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  • The Myths About Apple Keep on Coming

    January 21st, 2010

    Just the other day, I read yet another commentary from an alleged tech pundit claiming that the reason Apple didn’t conquer the world with the Macintosh in the 1980s was because they opted to keep the platform closed. Thus, there is no chance that Apple can overcome the Google onslaught and not fall behind in iPhone sales in the near future. Whether this year or the next, or the year after that, it’s inevitable and you can take that to the bank.

    Of course, what these so-called pundits forget is that 2010 is not like 1984, and Apple has learned from all or most of its serious mistakes. And not licensing the platform wasn’t one of them. They tried that in the 1990s and it nearly killed the company, or perhaps these tech writers need to learn how to do a little research, as that information is also on Google, Bing or any search engine they choose.

    There are loads of reasons why Apple didn’t conquer the PC world with a superior product way back when, and they can be blamed on the bad decisions company CEOs made over the years. I won’t cover all the details over here, except to remind you that, for a long time, Macs were, as still claimed, overpriced compared to comparably equipped PCs. Apple was quite shortsighted in those days, seeking to maximize profits from every single sale, rather than balancing margins against volume and moving towards the best combination of both. Those of you who paid upwards of $10,000 for a fully-outfitted Mac know what I’m talking about.

    What’s more, Apple had a poor product strategy in those days, seeking to enter as many markets as possible rather than concentrate on the ones where they could make a difference. Yes, the LaserWriter and the LaserWriter II were legendary and, along with PageMaker and QuarkXPress, created the desktop publishing industry that survives to this very day. However, you could buy pretty much the same printers, using identical Canon parts, from HP. The key was Adobe’s PostScript, which was licensed to any manufacturer who was willing to sign a contract and pay the fee.

    I won’t get into such products as the QuickTake digital camera, which was actually built by Kodak. You can’t say that Apple actually made a difference in that market, as similar if not identical products were sold under other brand names. When Steve Jobs took control of the company, he put a stop to the product explosion and decided to concentrate on Apple’s core strengths, the major part of which was the Macintosh.

    Yes, Microsoft had long since taken control of the PC marketplace, but by focusing primarily on consumers, school systems and content creators, Apple was able to carve out a sizable and profitable market for themselves. Yes, maybe Apple still has a market share in the single digits, but when it comes to premium-quality personal computers, they are positively huge. More to the point, with some three million of them being sold every quarter, you can’t exactly call Macs insignificant.

    When it came to digital music players, Apple wasn’t the first by any means, but they focused sharply on the limitations of existing models, and built the iPod. It was then integrated to the rest of the company’s lineup using iTunes as the focus for syncing content and offering music and videos. Lest you forget, iTunes is now the largest music retailer, ahead of Amazon and any brick and mortar store, including Wal-Mart. So Apple’s closed, tightly integrated ecosystem, made them number one and kept them there.

    Yes, Apple may not achieve the same level of dominance among smartphones, but virtually every recent competitor has been influenced by the iPhone. After years of failed attempts to sell apps on mobile devices, Apple got it right with the App Store. Sure, they have had problems with delayed approvals, arbitrary rejections and so on and so forth, but with 125,000 offerings and over three billion downloads in a little over a year and a half, they are surely doing most things right. The closest competitor is Google’s Android platform, with roughly 20,000 apps, few of which are quite as compelling. Have you, for example, ever seriously considered an Android smartphone as a gaming platform, even for a single second?

    This doesn’t mean that Google isn’t making serious inroads with Android. More and more companies are coming onboard to build products using Google’s OS, but a lot of those sales are coming at the expense of Microsoft’s Windows Mobile platform, which is fading fast. After all, why pay money to license an OS from Microsoft when a handset maker can get a perfectly serviceable, and certainly more up to date alternative, free and clear? Indeed, a fast look at history demonstrates that Google acquired the fledgling Android platform in 2005 largely to compete against Microsoft. That iPhone didn’t exist at that time, except under deep secrecy in Apple’s test labs.

    In the end, the smartphone market is too large nowadays to be dominated by any one company. There’s plenty of opportunity for Apple, Google, RIM, Nokia and the rest of the major players in the industry to carve out decent segments. There’s even opportunity for Microsoft if they can get their development act together. However, it is foolish to suggest that Apple is repeating the mistakes of the past by continuing to offer gear with full vertical integration. In recent years, they have shown that’s actually the best strategy for the products they build, and don’t forget that other companies, even Microsoft, have tried to imitate them, but so far without much success. But some pundits out there still haven’t a sufficient grip on reality to recognize these simple facts, or maybe they have a different agenda.



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