There is no love lost between myself and the Steve Jobs Megalomaniacal empire at the moment. But this is even more stupid than usual for that loose-mouthed, consumer-be-damned moron.
Companies compete on the basis of cost or value advantage over other products. Either they make a product at a lower cost than competitors (often at the expense of value), or they offer more value (which is measurable to an extent, but is more than just the difference in willingness to pay or WTP). A very few companies are able to compete on both – having a dual advantage over competitors.
For Apple, I truly wonder where they are in terms of strategy. As far as computers, margins are so ridiculously low that they can’t possibly be competing on cost. Every single bit of a computer is a commodity now – even the coolest part of any computer, whatever you may think it to be, is just a common item as far as accessibility and availability are concerned. Apple does have a value advantage, and they utilize this by getting away with charging more than competitors for similar products. Even so, the value difference is not enough to really make computers a meaningful source of revenue over time.
Speaking of revenue – the iPhone makes up 40% of Apple’s revenues. That’s almost unbelievable. And it is also a key component of Apple’s strategy over the past few years.
Maybe a week ago, the market capitalization of Apple exceeded that of Microsoft for the first time in history, dislodging the latter from the lofty perch that it has held for years and years.
To me, the significance of this is more about a “popularity bubble” that I think Apple is experiencing. There are a lot of intangibles for Apple, and one could argue that it is in fact more valuable than Microsoft in the long run. I think the value of intellectual property might be pretty close between the two, in reality, but Apple has begun moving into some markets (um…with the iPad) that are still growth markets.
The question, to me, is whether this potential for growth is worth as much as investors think it is. I’m really not sure. First, let’s acknowledge that the market for computers is flat and margins are basically zero. There is no growth in the personal computer market, no matter how many Macbooks and iMacs are sold. They just don’t make enough money off of each one. And, while Apple’s ability to adopt technology just before competitors (USB, WiFi, among others) is at times uncanny (and its marketing teams’ ability to hype the bejesus out of those advantages is just remarkable), it is probably also more expensive for them to be introducing those features before others.
So computers are a dead end. Portable music players are beginning to plateau, I wager (I haven’t looked at the numbers in a while), and IMO the inclusion of a video camera on the 5th Generation iPod Nano is a sign that designers are beginning to grasp at straws.
Portable media via innovative mobile devices…that’s where the iPod Touch, iPhone, and iPad come in. And it’s also why Steve Jobs is turning into Bill Gates.
This is a post I started…a while ago so it’s sad that I’m only getting to it now. Anyway…
Over the last few months at the viral and national marketing level, there has been a “war” going on about ATT’s 3G coverage. This has been fueled mostly by disgruntled iPhone users that aren’t getting the kind of data speeds they want. ATT’s coverage is spotty, it’s 3G coverage is even spottier, etc.
There have been protests held where users try to overload the ATT network (not best link, but wanted to provide something…) by using a lot of data-intensive apps all at once. Then Verizon has been attacking ATT’s coverage quite aggressively, with ATT striking back with their own advertising campaign.
The funny thing is…why is no one blaming Apple?
Apple was the one that said that
- the iPhone would be branded as an Apple product and initially (and for quite a while) sold at Apple stores
- would not be branded at all as an ATT product
- advertising for it would be for the phone, not for the carrier
- Apple would get a big cut of the sale price of each phone
Supposedly, when Apple approached Verizon and it’s huge network about this, Verizon refused. ATT acquiesced.
So if it’s Apple that forced the iPhone to go to ATT (heck, whatever if it ended up on T-Mobile or Sprint, which has even worse coverage in general?)…why keep blaming the provider? Why not blame the manufacturer that had such ridiculous stipulations?
Addendum: PC World did a test of data transfer speeds of the various carriers, and ATT came out on _top_. Hm.
Wasn’t it just 2008 Q4 that Apple announced that they had sold several million more iPhones than Blackberry units?