Apple is not the new Microsoft

posted by Jeff | Tuesday, September 11, 2007, 3:38 PM | comments: 5

I noticed the PC World editorial proclaiming that Apple was the new Microsoft (via this blog), and I swear the mainstream press will print anything these days.

I've gone on record time and time again about how much I care about, and love using, Microsoft's development products. I can indirectly credit everything .NET with owning a hot tub, and ironically enough, at least $7k in Macs, iPods, software and an iPhone.

Aside from the Xbox division, which is unfortunately too focused in its reach, Microsoft has little to offer me. They become more irrelevant every day. It's unfortunate I think, because while they're doing great things for developers and hardcore gamers, they aren't doing much of anything useful for consumers at large. Having a guy at the top who dismisses everything that doesn't have a Microsoft logo on it doesn't help with the perception either.

The editorial is very nearly a steaming pile of link bait. It's barely worth linking to because it so fundamentally misses the reality of what the two companies do, or what they have in common. So, for giggles, here's why the piece is just plain wrong.

First off, there's no secret about the link between iTunes and iPods. It's not some unknown gotcha. Certainly Apple had to make some concessions to the record companies to sell music at all. But you know what? Their system works where every other one has mostly failed. If they were hell bent on keeping this "monopoly," as Elgan puts it, do you think they'd be pressuring the record companies to go DRM free? I'll refrain from citing the number of iPods sold to the number of iTunes songs sold, and how it results in a handful of songs average per iPod, but it's still a valid stat. And if consumers weren't OK with it, they wouldn't keep buying music.

And what kind of comment is this? "At least with Windows, you could reformat your PC and install Linux or any number of other PC-compatible operating systems." Who does that? And who would want to do that with an iPod? That's the most asinine "proof" of Apple being a monopolist I've ever seen. I'll say it again: Consumers just want stuff that works. Don't be a geeky moron.

There's a rant about FM tuners or something, but there's nothing to respond to there. FM was killed by Clear Channel years ago. Listen to the music you want, and download some podcasts.

He goes on to rant about pricing on all kinds of fronts, but yet he freely admits being an Apple addict. Is Apple scoring killer margins on its hardware? You bet. Of course, the analysts leave out the R&D costs for the products, but I'm sure they're still doing well. That's what I love about Apple as an investment, in that they're not trying to compete with commodity crap. Their "low end" is still a premium product for similar business lines (see MacBooks versus mid-level Dell laptops, for example).

More to the point, Apple charges what the market will bear. People pay it if they can, even when there are less expensive alternatives. Why do you suppose that is? Because Steve Jobs is charming? Perhaps, but I'm willing to bet it's more because people like the experience of using these products better than the cheaper alternative.

The "copycat" nonsense is laughable. Great, Microsoft has Surface. My ATM has a touch screen too. What does that have to do with the iPhone? A million phones sold, and Surface is, what, not even available, and not going to sell in any meaningful numbers? I especially love his mention of the Zune having Wi-Fi. Yeah, what is it good for again? That's what I thought.

Frankly, I'm thankful that Jobs is bullying people in Hollywood. That's the way it should be. Hollywood has been bullying tech with a fraction of tech's revenue for decades. That's entirely backward. Bullying the media companies to price their stuff at points consumers will stomach, that's a good thing for consumers. God knows they've been incapable of doing it themselves.

Now, the part where it all stinks like link bait: "You see, my point isn't that Apple's growing bad reputation is deserved, but that Microsoft's wasn't." So now he loves Apple. Whatever. Microsoft's reputation was well deserved for pushing years worth of crap on us. Even us developers, with years of COM+ and DLL hell and, the biggest atrocity, Visual Basic. We can overlook all of this now because in developer circles we have .NET, consumers have OS X, and geeks have Linux. Microsoft's sins are irrelevant.

Just don't for a moment tell me that Apple is getting a free pass when Microsoft was criticized. That's not comparing the same things.


Comments

Carrie

September 11, 2007, 8:23 PM #

Yeah, I usually stay out of these discussions because I am so grossly uneducated about such matters compared to the likes of you. But I have to agree, the premise of this whole editorial is wrong-minded.

Comparing a new monopoly to an old monopoly that is still in the market is just silly. There can't be a monopoly if both are competing with each other. The competition isn't as broad as the consumer might like, but it still exists.

And as far as creating software to be compatible only with the parent company's hardware, who cares as long as like you said, the consumer still has options? I don't have to buy music on iTunes to enjoy my iPod. That's my choice.

The last point I cannot agree with you more about is that the average consumer will pay what they can afford for technology that is functional and user-friendly. Simple as that. I don't want to have to read a manual to work my gadgets. Lazy? Sure. But it is my reality nonetheless.

Give me something that is easy to use that meets my needs for an affordable price and I will buy it. Package it up with compatible software that I don't have to search for or learn about, and I am in heaven. That's not a monopoly, that's common sense development and marketing for the mass consumer.

Gonch

September 11, 2007, 8:58 PM #

Not going to comment on anything but one little piece, because it's something I actually have an opinion on:

"Frankly, I'm thankful that Jobs is bullying people in Hollywood. That's the way it should be. Hollywood has been bullying tech with a fraction of tech's revenue for decades. That's entirely backward."

I couldn't disagree more. It works because Hollywood is the content provider. Without the content most of the tech is useless.

It's actually one of my pet peeves.

YouTube without the world providing free content? Useless.

iTunes without the movie and music industries proving content? A storing house for second rate, home-made entertainment.

MySpace without the masses? Nothing but code.

I understand that I'm a dying breed when it comes to this, but the shift of importance from content to delivery really devalues the work of content providers on all levels.

I also understand that in an increasingly tech-ruled world that the best means of distribution are these tech-based outlets, but at best it's a "scratch my back and I'll scratch yours" scenario.

In the end, the content would get to people without the tech, but the tech is nothing (in many cases) without the content.

Jeff

September 11, 2007, 9:39 PM #

User-generated content and Hollywood are not even in the same ballpark. YouTube exists because of the assholishness of Hollywood.

And remember, Apple is not in the business of selling content, they're in the business of selling hardware. While they do like to brag, the margins on the iTunes store are thin. It's just a part of the ecosystem designed to sell hardware.

Gonch

September 11, 2007, 10:10 PM #

True on both counts.

But the I suspect content available on iTunes goes a long way towards selling the iPods.

Jeff

September 11, 2007, 10:42 PM #

Sure it does, but Apple had to concede to DRM, which they've taken the stance is not what consumers want. And they've managed to convince two labels so far that they'll sell even more without it.

There's a long history here... DRM, broadcast flag, Betamax... these are all conditions and casualties from the entertainment industry telling consumers how to use their content.


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