http://www.ft.com/intl/cms/s/0/62b7a94e-c15c-11e2-9767-00144feab7de.html#axzz2U4fD8I2S I disagree. I think software (and services) is where Apple is lagging at the moment. Farhad Manjoo mentions shrinking margins. How does releasing a cheaper/mid-range phone increase margins? Part of the reason Apple's margins have shrunk (from an abnormal high) is because of how well the iPad mini and iPhone 4/4S are selling. Also why does he assume all Apple is doing is throwing a new coat of paint on iOS? Or that re-designing the UI is nothing more than a new coat of paint? Last year most of Apple's releases were hardware focused (aside from maps). I think it makes sense to focus on software/services this year.