What’s Coming Next?

by James R. Stoup Oct 17, 2005

Lets review what Apple has done recently, shall we? Because they have been quite active lately. They discontinued one of their most popular products, the iPod Mini, even though it showed no signs of needing to be replaced. Then they unleashed the iPod Nano on an unsuspecting world and it quickly became the newest, bestest, greatest, most wonderful thing since sliced bread. The clouds parted, the sun shone and angles sang when it was released. Not a company to rest on its laurels they promptly released iTunes 5 and with it added a new look to the interface.

But wait, we’re not through yet! Now the fun is really starting because next out the door is the Video enabled iPod, a new version of iTunes (version 6), movie downloads and new iMacs. That rounds out the announcements on the 12th, however we can’t forget the financial reports coming out of Cupertino which indicated that Apple has quadrupled its earnings from last year. Oh, and they are also selling more Macs and iPods than ever before. In short, the look like they are firing on all cylinders with no plans on stopping anytime soon.

So, here is my question. If you are a competitor what do you do? How do you compete? Because Apple has been all over the board lately and they have been succeeding wildly in everything they do. Part of the reason that no one is going to be able to catch them anytime soon is because there isn’t really a company out there that brings the necessary resources to the table like Apple does. The exception being IBM but they aren’t interested in competing with Apple (read Lenovo) and are operating in a different space. Here is a look at some of Apple’s competition.

Any MP3 Player Maker
Virgin, Creative, Rio, Sony it doesn’t seem to matter who is making them they all suck. With the exception of Sony none of the MP3 player manufacturers are going to have the bankroll to compete with Apple in the long run. Additionally, Sony is the only one who could hope to make a piece of software comparable to iTunes. Everyone else in this market is floundering as they watch Apple for cues. This latest announcement detailing the Apple + Disney deal is just the latest nail in the coffin. In fact, whatever meager market share these competitors had can be kissed goodbye in the coming months.

On the software side they could theoretically compete with Apple. But remember, they don’t do hardware (we aren’t counting the Xbox because it isn’t a PC) so they can only control half of the consumer’s experience. Here Apple has the advantage in the “Media Computer Entertainment System” market because they control the entire widget. In the future MS could make the Xbox into a general purpose computer/game system but that will be years down the road. So, in the meantime they don’t have the resources to directly force Apple’s hand or otherwise compete with them.

Dell, HP, Acer etc.
They have Microsoft’s problem on the flip side. They do hardware but no software. Thus they have to depend solely on Microsoft for the software to compete with OS X. Clearly they are SOL. Even if they manage to make a PC as stunning as the new iMacs they will still lose on the software side. A side they can’t control at all. Thus they are in an even worse position that MS.

Music Labels & Movie Studios
They have finally begun to realize that the opportunity for them to seize onto this new wave of technology and ride it to greater profits has passed. Instead they have forfeited their position to Apple, and thus have been locked into Apple’s system for as long as they dominate the market. When will that change? Not any time soon I have a feeling.

Additionally, in the future I think Apple will ultimately force Sony to realize that working with them is so much more profitable than working against them. So, look for Sony to relent in Japan with the ITMS. Furthermore, expect them to quietly phase out their MP3 business as time goes on. And of course they will eventually strike a deal much like Disney did. But that will take a bit of time as yet.

So, with no company around that possesses all of the needed resources around to compete with them, I think that Apple will continue to dominate any new market they become involved with. Only if MS started making hardware would Apple really experience a dangerous competitor. Until then I shouldn’t think they will have any real trouble.


  • Well, only time will tell.

    Bad Beaver had this to say on Oct 17, 2005 Posts: 371
  • I disagree, partly for the sake of disagreeing, but because Apple has made its fair share of stupid decisions, and history does in fact repeat itself.

    Microsoft will never relent on its share of the OS market. At least, not anytime soon. Vista is generating a LOT of hype, and for the sake of competition and innovation, I hope it’s good.

    So long as Apple’s prices are higher than the typical PC manufacturer’s, Wintel (or WinAMD) boxes will sell better. Even after the Intel switch I expect Apple’s prices to be higher because you’ll be paying for the Apple brand and design.

    I don’t neccessarily want to be a nay-sayer for my favorite computer company. I mean, I fully intend on going four to five thousand dollars in debt to get a PowerMac before the end of the year… Especially if these new ones are truly Dual-Dual with DDR2, better SuperDrives and PCI-E in place of AGP. If that’s all true, consider my pants messed.

    Waa had this to say on Oct 17, 2005 Posts: 110
  • Well, the fact that Microsoft doesn’t make the hardware and DELL/HP don’t make the software didn’t really stop them in the past now did it?

    If people have a choice between 20 different media centre PCs with different capabilities and prices, which are all compatible with one another and have the familiar M$ logo, or just 1 product from apple that is incompatible with the rest and costs more, I wonder (in the long run) which one they will choose.

    iPods are different, because it’s was vastly superior from the beginning and is a gadget that has gained ‘cool’ status. Boxes to put under your TV are rarely regarded as cool, and as nice as an iMac with front row is, it’s not vastly superior to the alternatives.

    Apple’s only hope is to try and leverage the installed base of iPod users. Give us a box to sit under the TV which runs Front Row and pulls content wirelessly from ours macs, and which has a dock/slot built in to connect an iPod.

    Oliver had this to say on Oct 17, 2005 Posts: 15
  • I the last sentence of my previous comment i should have said “pulls content wirelessly from our macs/PeeCees”. Otherwise Front Row doesn’t have a hope in hell.

    Oliver had this to say on Oct 17, 2005 Posts: 15
  • Are those singing angles acute, obtuse, or right?

    ewerickson had this to say on Oct 17, 2005 Posts: 1
  • While MS will maintain a high market share Vista will pose a problem at the lower end, simply because it is going to need more horsepower to run at a decent level.  Companies like Dell that have used integrated memory are going to find that the consumer wants more than that at the bottom end of the range, which will benefit Apple.

    There will not be a huge shift, but Apple’s share in the consumer market is going to continue growing at a controlled rate, as will Apple’s profits.

    What will be interesting will be the battle of the OSs.  MS has a huge bet on Vista and needs to deliver.  Apple is running full speed with Tiger and the next generation will be out in time to drive MS nuts with one or two new features that MS won’t be able to slip into Vista before it ships.  This is going to be fun to watch, especially if OS X runs faster on a Mactel than Vista does on a PC.

    MacKen had this to say on Oct 17, 2005 Posts: 88
  • #5 beat me to it, I was going to ask to what degree the angles were singing.

    undawater had this to say on Oct 17, 2005 Posts: 1
  • To ewerickson & undawater,

    3 Things:

    1. Obtuse
    2. 103
    3. Bite me

    I spent the weekend down at Nags Head, North Carolina flying kites and having fun. I then drove home for 2 hours, imeadiately sat down at a computer and wrote this entire article in 30 min. So, if I made one spelling mistake I think that is quite impressive considering by the time I finished this thing I had forgotten what point I was trying to make. But thanks for keeping me on my toes.

    James R. Stoup had this to say on Oct 17, 2005 Posts: 122
  • There’s going to be some slick Linux distro that slides in quietly and has too many cool features to be ignored, that will knock the consumer market off balance again. I think it will happen in the next year or so, when someone who cares about consumer money steps up to the plate and fortifies a distro like Ubuntu. Coupled with the retail power of companies like Wal-Mart, Circuit City, Best Buy, and Sam’s Club for distribution these machines from(place company name here) will reach the masses in a way that Apple can’t seem to pull off. This distro will take the time to get onto the iTunes wagon somehow, possibly by teaming up with some WINE developers and getting the Windows version to run in addition to including native iPod support.

    I think once Vista rolls out and some people get a taste of the old look because it won’t run the fancy new window manager on their older machines, they’ll get mad and go looking for alternatives. Whoever can catch these folks and woo them with their toys at retail will grab their cash. This would be a fine time for Apple to have a single processor, middle of the line headless tower waiting to take their $800-900-in the can and ready to go. It’s hard for some people to give up what they have(19” flat panel cool keyboards/mice etc…), but the mini just doesn’t have the power of a full size desktop.
    I’m not buying anything for some time, so I’ll be floating around in my 2 year old powerbook waiting for the waters to calm down a bit. Who knows, maybe I’ll get lucky and pick up a mini for the kids to play with. =)

    g4m4nn had this to say on Oct 17, 2005 Posts: 4
  • Though Sony might see the wisdom in working with, and not against, Apple on the iTMS side of things - it’s silly to think they will ever up and leave the mp3 player business no matter what Apple’s share of the market ends up being.  This is a company that stuck by Beta up until just a year or so ago, stuck with MiniDisc LONG after anyone cared, and is right now in the process of developing an High Definition Disc standard that ultimately no one but them will ever use (just a prediction, no flames please - I honestly hope Blu-Ray is the clear winner but I have my doubts).  So why on earth would they drop a market they can easily control a small share of?  I mean, have you seen the Atrac-based software they put out on PC’s?  This stuff is absolute junk compared to iTunes, WMP, etc. - it locks up, it’s slow, it’s unfriendly to use, etc. but they still keep churning new versions of it out for new Vaio PC’s.  Though I agree they have the money to keep competing, I disagree that they’ll ever throw in the towel.  They are the single most hard-headed electronics company right now, and have been for the past 20+ years - that won’t change anytime soon.

    dickrichards2000 had this to say on Oct 17, 2005 Posts: 112
  • Macs are it, atleast in my estimation.  Let me compare it to the US automotive industry.  PC=American and Mac=Toyota, Honda ect.  The Mac is built to last while the PC is completely unstable. Macs are built to last and people are drawn to them, PC’s are built to break down so that the Fat Man can stuff his pockets.  I cringe just as much from looking at PC than I do when I look at a Ford or Chevy.
    I’ve had my eMac for a few years now and never once has it crashed, compared to my PC which gave me trouble every single time I booted up!
    Macs are the top of the line and have an awesome name behind them.  Let those that choose to buy junk recieve their do junk.  I will gladly pay quiet a few more bucks for a machine I love to sit down and work with.
    As for the iPods.  Great marketing strategy. I was wondering when they were going to get themselves involved with the generation that loves to have earphones stuck to their heads.  Again Apple did it right.  The only reason that I am not an iPod user is that I’m waiting to get one for Christmas from my wonderful and beautiful wife.  Are you reading this Honey?!?

    But hey, all my comments are my opinions, and what are my opinions worth?  A ministack?
    Peace Out!

    ogcposm had this to say on Oct 17, 2005 Posts: 3
  • #8, your #2 makes your #1 redundant. Great article tho.

    SaddlerB had this to say on Oct 17, 2005 Posts: 11
  • Even apple can make mistakes? Was the newton ahead of its time or not. Its all about market share. If apple has 4% and gains 1% more, they will please more users in 1 year than Dell has pi$$ed off in 3 months. iTunes is still the easiest software, and Apple GIVES it away! They have earned more users from free software then MS has with their (lack of) support of a buggy, bloated OS.  As far as momentum, by the time Vista finally rolls out and shakes the bugs away, Apple will the upper hand with the Apple/Intel boxes being the fastest available. Lastly, anyone get a virus in OSX lately?

    captkirk had this to say on Oct 18, 2005 Posts: 3
  • Its all about market share.

    If that’s the case, then Apple is an also-ran in the PC business and a monopolist in the mp3 player business.

    If apple has 4% and gains 1% more, they will please more users in 1 year than Dell has pi$$ed off in 3 months.

    I’m not sure what the point of this is.  One could also say that if Dell gains 1% more market share with the Dell DJ, they will have pleased more users in 1 year than Apple has pissed off in 3 months.  Yeah, that’s called dominating the market.

    They have earned more users from free software then MS has with their (lack of) support of a buggy, bloated OS.

    It’s all about market share.  And Apple has a fraction of the users that MS does.  A teeny, tiny fraction.  So it’s hard to argue they’ve earned “more” of anything.

    And I’m not sure I’d say one was more buggy than the other.  XP is as stable as OS X, although admittedly more vulnerable to viruses.  But that’s not the same thing as being buggy.

    As far as momentum, by the time Vista finally rolls out and shakes the bugs away, Apple will the upper hand with the Apple/Intel boxes being the fastest available.

    It will be nice when Macs actually ARE faster than PCs instead of Mac zealots having to pretend that they are.

    Beeblebrox had this to say on Oct 18, 2005 Posts: 2220
  • To this day XP has only ever performed in a more stable manner than OS X in a handful of cases for me.  On my home computers, and with daily maintenance, sure - it works just fine.  To everyone else I deal with on a daily basis it’s far from it and they really couldn’t care less WHY this is, be it bad drivers, virus/spyware, whatever.  They just care that it doesn’t come off as stable.  You can teach people to drive but most of them will never change their own oil - and when something goes wrong they ultimately blame the manufacturer, in this case Microsoft.  Right or wrong it hurts XP’s image and if something drastic isn’t done about it then it will hurt Vista’s image as well.  Probably not to the benefit of OS X in the long run, but I expect as many (or more) Bill Gates jokes as we’ve ever had after it’s release.

    dickrichards2000 had this to say on Oct 18, 2005 Posts: 112
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