Steve Jobs plays high-stakes poker with greedy record labels

“In a parallel world, Steve Jobs could have been a poker player with a reputation as a cool hand. After three decades at the top table of technology, all the required skills are there: patience, self-belief, bravado — and, most importantly, the ability to ride a streak of luck,” Bobbie Johnson reports for The Mail & Guardian. “‘Some people thought we got really lucky with the iPod, and we did,’ says Jobs. But, he adds, real winners don’t just enjoy the breaks, they exploit them. It is necessary to stay on top, especially when everybody’s out to get you. As he puts it: ‘We have world-class competitors trying to kill us.'”

Johnson reports, “So far, the competition is not doing a great job. Apple’s hand in the home computer market might be weak, but it holds all the cards in digital music. Thanks to phenomenal sales of the iPod over the past few years, the company is at an all-time high and its dominance of music downloading is almost total. More than six million iPods were shipped in the past three months, underpinned by a pervasive marketing campaign and growing consumer awareness. No wonder, then, that Jobs is in confident mood.”

Johnson reports, “Dressed in the regulation outfit of a Californian intellectual — black, black and more black — he is upbeat about the future of Apple, the company he founded almost 30 years ago in his parents’ garage. He believes that central to the company’s success is Apple’s vision — his vision — of making technology simple. ‘There’s a very strong DNA within Apple, and that’s about taking state-of-the-art technology and making it easy for people,’ he says. Jobs’s targets are busy, modern consumers; ‘people who don’t want to read manuals, people who live very busy lives.'”

“There are certainly a large number who buy into that concept. But while many are drawn in by the slick advertising and fashionable branding, those who stick around are often motivated by the man himself. On stage, and with an audience to play with, Jobs is the ultimate salesman. His speeches are famous for generating the “reality distortion field”, a sense of devotion to the cause that most rival technology bosses would kill for. Some fans will go wild for each new product that Jobs delivers, and his enthusiasm and charisma pour out across the stage,” Johnson reports.

“It’s clear that ownership is important to Jobs. He might not own Apple, but as the public face of the company he does lay claim to the firm’s image, and understands the necessity of being seen as ‘the good guy.’ For instance, when it is suggested that record labels might look to increase their income by bumping up the price of iTunes downloads, he brings in the spectre of illegal downloading,” Johnson reports. ‘Music companies make more money when they sell a song on iTunes than when they sell a CD,’ Jobs says. ‘If they want to raise prices, it’s because they’re greedy. If the price goes up, people turn back to piracy — and everybody loses.’ This is how things work: with a swift shuffle, he asserts Apple’s ownership of the music download market, and distances it from the messy decisions.”

Full article here.
Apple’s hand in the home computer market is not as “weak” as some might think. Anywhere from 8 – 16% of personal computer users own and use Apple Macs. See related articles. Besides that quibble, this is an excellent article that focuses on Apple CEO Steve Jobs’ ability to sell Apple products and Apple the company.

Related articles:Apple continues to grow worldwide Macintosh market share – July 25, 2005
Gartner: Apple grows shipments 31 percent in Q2 2005, moves from 5th to 4th in U.S. market share – July 18, 2005
IDC: Apple gains U.S. market share at double overall market rate, up to 4.5 percent for Q2 2005 – July 18, 2005
16-percent of computer users are unaffected by viruses, malware because they use Apple Macs – June 15, 2005
Survey shows Apple Macs owned by nearly 10 percent of US small and medium-sized businesses – February 17, 2005
More people use Apple Macs than you think; 8-12 percent of homes use Macs – March 31, 2004
10 percent of computer users use a Mac; 3 percent is Mac’s approximate quarterly market share – February 10, 2004
Syracuse Post-Standard: 3 percent is a false stat; Mac holds ’10 to 12 percent of the market for PCs – August 27, 2003

Record labels accuse Apple CEO Jobs of ‘double standard’ as they seek to force iTunes price increase – September 21, 2005
Apple CEO Steve Jobs to repel ‘greedy’ record companies’ demands for higher iTunes prices – September 21, 2005
Apple CEO Steve Jobs vows to stand firm in face of ‘greedy’ record companies – September 20, 2005
NYT’s Pogue to record companies: it’d be idiotic to mess with Apple iTunes Music Store prices – August 31, 2005
Apple CEO Steve Jobs prepares for pivotal fight on digital music prices – August 28, 2005
Record labels to push Apple for higher iTunes Music Store prices in 2006? – August 05, 2005
Record labels look to raise iTunes wholesale prices, music industry fears Apple’s market domination – March 05, 2005
Report: Apple CEO Steve Jobs ‘angered’ as music labels try to raise prices for downloads – February 28, 2005
Report: Music labels delay Euro iTunes Music Store fearing Apple domination – May 05, 2004
Greedy Big Five music labels looking to jack up iTunes songs to $2.49 each? – April 22, 2004

18 Comments

  1. I really appreciate the MDN coverage of articles, but spewing incorrect figures such as “Anywhere from 8 – 16% of personal computer users own and use Apple Macs” is just out right not true.

    Perhaps one day that will be the case…as it used to be years ago…but it isn’t the case and there are surveys after survey, study after study, even factoring in “Macs last longer” and other fudge factors.

    If you are going to print stuff like that, PRINT THE NUMBERS BEHIND THE CLAIM, or else, just print “We love Macs and we guess the numbers are more like…” The same thing with the 50M iPods sold in 2006 quote from yesterday.

    MDN word: opened

  2. Bill Gates responded by saying:

    “Anybody can take high-tech and make it easy for people to use. At Microsoft, we go the extra mile for our customers – we take the technology that Apple has made easy, and then add back in some of the difficulty and complexity that give people a sense of accomplishment when they finally figure out how to do something with it. This gives people self-confidence in their abilities to master new technology. I think people like to read manuals. Everyone should.”

    Steve Ballmer added:

    “Yup. What he said. Developers, developers…”

  3. MDN has posted figures in the past and the 16% figure is correct by some surveys. Again, currently used personal computers, not sold, not overall, but personal computers in use. Go through the archives and find the answer yourself…

  4. Back to the article–its author, Bobbie Johnson, tries to imply that he interviewed Jobs personally (describing his wardrobe, facial expressions, etc.) when all Johnson really did was cobble together various quotes Jobs made in Paris, all in the public domain, all easily found on the internet.

    At no time does Johnson attribute these remarks to the Q&A sessions jobs held in Paris. I doubt very much Bobbie Johnson was even there.

    He also wordsmithed what Jobs said to a great extent. Look up Jobs’ remarks in any number of sources that attributed, correctly, precisely where Jobs was and who he was talking to, such as this one here:

    http://hardware.silicon.com/desktops/0,39024645,39152460,00.htm

    Example of public-domain quote #1:

    Asked if he appreciated any Apple source code being hacked, he responded: “You’re asking me whether I think theft is a good idea… You’re asking me if people steal your software, is it OK?”

    Bobbie Johnson’s take #1:

    Questions about his feelings on hackers attempting to “improve” Apple’s operating system, for example, are batted away with a wide-eyed stare. “You’re asking me whether theft is a good idea?” he responds, incredulously.

    Example of public-domain quote #2:

    We have world class competitors trying to kill us – like Sony, they’re a good company.”

    Bobbie Johnson’s take #2:

    “We have world-class competitors trying to kill us.”

    Example of public-domain quote #3:

    “Music companies make more money when they sell a song on iTunes than when they sell a CD,” Jobs says. “If they want to raise prices, it’s because they’re greedy. If the price goes up, people turn back to piracy — and everybody loses.”

    Bobbie Johnson’s take #3:

    “”Music companies make more money when they sell a song on iTunes than when they sell a CD,” Jobs says. “If they want to raise prices, it’s because they’re greedy. If the price goes up, people turn back to piracy — and everybody loses.”

    Macworld UK got fooled. “Johnson achieved a rare interview with the famously media recalcitrant Jobs in Paris this week.”

    http://www.macworld.co.uk/news/index.cfm?NewsID=12702&Page=1&pagePos=1

    I wanna be a hack jounalist. Thanks to the internet. world’s easiest gig.

  5. me, if you check the site visit stats for BoingBoing.net (http://www.boingboing.net/stats/), which gets a lot of traffic. So far for the month of September, 1.6 million unique visitors have viewed their site. Of those 16.8% are Macintosh users. That’s a rather decent cross section. And remember that Macs DO last longer, thus most Mac users will not buy a computer as often as the average home PC/Windows user. (In my home, I own 3 Macs and 1 PC. One Mac is an old 6116CD, and yes, it is still used.)

    And remember, MDN did not claim “Marketshare”, which is flouted by almost every report about Apple. Admittedly, it’s small, but it’s growing at a rate which is faster than the computer industry as a whole, which is proven in several reports. Marketshare may never hit double digits again, but who knows?

  6. 8% weak? Maybe compared to Microsofts’ 80% or whatever it is of the OS marketshare, but in every other monopoly-free market 8% would be pretty healthy, especially when you consider that Apple is often referred to as the “Bang & Olufsen of the PC market”.

  7. It took him 4 paragraphs, but he managed to shoe-horn in the infamous ‘RDF’ malarky. Not especially creative, but persistant non-the-less.

    And the ‘some fans go wild for each new product’, is code for zealot or fanboy.

    So many ‘jounalists’ have this irrational ‘Mad-on’ for Apple. It’s beyond pathetic. You’d think that after so many years of the ‘let’s gang up on the underdog’, that some would want to break from the pack. You know, be trend-setters. Sheep. Of the Pigs, Dogs and Sheep variety.
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  8. Gillion wrote:

    “I’d call 8% pretty weak”

    Actually in a market as fragmented as the PC building business 8% isn’t weak at all.

    Below is the Gartner numbers for the PC maker businesses for 2004:

    Dell 16.4
    Hewlett-Packard 14.6
    IBM 5.5
    Fujitsu/Fujitsu Siemens 3.8
    Acer 3.4
    Others 56.4

    (Source: http://www.gartner.com/press_releases/asset_117925_11.html)

    When you consider ALL those businesses that buy PC’s from Dell, all those NAMELESS FACELESS office buidlings filled with THOUSANDS of DULL boxes churning away on their virus software and they scrape together 16%. Also remember that some of those Dell/HP/Acer boxes are even ending up as CASH REGISTERS!!!!

    If Apple has a 3.5%-4% market share in this total market and 8% in the HOME PC market then this is a SIGNIFICANT PC business. This is what people miss about Apple Mac HARDWARE market share.

    Even if you take it to be 3.5% it is a SIGNIFICANT player in the PC building business.

    However the CRIME is that Windows is loaded on most (almost all) of those PC’s from other makers, so in that respect the 3.5% TOTAL market share for OS X is a bit small.

    However, ask software devlopers that write for Windows AND Macs, and they’ll tell you that Mac OS versions make up up to 15% of their business.

    That is because most BOXES in office buildings are loaded with Word, Excel etc and that is PRETTY MUCH IT. Cash registers have even LESS SOFTWARE LOADED ON THEM

    However Home computers generally have more user purchased software and Macs have a bigger share here, hence the shift.

    Also I BET Microsoft have a bigger than 3% of sales come from the Mac BU for Office. It is well known that a large chunk of Office installations in Asia and also in the more developed nations is pirated.

    So now we see that the rubbish about 3.5% market share meaing Apple is going out of business is total CRAP. You never hear people wondeirng if Acer is going out of business.
    ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    Luke

  9. Strange, Apple has 8-16% of the home market, and it’s weakness is a quibble. Yet Creative has similar market percentages in the MP3 player market and it is derided as being also-ran, weak, and <insert derogatory comment here> by same folks…

    Double standard?

  10. Realist: This story is originally from The Guardian in London, which claimed it was an “exclusive interview”, a claim they are unlikely to make if it were fabricated. Also, if you are in Steve’s position, being asked similar questions again and again, you tend to give very similar answers. It’s easier and better to use the line you’re comfortable with than think up a new one every time…

    If it were that easy to be a hack journo, you’d already be one. You have all the talents: verbose and off target. Meanwhile check your sources at Bobbie Johnson’s blog http://blogs.guardian.co.uk/global/bobbie_johnson.html

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