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Apple’s Newest Failure

September 4, 2007

Remember when Microsoft CEO Steve Ballmer said Apple’s new iPhone had “no chance” of getting significant marketshare? If you looked closely you could see the sweat running down his temples as he said this, because he probably knew this would happen.

By the way, Apple’s newest failure will be introduced tomorrow at 10am Pacific.

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  1. I figured it would do well, but not as well as it did. Props to the Apple marketing team. Seems I can’t go more than two TV commercial breaks without seeing another iPhone ad.

    Side Note: Ballmer is a nitwit. I was at a large networking conference in D.C. last week where a good deal of time was spent bashing Microsoft for once again failing to implement any sense of order to their CIFS protocol in Vista. MS touted their changes to the TCP stack for Vista, but the joke is on us because long as they leave CIFS to run like garbage, the TCP adjustments are of little use. So network engineers like yours truly are stuck asking our companies to pay money for solutions that circumvent Microsoft’s inferiorities.

    Their programming blunders (incompetencies really) have created more successful cottage industries than anyone else I can think of. And they wonder why people look for alternatives…


  2. I think a surprising number of people do not understand Apple’s iPod/iPhone success. Many of their competitors sure didn’t. I think they looked at the iPod specs, looked at their own product specs, and figured they were in pretty okay shape. They simply did not get it. I think some of them still don’t. And I believe the same thing is happening again in the mobile handset industry right now.

    And, no, the success of the iPod and iPhone isn’t “marketing” or empty glitz in the product itself. It’s user experience.

    If look at the number of cell phones out there it boggles the mind to think that the majority of them have some kind of email, web and messaging capability – but the majority of people holding these devices do not use these features. Because they are too hard to discover and too hard to use. The user experience is broken.

    Apple comes along and does what they do best: they recognized what was broken and fixed it. Meanwhile Palm and RIM are scratching their heads and wondering why people aren’t buying more of their products, because after all it has X megabytes and Y gigahertz. Then maybe they figure it’s all about the marketing, so they try to launch slick ad campaigns, but that doesn’t work. Then maybe they figure it’s all about fashion and sex appeal, so they go to their case designers and say: make it black, make it thin, make it shiny or whatever. That doesn’t work either. They don’t understand Apple’s success and they don’t understand why they fail.


  3. As for the iPod, the success is largely marketing. I have used iPods, but I’ll never actually buy one. They’re more expensive and technically inferior compared to competing players. It’s all about being hip and “in” with those things.

    For the iPhone, I’ll reserve my judgment until I actually get my hands on one. But I can tell you that businesses are not buying them. There are known security flaws in iPhones that are not present in devices like the Blackberry. The web interface on Blackberry’s does suck, but I think the email functions are outstanding.


  4. Apple doesn’t make products to please corporate buyers or IT departments. It makes products to please consumers. Microsoft, for good or ill, does the opposite.


  5. Apple does market their products very well. iPods are OK, but the competition has caught up in features and price. I would buy a Sandisk Sansa e280 (8GB) before I would purchase an iPod nano. Bigger, brighter display, FM tuner, plays more formats, customer replaceable battery, costs $40 less and does not have the music library transfer restrictions that Apple imposed on the iPod product line. In light of this, many still buy iPods – they have become the “Jello” brand recognition of MP3 players. As far as Microsoft executives predicting the success of competitive products – what else are they going to say? I’m not defending their comments, but you know they are not going to comment favorably on the competition, especially when they have missed the target with their products.


  6. I would buy a Sandisk Sansa e280 (8GB) before I would purchase an iPod nano. Bigger, brighter display, FM tuner, plays more formats…

    I think this fits in quite well with my earlier comment: “Meanwhile Palm and RIM are scratching their heads and wondering why people aren’t buying more of their products, because after all it has X megabytes and Y gigahertz.”

    Some of your information is a day out of date, too. The Sandisk unit you’re referring to does have some interesting features, but the screen is smaller than the Nano and the unit itself is larger. For details on what’s new see:

    http://www.apple.com/ipodnano/

    But that’s nit-picking. What it comes down to is the fact that Apple has engineered a superior user experience. That’s what people are buying. That’s what Sandisk, Motorola, Microsoft and others either aren’t understanding or aren’t able to compete with.


  7. It is all about brand recognition. The iPod is the Coca-Cola of our day. When flying on a plane they do not say “turn off your MP3 players”….they say “Turn off your iPods.”

    One could say that the iPod is a marketing success (and it is), but behind it is a revolutionary product that keeps getting updated. The new Touch iPod with WiFi is just another example (albeit highly predictable).

    And yes, the iPod is pricier than most other brands. This is typical Apple…make it highly usable, very sexy, and charge a premium. This is what Apple has always done when Jobs is in command. In the mean time, every other consumer electronics company, as Scott said, sits back, scratches their combined heads, and tries to keep up.


  8. It is all about brand recognition. The iPod is the Coca-Cola of our day.

    I don’t think that’s true. Coca-cola is a product virtually indistinguishable from it’s competitor products. What differentiates it is primarily it’s branding: packaging, advertising and so on. Not so with Apple products. They are substantive differences in the product well beyond packaging and advertising.

    As you say: “behind it is a revolutionary product”. That’s why it’s not Coca-cola or a mere “marketing success.”

    Thinking that way is one of the traps Apple’s competitors keep falling into, and one of the reasons why they can’t compete very well in this space.


  9. What it comes down to is the fact that Apple has engineered a superior user experience.

    Where the iPod is concerned I have to strongly disagree with you. I have used them, and like I said, I’ll never pay a penny for one (of the flavors so far released anyway). It is about image. People see & hear the hype about others using the iPods, then they go out and get one without even trying the other brands. I’ve actually converted a couple of people off of iPods once I showed them what my Sansa can do – and at a fraction of the cost. The responses were along the lines of: why have I been wasting my money on iPods…?


  10. I don’t think anyone else has a) a well-stocked music and video store with a pricing model people like, and restrictions people can live with, b) high quality jukebox software that’s easy to use, c) eminently carryable devices with interfaces that are a pleasure to navigate. Apple has a whole experience, start to finish. When you put a competitor’s device in someone’s hand and say “it can play two more video file formats than an iPod can!” it doesn’t really make up for it.

    Music subscriptions? People don’t want to rent their music. It plays video? Cool, where do you get such videos? Nowhere convenient, often enough. And the software and controls are reminiscent of your average $50 cell phone.

    It’s certainly true that Apple has a very strong brand, and the iPod itself does, too. It’s true that the success of the thing becomes a force that furthers its own success. But as long as competitors believe that it’s “just marketing” or “just branding” or “just fashion,” they’ll keep right on failing.

    Christ, don’t even get me started on the Zune.


  11. Some of the iPod competitive advantage may be due to patents and copyrights preventing the competition from creating knock-offs. This also implies that they were the first to recognize and create the features. I think Apple is innovative and understands the consumer market better than much of the competition, but they are also far from perfect. You (Scott) put Apple on a pedestal and your bias is obvious. Their designs are not perfect including the premature battery failures on iPods which are only replaceable by the factory and the pain in the ass restrictions on transferring your music library from one PC to another. The quality of the sound engine in iTunes is average as compared to other mp3 software. I own a 40GB iPod, pre-video version. The only reason I bought a 40GB was to load wav files since I really do not like the poor sound quality of mp3. iPods also do not play lossless flac files. This was the only large capacity player on the market at the time.


  12. You (Scott) put Apple on a pedestal and your bias is obvious.

    How? Where?

    the pain in the ass restrictions on transferring your music library from one PC to another.

    You mean the “you can only have this on five other computers” restriction?

    iPods also do not play lossless flac files.

    They do play uncompressed files from CDs and they play losses AAC.


  13. The video argument is invalid. People don’t watch video while jogging. They don’t watch video while riding a bike. They don’t watch video while walking to work. They don’t even watch video on the subway, bus, or airplane! This is what I have observed of iPod users. They use them for music. And when it comes to music, iPods are a rip-off. The notion of watching video on a tiny little screen seems like a total waste of time.

    People don’t want to rent their music.

    Actually, I do want to rent my music. I have been able to save literally thousands of dollars (in just about the last 18 months alone) by “renting” my music instead of having to pay 99 cents for each song. It would take me almost 10 years of paying monthly subscription fees to Napster to catchup to what I would have spent buying each of those songs from iTunes. And for the occasional song that I do wish to “own” – competing players allow you to do that too. I can buy these songs from Napster if I wish to.

    The dirty little secret is that if iPod did not allow regular mp3’s to be played on them, few people would buy them. I’ve seen some playlists on people’s iPods. Then you start doing the math. Gee, you’re 20 years old and probably make about $16k/year while working part time through college. But you somehow managed to get fifteen thousand dollars worth of songs onto your iPod.

    Things that make you go “hmmmmm”. Something tells me that if I check their iTunes accounts I would not find $15k worth of music purchases.

    Yes, they could put that same amount of pirated songs on a competing player that costs hundreds less and has the same sound quality. But then they wouldn’t “cool”. So you see, the iPod is about image. 😉



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