shuffle phone! it's the full range of Apple products that provides the crucial foundation for the iPad.
post #23 of 61
I have high hopes for the HP TouchPad. I hope they sell enough to keep it in production. Nowadays though, it seems like products are abandoned early if they don't sell a gazillion units on the first weekend.
post #24 of 61
Quote:
Originally Posted by Neo42 View Post

What about the $399 Asus Transformer, which sold out within minutes on release and is impossible to find in stock since? It is pretty competitive to the iPad 2 in specification. It is a tiny bit heavier and thicker, but otherwise has twice the ram and equivalent storage (along with all of the expansion ports everyone hates Apple for not including like MicroSD, HDMI, USB with host support, etc). There is even a keyboard dock for it that has an extra battery and turns it into a netbook-like-thing. Doesn't look like Asus is having an excess inventory issue in this case. Ok, ok, I will go ahead and address the first knee jerk response "they only shipped [some relatively small number] units". Even so, there's a pretty clear demand for them, no?

No, the first response should be "here's yet another tech-head drive-by poster preaching the same tired speech that specs are more important than the entire package. "

Let me guess, you were probably someone that was preaching the superiority of the XOOM tablet over the iPad in terms of specs... right up to the point you shut your mouth and scurried to a corner when the supposedly "superior" tablet was no faster than a crippled one-year-old A4 iPad! Add to the insult a half-baked Android Honeycomb OS that is better off being used in some nerds' basement, and a flop in the retail space.

"Everyone hates Apple for not including <insert kitchen sink here>" confirms you are trolling. "Everyone" is scooping up iPads and as Apple announced, the have the "Mother of all backlogs". Time to accept reality that your opinion on what constitutes a successful product is useless to say the least.

Apple is hitting home runs and thinking long-term. The rest of the market is competing for scraps and against each other. Until they realize the strategy is for all to collaborate (not going to happen) and come up with an elegant ecosystem and fluid, simple interface system, they are going to keep falling face-first on concrete.
post #25 of 61
Actually, I'm far more interested in Apple as a customer than as a shareholder, so I really do hope these products do better than they have done so far.

Apple's never been a company to rest on their laurels, but a little competition wouldn't hurt.
post #26 of 61
Quote:
Originally Posted by Neo42 View Post

What about the $399 Asus Transformer, which sold out within minutes on release and is impossible to find in stock since? It is pretty competitive to the iPad 2 in specification. It is a tiny bit heavier and thicker, but otherwise has twice the ram and equivalent storage (along with all of the expansion ports everyone hates Apple for not including like MicroSD, HDMI, USB with host support, etc). There is even a keyboard dock for it that has an extra battery and turns it into a netbook-like-thing. Doesn't look like Asus is having an excess inventory issue in this case. Ok, ok, I will go ahead and address the first knee jerk response "they only shipped [some relatively small number] units". Even so, there's a pretty clear demand for them, no?

Even if the hardware is decent, if the OS and software aren't up to par (that whole ecosystem thingy) you don't have a strong market capture scenario. Only geeks chase specs and features, the average user, which is the largest and most profitable part of the market, looks for ease of use, convenience and durability. This is where the strength of the ecosystem comes to bear, and why these "competitors", so far, has not produced a strong competitor. The Playbook has a chance (because RIM understands ecosystem) as does the HP Slate on WebOS - assuming the Palm div. gets a strong selection of apps delivered as well. RIM is challenged in trying to leverage the Android Marketplace on top of its own stuff - we have yet to see an operational unit demonstrating how strong this is. Google at least recognized that they needed to intervene in the whole Honeycomb debacle, but I don't see them staying with Android for very long on tabbies - ChromeOS is being pushed into the picture for the future. Fragmentation galore.

Just as a couple of side notes "everyone" doesn't "hate" Apple for not including a plethora of ports, that's rather silly, the Tegra 2 isn't a significantly better performer than the ARM9 in the iPad 2, and the whole extra battery docking thing has been handled by the iPad as well, so net effect is not a clear improvement on what the iPad brings to the table. Unless you are completely wed to NOT being in the iOS ecosystem.
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post #27 of 61
Quote:
Originally Posted by _BeAsTMaSteR_ View Post

People don't want tablets, they want ipads. And it's getting more and more noticable as time goes on.

I'm beginning to think people regarding tablet as a computer. And in computer there are only 2 big names: Microsoft and Apple. Android is nice but it will never integrate well with Windows while iOS coming closer to OSX every day. I think if XOOM running Windows for ARM it might have more chance of success.
I mean why do you want Android when it will integrate with nothing but internet services?
post #28 of 61
I just had an email conversation with a lady friend of mine who lives in SF. It began when I got an email with the signature stating "Sent from my Galaxy Tab." I questioned her about that and her answer was basically, that it fit nicely into her purse and it did everything she needed it to do without the need to go buy any addon apps. We didn't get around to price. She's a non-technical consumer who didn't want to wait weeks for an iPad so she got what she considered the next best option. I guess if she's happy with what she bought, then there's no argument.
post #29 of 61
Quote:
Originally Posted by fecklesstechguy View Post

Even if the hardware is decent, if the OS and software aren't up to par (that whole ecosystem thingy) you don't have a strong market capture scenario. Only geeks chase specs and features, the average user, which is the largest and most profitable part of the market, looks for ease of use, convenience and durability. This is where the strength of the ecosystem comes to bear, and why these "competitors", so far, has not produced a strong competitor. The Playbook has a chance (because RIM understands ecosystem) as does the HP Slate on WebOS - assuming the Palm div. gets a strong selection of apps delivered as well. RIM is challenged in trying to leverage the Android Marketplace on top of its own stuff - we have yet to see an operational unit demonstrating how strong this is. Google at least recognized that they needed to intervene in the whole Honeycomb debacle, but I don't see them staying with Android for very long on tabbies - ChromeOS is being pushed into the picture for the future. Fragmentation galore.

Just as a couple of side notes "everyone" doesn't "hate" Apple for not including a plethora of ports, that's rather silly, the Tegra 2 isn't a significantly better performer than the ARM9 in the iPad 2, and the whole extra battery docking thing has been handled by the iPad as well, so net effect is not a clear improvement on what the iPad brings to the table. Unless you are completely wed to NOT being in the iOS ecosystem.

Anyone who likes having to use adapters to plug in camera/SD card or to an external display is straight up lying . Maybe not everyone hates Apple for it, but anyone who's got any capacity of independent thought will have some minor frustration over the "you get no ports, no expansion" aspect of the iPad. No reason to beat around the bush here, it is Apple's advantage to hinder expandability where it could be implemented so easily.

Like it or not, Android market share is growing and while I won't argue that iOS is inferior (it is clearly superior in ease of use and efficiency), it is undeniable that Honeycomb is offering a broader set of features in their platform (multitasking previews, widgets, usb host mode, openness, bla bla bla). I don't know where you are getting the idea that Google will abandon Honeycomb. It may not be perfect but based on what I've seen it does a ton of things iOS doesn't and plenty fast, regardless of specs. Every fan of Apple's stuff will continue to scream fragmentation, but sometimes the trade off is worth the lack of frustration that iOS can bring to a power user.

That all being said, most people aren't power users. I do still get a little bent out of shape when I have no option to view flash, read external media or just simply manage content on the device. Its those times that I envy those w/ android tabs.
post #30 of 61
Quote:
Originally Posted by Neo42 View Post

What about the $399 Asus Transformer, which sold out within minutes on release and is impossible to find in stock since? It is pretty competitive to the iPad 2 in specification. It is a tiny bit heavier and thicker, but otherwise has twice the ram and equivalent storage (along with all of the expansion ports everyone hates Apple for not including like MicroSD, HDMI, USB with host support, etc). There is even a keyboard dock for it that has an extra battery and turns it into a netbook-like-thing. Doesn't look like Asus is having an excess inventory issue in this case. Ok, ok, I will go ahead and address the first knee jerk response "they only shipped [some relatively small number] units". Even so, there's a pretty clear demand for them, no?

I like it, personally. A little unpolished and rough around the edges from what I've played with - much like other Honeycomb tablets - but competition is good. Some people would rather the microSD/HDMI/USB/keyboard of the Transformer, others would rather the iOS ecosystem. Android will always have its followers. Let them enjoy what they have; "a notification system that doesn't suck" springs to mind. (Apple, I love you baby, but why you gotta make me hit you every time you do that popup?)

Spec wars though, the Geforce ULP gets it ass handed to it by the SGX543MP2, and I like to game on the go, so I know which one I like better.
post #31 of 61
Quote:
Originally Posted by Neo42 View Post

Anyone who likes having to use adapters to plug in camera/SD card or to an external display is straight up lying . Maybe not everyone hates Apple for it, but anyone who's got any capacity of independent thought will have some minor frustration over the "you get no ports, no expansion" aspect of the iPad. No reason to beat around the bush here, it is Apple's advantage to hinder expandability where it could be implemented so easily.

Like it or not, Android market share is growing and while I won't argue that iOS is inferior (it is clearly superior in ease of use and efficiency), it is undeniable that Honeycomb is offering a broader set of features in their platform (multitasking previews, widgets, usb host mode, openness, bla bla bla). I don't know where you are getting the idea that Google will abandon Honeycomb. It may not be perfect but based on what I've seen it does a ton of things iOS doesn't and plenty fast, regardless of specs. Every fan of Apple's stuff will continue to scream fragmentation, but sometimes the trade off is worth the lack of frustration that iOS can bring to a power user.

That all being said, most people aren't power users. I do still get a little bent out of shape when I have no option to view flash, read external media or just simply manage content on the device. Its those times that I envy those w/ android tabs.

I wish you people would come up with something new and original than the same old stuff.

Yawn.
post #32 of 61
Quote:
Originally Posted by anantksundaram View Post

I wish you people would come up with something new and original than the same old stuff.

Yawn.

Because belittling your potential customer base is a great way to win them over. Never mind that the guy seems to already own an iPad.

The reason the "same old arguments" keep coming up is because people have been asking for them for years, and Apple hasn't implemented them. Ergo, Android found a niche.

If Apple had listened, they might have totally eaten Android's lunch rather than just taking their drink and fruit cup.
post #33 of 61
Quote:
Originally Posted by Twelve View Post

Would you buy a Xoom for US$9.99?

Eh. Sure. Why not?
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post #34 of 61
Quote:
Originally Posted by Urinal Mint View Post

If Apple had listened, they might have totally eaten Android's lunch rather than just taking their drink and fruit cup.

How can they eat Android lunch when it was available on one carrier vs all have Android?
post #35 of 61
Quote:
Originally Posted by matrix07 View Post

How can they eat Android lunch when it was available on one carrier vs all have Android?

Hell if I know, I'm just proposing an alternate reality where Apple listened to customer feedback.
post #36 of 61
Quote:
Originally Posted by Urinal Mint View Post

I like it, personally. A little unpolished and rough around the edges from what I've played with - much like other Honeycomb tablets - but competition is good. Some people would rather the microSD/HDMI/USB/keyboard of the Transformer, others would rather the iOS ecosystem. Android will always have its followers. Let them enjoy what they have; "a notification system that doesn't suck" springs to mind. (Apple, I love you baby, but why you gotta make me hit you every time you do that popup?)

Spec wars though, the Geforce ULP gets it ass handed to it by the SGX543MP2, and I like to game on the go, so I know which one I like better.

The notification system on Android sucks, a barely legible symbol on a small bar at the top of the screen, that just sits there until it's swiped down.

The number of users I've seen who don't understand how this works is astounding.
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post #37 of 61
Quote:
Originally Posted by Urinal Mint View Post

Hell if I know, I'm just proposing an alternate reality where Apple listened to customer feedback.

There is hope. They gave you option for orientation lock, remember?
post #38 of 61
Quote:
Originally Posted by hill60 View Post

The notification system on Android sucks, a barely legible symbol on a small bar at the top of the screen, that just sits there until it's swiped down.

The number of users I've seen who don't understand how this works is astounding.

I'd rather have a small, unobtrusive, quiet little bar that I can ignore if I'm in the middle of something rather than get a half-dozen notifications puked sequentially in the middle of my screen while I'm in the middle of something that won't go away until they get their proverbial cookie and pat on the head. Yes, I want to address your alert, Calendar, but let me finish my sentence/note/drawing/level here.

Quote:
Originally Posted by matrix07 View Post

There is hope. They gave you option for orientation lock, remember?

True!
post #39 of 61
Quote:
Originally Posted by sflocal View Post

No, the first response should be "here's yet another tech-head drive-by poster preaching the same tired speech that specs are more important than the entire package. "

Let me guess, you were probably someone that was preaching the superiority of the XOOM tablet over the iPad in terms of specs... right up to the point you shut your mouth and scurried to a corner when the supposedly "superior" tablet was no faster than a crippled one-year-old A4 iPad! Add to the insult a half-baked Android Honeycomb OS that is better off being used in some nerds' basement, and a flop in the retail space.

"Everyone hates Apple for not including <insert kitchen sink here>" confirms you are trolling. "Everyone" is scooping up iPads and as Apple announced, the have the "Mother of all backlogs". Time to accept reality that your opinion on what constitutes a successful product is useless to say the least.

Apple is hitting home runs and thinking long-term. The rest of the market is competing for scraps and against each other. Until they realize the strategy is for all to collaborate (not going to happen) and come up with an elegant ecosystem and fluid, simple interface system, they are going to keep falling face-first on concrete.

whoa I missed your post, sorry. SPoken like a true Apple Evangelist! Look, I'm actually a fan of Apple, and technology in general. I am a minority because I'm much more techy than the general public. It's incredible how polarizing each camp can be because neither android folks nor apple folks can see past the shortcomings of their platform. Anyway, thanks for the laughs.
post #40 of 61
Quote:
Originally Posted by anantksundaram View Post

I wish you people would come up with something new and original than the same old stuff.

Yawn.

The fact that complaints are OLD complaints just reinforces that Apple doesn't listen to their customers PERIOD. Whats that? you want something that is obviously missing? NO no please stop thinking and let us tell you how to use our gimped product.
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