Mac Greer interviews tech guru Bob Cringely, employee No. 12 at Apple, for The Motley Fool. A few choice snippets from Cringely:
Apple will stop making iPods the day that they can make more profit from an iPod license than they can make from selling an iPod. And that day will come. A switch will flip, and suddenly you will be able to buy an iPod from anyone, and Apple will just be in the iTunes business, but they will be making money from Apple IPE [intellectual property enforcement] and iPod licenses.
I think Microsoft is not stupid. Microsoft is big and lumbering and brutal, but they are not stupid, and what they know is that they have more resources than anyone, and they are fully capable of doing some little Zuney thing that is relatively meaningless except that every potential competitor has to take it into account. So Microsoft spends $500 million developing the Zune. Five hundred million is nothing to them, and they spend that much marketing it, which again, is nothing to them. And Apple and Samsung and all the other guys have to respond to it. In the meantime, what is Microsoft’s real strategy? Microsoft’s real strategy in the home has to be built around Xbox, and Xbox is actually doing some smart things, so I view Zune as a deliberate distraction; it is a decoy.
Full interview here.
Never confuse stupidity or the lack thereof with ineptitude, hubris, and mismanagement. With Zune, Microsoft is simply reinforcing their reputation for making mediocre products. Regardless of the amount, that’s not money well spent.
@ John
“Given time Zune will be a success.”
Yeah, and given time George The Chimp’s (TM) ‘Invasion of Iraq’, a sovereign country will be a success.
I give them equal chances.
0.
Impeachment, anyone? For the most drunken-sailor spending (liberal) in the history of our great nation?
wow…this is quite possibly the dumbest thing I’ve ever read at MDN.
With an infinate number of m$ employees led by an infinate number of balmer clones and advised by an infinate number of cringley clones, they will be able to make a……..hmmmm……they will be able to build a……hmmmm
they will be able to pay….all of the E.U. fines
“‘ve never understood why anybody pays any credence to anything that “Bob Cringely, employee No. 12 at Apple” has to say. He has been so wrong so many times that “Bob Cringely, employee No. 12 at Apple” seems to be making it up as he goes along….for a laugh.”
Can anyone do some research to see if Bob was “ex-employee #1” at Apple?
Of COURSE the Zune is a decoy.
That much is painfully obvious.
But think like Steve for a second, and you realize…
The iPod is *also* a decoy.
-c
MW: ‘using’ (the market to change the world)
“Microsoft is big and lumbering and brutal, but they are not stupid”
TOTALLY AGREED.
MS understands that hardly anyone can touch them in terms of resources (not Apple, nor Sony) and they will use those resources to crush the competition. It honestly wouldn’t surprise me to see Zune take 20-30% of the PMP market, then see MS abandon it in 10 years. (Or stop marketing/upgrading it’s features when the next big thing comes along.) And despite not being #1, MS would be very content gaining 20-30% of the market with Zune. Their mindset isn’t to prove that they can create exciting products that no one has ever dreamt of, but instead to prove that they can enter any mature market and turn it on its side with their presence.
They’ve done it so many times. Internet Explorer gets a 90% market share, then MS doesn’t upgrade it in 5 years. Microsoft OneCare forced security suite developers (McAfee, Norton) to consider lowering their prices. XBox 360 persuaded independents – meaning people who hadn’t yet gotten a game console (aka potential Playstation owners) to buy the Microsoft hardware instead.
Of course, to be fair I can’t totally discredit Microsoft for everything. XBox Live is downright incredible and the Zune’s Reverse-Sync feature is something that EVERY portable media player should incorporate.
How can people be so completely wrong? I would hang myself if I wrote this article.
They spent 500 million dollars on developing a MP3 Player…and this was the best they could come up with?
500 million dollars and they come up with a Brown brick size MP3 Player?
I’m speechless.
Best review ever.
I have several problems with Cringely’s conclusions.
1) Steve is too much of a control freak to let another company have final say on the presentation of a product that everybody associates with Apple. He couldn’t stand the idea that somebody else would release a substandard product that would end up making Apple look bad. At least if it is Apple releasing a substandard product they have the means to apply some form of damage control. Not gonna happen as long as Steve is in charge.
2) The combined positive effects of each iPod sale go well beyond profit per unit. Each iPod is a tiny marketing device, ambassador and evangelist for Apple. Every time the use of an iPod is appreciated it creates a positive vibe for the company. Every time a potential customer goes to an Apple Store to look at or buy an iPod they also are presented with the opportunity to bask in the light of the combined goodness of a range of Apple and third party iPod accessories, not to mention being exposed to the iPods equally sexy but much more astoundingly capable big sisters (or brothers, whichever strikes your fancy) the range of Apple computers and OS X and iLife and iWork and everything. By beholding we are changed, and that kind of subtle traction to gain mindshare does not show up on any profit-per-unit analysis.
Giving that away would be a huge mistake. That is the kind of big-picture view of the Apple Eco-System (Economy, not Ecology) that Steve and others close to him envisioned years ago, and that single-focus folks just don’t understand. Right now they control a large share of the experience and can thus insure the quality and protect their brand. Any erosion of that is not likely to serve them well.