Baker says used iPhone resale value enables Apple to charge consumers less effectively than Android despite higher sticker prices.
“Used iPhones retain their value much better than used Android phones. When you trade in your phone, you capture that.”
Baker argues used iPhone resale value is critically important to Apple's business model and pricing power.
“One is, I think the price to used iPhones is critically important to Apple's business model. Why is that? Used iPhones retain their value much better than used Android phones.”
Baker argues that 50 basis points of UI/UX superiority can create hundreds of billions in market value.
“Would argue personally they're at parody, but 50 bps is huge. If you're 50 bps better, that can be the foundation of hundreds of billions of dollars in market value.”
Baker says Google found two milliseconds of latency reduction had huge impact on search volumes.
“Google found that milliseconds of latency mattered to search. That if you could take two milliseconds out of search latency, that it had a huge impact on search volumes.”
Baker argues Zoom's superior UI/UX versus Google, Apple, and Facebook products explains its dominance during coronavirus.
“And Zoom's UI and UX for all sorts of reasons is just better than Hangouts, FaceTime or whatever the comparable Facebook product is.”
Baker compares running GPU clusters to the operational complexity of building $50 billion retail chains.
“And people think, oh, that can't be a durable competitive advantage. Well, I was a retail analyst in the year 2005, and I observed all you had to do to create a $50,000,000,000 market cap retailer in America in any category was be able to run 1,000 stores in 50 states”
Baker explains semiconductor manufacturing advantage comes from recipe not ingredients, despite using same equipment.
“And semi's and semiconductor manufacturing, you have a big advantage if you were ahead. Everybody it's like baking. Everybody uses the same ingredients or whatever.”