• (Update!) Nothing Lasts Forever: Was Dell Right?

    February 5th, 2005

    Just the other day, I heard that the current Star Trek franchise, “Enterprise,” is going to be cancelled because of declining ratings. This will be the first time in years that no new Star Trek TV shows would be produced. Of course, it had a great run, but it brings to mind the sad truth that you can’t bank on one product or product line lasting forever. What does this have to do with Apple and Dell? Read on.

    When Michael Dell’s hand-picked CEO, Kevin Rollins, dismisses the iPod as just a “fad,” he is right, whether you like it or not. We can, though, argue about how long it’ll last. Today, we all know the iPod is a huge cultural phenomenon, but that doesn’t mean a spiffy new product won’t come out next month or next year to supplant it. Some day there will be an end to all the joy, and no doubt Apple is preparing itself for the time when it’ll have to move in. Sure, it’s going to milk the iPod concept for all its worth, and it’s certainly taking advantage of the situation, and the nightmares overwhelming the Windows platform, in entering the low-cost PC market.

    Do I sound too negative? No, I’m just trying to be realistic. The bubble must burst. That’s the law of the jungle, and you have to accept it. Remember when the Sony Walkman was king of the portable music players? Are you old enough? Of course the Walkman never became a phenomenon to the degree of the iPod. And you didn’t have a cottage industry consisting of hundreds of accessories for a Walkman either. Other than different headphones, what would you need?

    On the other hand, and Michael Dell and his CEO probably realize this somewhere in the dark recesses of their consciences, we don’t know when demand for the iPod is going to peak and when it’ll begin to fall. If the demand for the iPod shuffle is any example, it won’t happen this month or maybe not this year. Apple has plenty of time to explore its options and I wouldn’t be surprised to see successor products in the development labs. That doesn’t require any secret information from unnamed sources either. It’s simply logical and a responsible way to run a company.

    On the other hand, there is some wishful thinking in the statement. Ever since iPod sales began to climb, you have read articles suggesting that this product or the next would supplant it. That hasn’t happened yet, largely because people like you won’t accept a commodity music player when you can have the real thing. The word iPod says it all; it lives in its own world. Take this example: A few days ago, I read an article in People magazine in which President Bush and the First Lady were interviewed. Bush was asked if he had an iPod. Now isn’t that an odd question to ask, but the fact is that Bush and Vice President Cheney both have iPods, as do many politicians on the other side of the political aisle. They clearly don’t mind the fact that Al Gore sits on Apple’s board of directors.

    Yes, the iPod is definitely apolitical. In fact, if the situation in Iraq really stabilizes, I wouldn’t be surprised to see its citizens strolling the streets with their iPods. Or maybe that’s begun to happen already; somebody let me know.

    Of course what Michael Dell and his crew will never understand is how to build a product that can capture the public’s imagination. It’s not in his genes. He is no doubt smart enough to know his limitations, and the company that bears his name is great at building cheap PCs and selling them to homes and businesses. But a Dell, shorn of its product label, is essentially indistinguishable from its competition bearing the names HP or Gateway. Yes, I suppose you can identify minor differences in the appearance of their products, but it’s not important in the scheme of things.

    But the real question is whether Apple can really deliver a credible iPod sequel? Certainly the world is watching its every move, and it can’t afford to stumble. No more Cubes, or Apple will lose its credibility pronto. That’s what makes Apple unique. You don’t condemn Sony because one of its TVs fails to generate sales, or GM because the newest Chevrolet bombs in the marketplace. I wonder if Steve Jobs feels he’s not getting a fair shake, that the pressure is unrelenting.

    Then again, in show business, you’re only as good as your current product. If you make a movie or TV show and it fails, you will find it extremely hard to get another chance, unless you’re well established in the business. Even then, a spate of losers can destroy the careers of performers and producers. So maybe Apple is just another entertainment company delivering product to a fickle public. I suppose it’s the Pixar influence.

    A decade from now, the iPod may well be long forgotten, or regarded as a cute product whose time has past. But I’m quite sure Apple will do its best to keep it going for as long as it can, and I only hope that the company will know when to get off the train and try something new. Have a great weekend.

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