A fascinating look at the future of information technology Apple style from I, Cringely. He begins:
More than a century ago, King Gillette invented both the safety razor and a new way of marketing consumer goods. Before Gillette, men shaved with straight razors, which required skill to both make and use, and lasted almost forever. Gillette’s safety razor was mass-produced and required little skill to make OR use, but couldn’t be re-sharpened, so the removable blades had to be discarded when they became dull. His marketing breakthrough was selling the razor handles at little or no profit while making huge profits on the consumable — the blades. This same technique is used today to promote mobile phones and inkjet printers. And it is supposedly behind Apple’s success with the iPod music player.
But in the case of Apple, is the iPod a razor or a blade? In other words, is Apple a hardware company or a media company?
It doesn’t really matter which they are. But, Apple thinks they are a software company. Hardware is a commodity and rather irrevelant.
Apple is at the top of its typical cycle: make a great product, scorn open standards and partnerships, watch one of many companies whiz by you with similar products made superior by extensions from third party companies.
I own an IPOD and I love it, but the fact remains that I can’t integrate it with my car stereo. Nor will Apple share the codes for its MP4 format, so any downloaded ITUNES songs are invisible to any devices on my home network (TIVOs, Linksys wireless stereo). Whether its their products or their business practices, the concept of convergence is in direct opposition to every action that Apple (Steve Jobs) takes.
The IPOD will fall victim to the same fate that has seen Apple lose the home PC war and its marketshare in the education space. A complete lack of understanding of the importance of partnerships and extensions.
http://www.varbusiness.com/showArticle.jhtml?articleID=56900633
It seemed to NewMexiKen that Byron’s analysis was sound and so I sold my 1,000 shares of Apple this morning. Seriously, whatever Apple’s faults, I wish I had bought 1,000 share two weeks ago and paid for my carpet (and then some) with the capital gains since. I did not, of course.
I do think Apple is hardware focused, however. Proprietary software enables them to control how people use their hardware. In his own way, Jobs is more of a control freak than Gates. Jobs has all he needs and he gets to do it his way. Perhaps he has feared that partnerships, etc., would turn Apple into Windows. He’d rather be right than number one. Gates would rather be number one.