The other day, I was reading what I regard as a wrongheaded commentary suggesting that Apple’s iPhone is doomed to suffer the fate that befell the Mac back in the early 1990s. In short, other companies would take Apple’s closed ecosystem and smash it to smithereens.
Now I would be the last person to deny the problems that beset Apple way back when. When the critics said there wasn’t a lot of Mac software, they were close to the mark. Yes, a reasonable number of titles were available, but you often had to buy them via a mail order catalog — remember this was before people routinely went online to make purchases — and local outlets had just a few dusty boxes of Mac stuff in the back of the store. It was also true that there was an Apple Tax then too, which meant that you had to pay a rich premium to go Mac.
Indeed, when Microsoft introduced Windows 95 towards the end of that year, accompanied by a promotional campaign featuring The Rolling Stones, people actually did line up to buy upgrades. For most customers, Microsoft finally got Windows right, and maybe it was an 80% solution compared to the Mac, but with cheaper hardware and a greater variety of software, it’s sad to say Apple had trouble keeping up, and the Mac’s market share rapidly eroded.
Now that’s a very cursory summary of the situation. There’s a lot more detail I could mention, most of which you’ve heard before. In the end, Apple nearly bought the farm before Steve Jobs returned as a result of the NeXT acquisition and the rest, as they say, is history.
However, it took years for the word “beleaguered” to be removed from most mentions of Apple by the media, and it’s fair to say far too many tech writers and financial analysts still labor under the belief that it’s 1995 and not 2009. They look at Apple not for what the company does right now, but on what the company did wrong then.
Accordingly, Macs are still labeled as overpriced, and you are allegedly forced to pay an Apple Tax to gain admittance. There still isn’t a lot of Mac software, although thousands and thousands of apps, some exclusive to the platform, prove them dead wrong. Sure there are products that still require Windows, but that doesn’t stop you from running Windows on your Mac courtesy of Boot Camp, or courtesy of a virtual machine app such as VMWare Fusion or Parallels Desktop.
When it comes to the iPod, introduced in 2001, the critics claimed that Apple’s initial spurt of growth would be stunted by the arrival of loads of third-party products that matched or exceeded the feature set. Many had FM radios, and Apple didn’t, except as an add-on accessory, until the arrival of the latest iPod nano. Despite this, Apple soared to the top of the heap and remained there, buttressed by the Apple Store, which beat back all online and brick and mortar retailers to become the number one music store on the planet.
Although Steve Jobs is often credited, sometimes with justification, as immersing people in his own reality distortion field, it’s clear to me that some of Apple’s critics are the ones unable to face reality.
Although dedicated music players are a dying breed, and Apple’s total sales have eroded as a result, they’re still number one, and half of the sales rung up for iPods cover new users. Many existing iPod customers, however, have simply switched to the iPhone.
The story is the same. Apple couldn’t possibly succeed in a heavily saturated marketplace. But after a little over two years, the iPhone is running a close second to the BlackBerry in the U.S. smartphone segment. This is particularly fascinating, since every wireless carrier carries RIM’s products, whereas the iPhone is still only available via AT&T.
Whereas just about every smartphone used a physical keyboard, Apple got ragged on because they opted for a touch screen instead. Now that other smartphone makers are coming up with their own touch interfaces, the products are inevitably dubbed iPhone killers, and Apple’s closed ecosystem supposedly will cause the market for the product to come crashing down one of these days.
This mantra is repeated so often, you wonder if some of the critics are sharing playbooks or talking points memos. The logic is the same. An open market will always supplant the company that locks you in to its own apps. On the other hand, with mobile phones, you’re locked in via many routes. To get an affordable price, you opt for a service contract of up to two years with a wireless carrier. If you want music or apps, you have to buy them from the carrier or the smartphone maker. It’s a very different world from the one you encounter in the personal computer universe where you can buy from tens of thousands of independent retailers and not just factory stores.
In a sense, the problem with most of Apple’s competitors is the same. Instead of delivering a superior product with more innovation, they either imitate what Apple has already done with a few changes, or add features from a PowerPoint presentation without paying much attention as to whether any of those capabilities are useful or can be used by anyone other than a power user.
Yes, there are surely ways to compete and defeat Apple at its own game. But it can’t be done with inferior imitations, nor will it happen because some media pundits simply wish for it.
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