San Francisco Chronicle: Apple at risk of making the same mistake twice

“Jobs and Apple are still paying the price for losing a fateful battle with Microsoft in the 1980s. It was fought in court and in the marketplace, and at the end, Apple was left with an insignificant share of the very market one could argue it had invented, personal computers,” Dan Fost writes for The San Francisco Chronicle. “To this day, even as its stock and revenue soar, Apple’s computers are but a sparrow dodging the Microsoft hawk… In a way, Apple’s survival is remarkable… like a dinosaur living beyond the Ice Age. All the early PC-makers like Amiga, Commodore and Acorn crumbled, but idiosyncratic Apple hung on.”

“Even though Jobs has learned from his mistakes and has taken a somewhat different path [with the iPod], many others wonder if the company isn’t repeating history by focusing on the hardware and refusing to license its technology,” Fost writes. “In essence, that’s what happened the first time around: Apple dominated the market for personal computers, but Bill Gates struck a shrewd deal with IBM that allowed him to put Microsoft’s operating system on any computer. Makers of clones, including Compaq, Dell and Gateway, sprang up, selling computers much more cheaply than Apple and winning the business market in a runaway.”

Full article here.

MacDailyNews Take: How many hacks will recycle this silly old saw again?! The iPod is not the Mac, so stop trying to compare them. First of all, many people, including us, believe that Apple ended up with a vastly superior platform precisely because they control the whole widget. Now, 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 long ago, 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 in various formats. Music 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.

Related articles:
Analyst: Unlike Microsoft, Apple has the advantage by not licensing their technology – October 13, 2005
Tech pundit Enderle incorrectly compares Apple’s Mac OS to iPod licensing – September 01, 2005
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

47 Comments

  1. An important difference between then and now: Jobs is running the show not John Scully.

    Other important differences:

    The iPod is very competitively priced against other music players.

    The iPod is offered in a variety of models to meet the purchase limits of customers.

    Back in the old days, Apple hardware was extremely expensive, this left the door open for Windows based machines that were a fourth the price of Apples product offering.

    Todays Apple is positioned competitively with regard to price and no other brand can match the integration of iPod and Apple software.

    End of story. Another loser article hyping the same old tired uniformed crap about Apple. I hope this author enjoys his MS P.O.S,

  2. I think a lot of people out there still remember Apple as the computer company that nearly went out of business in the 90’s while Microsoft prospered. They still have the opinion today that Apple is that same company, still going out of business with a disappearing 5% market share. I would also say that that is one of the opinions that often stops people from buying a Mac as their next computer – that and the price. Whether they are right is another matter.

  3. I think Apple tried the licensing model in the 90’s, and I even bought a PowerComputing 603e tower (not a bad machine, better than comparable Apple model at the time) – but the problem is, it didn’t grow the market share of Mac OS. All it did was cannibalize Apples own hardware sales, and Jobs pulled the plug on this once he took the reigns back. These clone manufacturers weren’t competing with PC makers, but were competing with Apple. They advertised in Mac magazines, spoke to the already converted, and basically just skimmed the lowball buyers and in some cases offered a bit more. So, Apple sold the same number of OS installs, but fewer units of hardware… hardly a winning combination. I think Jobs saw this, and has a good handle on strategies. We’ll see what happens down the line

  4. “…like a dinosaur living beyond the Ice Age”

    Does this writer know how analogies work? Or is he retarded?

    Anyway, to correct it —

    like a dinosaur with robotic wings and alien weapons technology come back to kick the living shit out of an antiquated and cheap Godzilla.

  5. Ok this is the formua

    iTMS sells music because music is relatively cheap to produce and cheap music sells expensive hardware called iPods.

    It’s called a loss leader.

    However movies are not cheap to produce and require producers to charge a lot for them therefore cheap movies can’t be sold on iTMS to sell expensive video iPods.

    Furthermore, producers will not allow computers to have movies, even downgraded ones, to take away sales from their cable and DVD income generators. Unless of course computer makers can guarrantee the movies won’t be pirated, which they have been unable to do.

    So, we will not see a iTMS Movie Store, at least not in the volume of say Netflix. Because people are not going to pay for a expensive DRMEd to hell video iPod device AND expensive DRMED to hell movies, AND wait hours to download HD level contet over the internet AND cable companies who monoplolist the bandwidth won’t allow it.

  6. I just got done going through the Sunday newspaper and ads. I happened to be looking through Best Buys’s ad and found an interesting page. A huge X-box 360 is on the one page and connected to it is an [IPod NANO]
    It says “Plug your MP3 player into the XBOX 360 to listen through your TV or home theater system” There is no M$ “ipod killer” or any other “ipod killer” for that matter, just the Ipod made by apple on a M$ Xbox enough said.

    I type this on my powerbook not a dell or any other crap pc. Mac4life!!!!

  7. Every time I read one of these tired arguments…

    I can’t help but wonder how people, who spend 20 minutes a day driving a $50K Lexus to work only to spend 8 hours suffering through their day on a $399 Windows machine.

    I’ve told people again & again that they can avoid so much crap by just switching to a Mac. But they don’t listen. people get set in their ways.

    My nieces had windows type laptops during High School, then as soon as they were out of their parents care and in College, they got Macs.

    so, I guess there is hope.

  8. $250 overpriced white plastic, melt in the sun and get warped iPod Boombox.

    6 nano tubs in a box for $30 when you only need one or two

    Inferior quality Intel processors

    Numerous Mac OS X security issues

    Allowing Windows to run on Mac’s

    Expensive Apple installed RAM

    Noisy PowerMac G5 Power supplies.

    23″ Pink Apple displays

    Numerous Mac Book Pro issues

    Cultlike product fanbase

    Apple Stores that look like churches

    No 3D gaming, expansion options or video card upgrades in iMac’s

    Warped Alum Powerbooks

    Inferior quality Maxtor drives

    Hard drives not bad bit sector mapped from factory

    Mac Minitels have integraded graphics that can’t produce full HD on TV’s without dropping frames.

    Security updates that need security updates.

    Dropping Firewire from hardware so now we have to wait hours to load up our 60GB video iPods on slow USB 2

    Dropping Firewire 800 and a 400 port from MacBook Pro’s which make them almost useless for serious on the road video editing.

    Core Duo processors are still hot and burn the male crotch

  9. Why don’t these journalists write about how IBM dropped the ball?

    With the tie to mainframes, they could’ve gone for market share instead of profit as well, and if they had, they might’ve fended off the clones.

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