“This week, D&M holding killed the RIO line of MP3 players because they simply could not compete with the iPod. What makes this amazing is that a few years ago the RIO, then owned by S3, was competing with Creative Labs for this market and was largely believed to be the company to beat. Apple came out of nowhere as a failing PC company and not only took the market away from Creative Labs and RIO, but grew the market to be vastly larger than before… Apple didn’t just beat RIO, they obliterated it,” Rob Enderle writes for Designtechnica.
“All eyes now shift to the future and what will be coming out of Apple. Speculation surrounds the Apple Phone and an Apple MVNO (Mobile Virtual Network Operator), which, with the right implementation, could take a significant portion of the mobile phone space with a subsidized iPod and a lock-in model few CE vendors could ever match,” Enderle writes. “In addition, an iPod-based home entertainment device like the Sonos is increasingly anticipated, as Apple moves away from the pocket and into the broad CE space. TVs could follow that move, as they expand from the monitors they now sell and start placing TVs in the Apple stores, which could eventually morph into showcases for Apple AV equipment. What may be slowing this down is the agreement years ago with the Beatles’ Label (Apple Records) not to go into the music space, an agreement that is currently undergoing court review. But if Apple wins, remember that they just took out a CE vendor.”
Enderle writes, “Once Apple gets over their legal issues, they could cut a broad swath through the CE space; this potential shouldn’t be lost on anyone. What also should not be lost is that the winner executed well on hardware, software, user experience, and marketing, which now form the template for success in this segment.
Enderle writes, “During the years after the iPod was launched, Microsoft has been working to build a better platform, one that would take the market away from Apple and give it to Microsoft’s partners, much as they did the PC market over a decade ago. In 1984, Apple had 40% of the business PC market and IBM had the other 60%… Apple’s mistake over a decade ago was to not see the same opportunity and to fail to license the critical technology in an attempt to own it all; they ended up almost owning nothing. This mistake is in the process of being repeated; should the result end up the same way, Steve Jobs will likely be remembered as one of the dumbest executives of all time: One who gave up dominant positions twice as a result of his inabilities to see the broad market and to learn to share.”
Full article here.
Steve Jobs was not even with Apple Computer when they “failed” to license in “an attempt to own it all.” In fact, Bill Gates’ infamous memo imploring Apple to license the Mac OS was sent to Apple’s CEO John Sculley and Chief Technology Officer Jean Louis Gassee, not Steve Jobs. Jobs was already on the way out, about to start his NeXT thing (which ended up becoming Mac OS X and with NeXT basically taking over Apple by September 16, 1997). Jobs probably never even saw Gates’ memo. Many people, by the way, believe that Apple ended up with a vastly superior platform precisely because they control the whole widget. Plus, Microsoft never built a better platform than Apple, just a more widely sold platform. It depends on how you define the word “better.” Take a look at Windows XP vs. Mac OS X Tiger. Rarely, except perhaps with Coca-Cola and the iPod+iTunes+iTunes Music Store, does “most popular” equal “best.” See cars, vacuum cleaners, stereos, televisions, etc.
Finally, a song is a song is a song and there is nothing pointing to widespread lust for music subscription outfits. Apple makes the only cross-platform (Mac and Windows) music player plus online music store plus music jukebox software; all tightly and seamlessly integrated.
As we, and others such as Daring Fireball’s John Gruber, explained over a year ago (come on, Rob, get with the program; Windows tech writer Paul Thurrott changed his iTune, you can, too), the Macintosh platform required and still requires huge investments by developers to create compatible software. So, when faced with budgetary contraints, they chose and still sometimes choose to go with the most popular platforms. The iPod simply plays music that can be encoded, for very little cost, in any format the “developers” (musicians and labels) desire: AAC, MP3, WMA, etc. The music doesn’t need to be rewritten, recorded, and remastered. It’s like writing Photoshop once and then pressing a button to translate it for use on Mac, Windows, Linux, etc. To draw an analogy between Mac OS licensing and the iPod/iTunes symbiotic relationship simply highlights the writer’s ignorance of the vast differences between the two business situations.
Apple should and most probably will license their Fairplay DRM if any competing music store and/or portable digital music player company actually starts competing and taking enough share.
Tech Pundit Enderle: ‘fourth quarter should be ugly for Apple’ – August 09, 2005
Enderle: ‘Surveys indicate demand for Apple’s products is dropping like a rock’ due to Intel switch – August 01, 2005
Thurrott: ‘I don’t see how Microsoft will ever stem the flow of iPods coming out of Cupertino’ – July 15, 2005
Thurrott: Microsoft’s ‘iPod killer’ just ‘ain’t going to happen’ – August 12, 2005
Tech writer Thurrott: ‘If Apple doesn’t change its ways, the company simply won’t survive’ – September 16, 2004
Another day, another ‘iPod may go the way of the Mac’ article – August 16, 2004
The iPod is not the Mac, so stop trying to compare them – August 13, 2004
Could Apple be Microsoft today if only had they licensed the Mac OS? – August 09, 2004