Apple in position to own the digital home

Steve Jobs is “ringing your doorbell and pushing a sleek video iPod up against the glass pane. He’s got Walt Disney Chief Executive Robert Iger and NBC-Universal Television Group President Jeff Zucker in tow, each armed with baskets of digital content. It’s enough to thrill even the tiniest iPod devotees,” Monica Rivituso writes for SmartMoney. “In other words, Jobs is wooing you anew. It’s the same thing he’s been doing for years, only this time the stakes are higher, the technology is more sophisticated and the partnerships are all the more critical. We’re talking about the digital home, yes, but more importantly, we’re talking about who owns the consumer. And right now, Apple’s in an enviable spot.”

Rivituso writes, “Pictures, music and video aren’t new anymore. But what’s Apple’s bigger plan? Who is it up against and does it stand a chance? I’ve written about the battle for the living room and competitive lay of the land before. The players are still very much the same. Cable companies that control the set-top boxes remain best positioned, which is why Cisco Systems wasted little time in snapping up set-top box king Scientific-Atlanta (the $6.9 billion acquisition is pending). But the biggest shift comes from Apple: This is a company that’s stepping up its game. Big time.”

“The early days of the video iPod bear uncanny resemblance to the original iPod’s launch four years ago — but on a larger scale. Back then, Apple introduced a product that was deemed cool and piqued interest, but wasn’t considered an absolute must-have by everyone. Apple quietly put together iTunes, which catapulted the company to the market-share leader in downloaded music. Today, Jobs & Co. is inking deals with video content providers in the same calculated way. Mark my words: The full extent of this vision has yet to be revealed,” Rivituso writes.

“Of course, the computer maker known for supreme style is well-versed in expertly promoting its vision. But it’s also stumbled in the past by gripping its technology licenses too tightly, reminds Roger Kay, president of Endpoint Technologies Associates, a technology-research and consulting firm based in Wayland, Mass. Back in the ’80s, Apple had better technology and decent market share, but Microsoft steamrolled over it in part because it was willing to partner with any and every box maker to create a PC ecosystem,” Rivituso writes. “Apple is facing a similar situation today, according to Kay. Whereas competitors such as Microsoft, Hewlett-Packard are members of the Digital Living Network Alliance — the group that’s setting wireless and wired interoperability standards for PCs, consumer electronics gadgets and mobile devices in the digital home — Apple is not. True to form, the company is doing its own thing, says Kay, something he finds particularly irksome because it sets up a scenario where consumers will have to choose between standards. And that ultimately could create some major problems down the road. ‘I think at this moment they have to focus on developing the ecosystem and including everybody else,’ he says, later adding, ‘It would be some kind of Shakespearean tragedy for them to make the same mistake twice.'”

Full article here.
Apple can’t “make the same mistake twice,” since the business situation is completely different (see “The iPod is not the Mac, so stop trying to compare them“). And who really cares if Roger Kay finds Apple’s strategy “irksome,” anyway? Apple’s firing on all cylinders and just needs to stay the course, keep innovating, and adding content. Apple already has the de facto standard for legal online digital music (Protected AAC with FairPlay DRM) and is well on its way to establishing Protected MPEG-4 video as the de facto standard for legal online digital video.

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15 Comments

  1. I wouldn’t say Apple is firing on all cylinders. 4/6 maybe. Replacements for the aging laptops are needed as well as a clear vision of how to hook up a mac to TV and other content providers. I can’t beleive that most people will want to pay for video all the time. Cable and satellite have a good hold on the market because of the large amount of content available for a fixed cost. I watch more that 25 programs a month for the 50 bucks cable costs me. I’m sure most people want a mac + DVR to work with their existing TV output. I know I do.

  2. I’d rather Apple come out with their own methods that conflict with the “standards” set in place by M$ & HP. That way, when Apple’s way becomes the standard, it will actually be useable by the consumer and not just controlled by M$!!!
    If it were up to M$, windows would be the industry standard, and while it does control a majority of the market, it should not be mistaken as “the standard”. It is far too inferior to other options available to the average consumer, and we should all stand up for our right to use the most functional equipment at our disposal!

  3. “Microsoft steamrolled over it in part because it was willing to partner with any and every box maker to create a PC ecosystem”

    Microsoft software had very little to do with their success. It had EVERYTHING to do with IBM, the computer company, choosing it as their operating system and mistakingly not securing the rights to it. Once IBM picked them, and since the entire computer was built from off the shelf components, Microsoft could easily sell the software to anyone that wanted to compete with IBM.

    It is a different situation now. There is no IBM sitting out there to whom Microsoft can court. Apple is innovating unlike Microsoft ever did.

    It is a new world that Apple is winning and setting the standard for.

    MW “bed” as in there is no one for Microsoft to get into bed with.

  4. They are on their way to owning the video download market, just like they are with the music download market.

    When is the quality of the downloads (i.e. resolution) going to increase? If the music store song bitrates are any indication, then not for a long time (if ever). The 320×240 just doesn’t quite cut it for watching TV shows on a computer or TV. It’s nice, but I would much rather watch it in a nicer quality. I’m all for Apple, but I am hoping there is some competition in the near future that will force Apple to increase the quality.

  5. I just want something that works without having to study a manual for two hours. I still can’t program my VCR, its on the way out so why learn now? All entertainment media technology in sucks!!! Just like sex, live is the best way to do it.

  6. Misanthrope

    Are you talking about 25 episodes a years or multiple episodes of 25 programs? If the former is the case why pay for cable TV? Just pay for the internet access and save yourself some money. Alternatively just get the basic service with broadcast feeds only, if you just need those.

    As Quevar points out, video quality is important for TV viewing. To be a mainstream solution it will have to offer at least SDTV resolution and preferably HDTV quality. H264 can do this easily if enough processing power is available.

  7. Apple DOES support partners, its just that they don’t match the old model of doing things. Apple’s partners aren’t generic-box shifters but iPod accessories manufacturers, software developers (who seem relatively happy to compete in the same market as Apple) and content providers (music, videos, audiobooks). Apple even push THEIR (the partners) products on the Apple store and make money out of these sales. As an aside, I didn’t like their treatment of Code-Warrior, Kaleidescope, Watson, etc so they’re not perfect.

    This is not a repeat of the 1980’s. I remember, I was there! There are more and more markets Apple is claiming for its developers (high end digital photography, high end servers, high end movie production) yet Microsoft seem to be giving their developers less and less markets (Office, Exchange Server, anti-virus, games, mice, keyboards). I’m happy to keep developing for the Mac.

    MW: ‘value’ as in Apple values their partners. They just need to fear Apple less and go with the ride.

  8. Apple did not lose its way, because of a failure to license its technology.

    When Jobs was forced out (1985), MSFT controlled the desktop with DOS for crying out load.

    Apple lost the OS battle when IBM entered the fray against the Apple IIe PRO/DOS). Corporations, not trusting this new startup called Apple, bought IBM, a firm they had been doing business with for a very long time and trusted.

    Apple lost the OS battle when Compaq reverse engineered IBM’s BIOS, thereby creating the IBM clone/compatible market.

    When MSFT intro’d Win95, the war was already over. Apple only had 9% share when Win95 was introduced.

    Licensing the Mac OS would not have reversed MS/DOS’ dominance, because it was corporate America that made it king, not the consumer.

    Jeez, when will the “experts” get this right?

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