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ATPM 11.08
August 2005


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by Wes Meltzer,

Get a Clue

Business writers don’t get it. Neither do the pundits. What causes the enduring survival of Apple? Why do people buy Macs? Why do they carry iPods?

Ask an economist, and you get the unhelpful answer that people are acting against their own economic interest.

Ask a business school class, and you get the even less helpful answer that Apple has locked their computer market in, but that they can’t expand it, and they’re doing the same thing with the iPod.

It’s all about user experience, my beloved readers, and I’ve got a couple choice examples of it. But first, I want to apologize to you all.

An Apology

I know you all missed me last month. (Or not. Hush, you!) Unfortunately, my trusty PowerBook suffered a catastrophic hard drive failure, involving a certain author walking into his room to hear a loud “CLICK! CLICK! CLICK!” noise after a long day at work, and I lost every inch of my preparation for the July issue, including both last month’s Bloggable and a review of Boswell, now in this issue. N.B.: This column will be more bullet-point-ed than usual, because of the way Boswell treats entries. I don’t think you will mind.

You have my deepest apologies. It means, of course, that my most interesting remarks and links about the big Intel switch-over, were lost; like a plate of leftovers, I have some lukewarm “react,” in journalist-speak, as a service for those of you who party like it’s 1999. But, also like leftovers, they’re never as good as the first time. It also means the end of my eloquent, epic lamentation for the PowerPC—though losing said lament will probably add years to your life.

But that’s water under the bridge. And now, for something completely different!

You Just Don’t Get It

So, I said just a few lines ago that business writers, business schools, economists, and almost everyone else who insists on a numbers-based approach to the computer market just doesn’t get Apple’s products and their enduring successes: the Mac as a niche market and the iPod as a best-of-brand device. Here’s a sample from last month:

  • As everyone reading this column knows, the iPod is the most popular device in its market, by a long shot. “What must it feel like to be one of the iPod’s competitors?” I wonder from time to time. (I pity Sim Wong Hoo, Creative’s CEO, in particular.) Fast Company interviewed six corporate highers-up at Apple’s competitors in the portable audio market for their June issue, and asked them what it was like competing against an instant market leader. They have the answer: in short, it sucks.

  • In spite of their article about iPod competition, which makes this very point, Fast Company ran a fascinating article in their August issue, called “In Praise of Ecosystems.” In it, they demonstrate, like most business magazines, that they just don’t understand the success of the iPod (maybe John Sviokla should read Jennifer Vilaga’s notes from June). Oh, and they get their numbers wrong: they say the iPod shuffle isn’t a success. Fire your fact checkers, guys…I’m going to get up on my soap box here: the problem with the business-school perspective on this is that it completely ignores user experience. Sviokla writes:

    Throughout industrial history, open standards have enriched customers and fueled productivity… Likewise, the Internet, with its open set of tools for communication and presentation, provides standard parts for knowledge work.

    While that’s true, it doesn’t explain the real reason for the iPod’s success, which is, large sales numbers notwithstanding, not the iTunes Music Store. It’s user experience, Apple’s forte. Someone at Apple send John Sviokla an iPod, and let him play with it, and see if he still thinks in numbers.

  • Let’s spend more time looking at economic theory’s non-comprehension of the iPod and user experience. The latest instant-classic example? Free Napster. A student survey at the University of Rochester found that even when students have Napster service for free apparently they still choose the iTunes Music Store—at 99 cents a track. How many, do you ask? Yes, that’s right. 70 percent. The survey also found no students in the sample who had purchased songs from Napster to put in their permanent collection; for that, they turned to Apple. So much for brand loyalty. And, yes, it defies Economics 101. Why would you use Napster’s service but then buy the tracks outright from Apple? Oh, that’s right, the part of Econ they always forget, that people won’t pay for substandard products.

  • If you’ve been keeping up with this column, you’ve caught that Apple has been having a hard time getting Motorola’s iTunes phone into the hands of consumers everywhere. (If I were Jack Miller at As the Apple Turns, I would be joking about how this is just the Motorola curse. But I am not funny.) Since economists and pundits don’t think Apple can sell a $500 luxury device—they should ask HP about the $600 iPAQ hx4700—Forbes thinks Steve Jobs is be planning an end-run around the carriers. Cingular, Verizon, T-Mobile, et al., have balked at the idea that consumers might prefer not to pay again for their music. Jobs, their vision says, could beat them by making Apple into a mobile virtual network operator, or MVNO. They would lease time from one of the major carriers, just like Virgin Wireless or ESPN. And you’d get the iTunes phone. I’m not holding my breath, though; Steve Jobs seems like too much of a control freak to put the Apple brand on an infrastructure as disastrously spotty as any of the major cell networks’. (Can you hear me now?)

  • Any business consultant can tell you it doesn’t make sense to release a Mac version of your software; it’s only 5 percent of the market, after all, on a good day. Om Malik had a marvelous essay in Business 2.0 in March on why, in spite of that, it’s better to develop for the Mac. I confess that I missed it in the springtime, but now it’s here. He says:

    I think these companies are focusing too much on the numbers and missing the more promising opportunity. Why? Because rolling out a product for the Mac platform ensures a certain buzz and élan, which begets more buzz, which begets sales. Let me explain. According to Apple, there are about 12 million active Mac users. Not a lot, that’s for sure. But among them are most of the influencers—high-profile bloggers, most (if not all) technology journalists, and, of course, the hipsters.

    And just now, he follows up with the example of The Gizmo Project, which he says see 30 percent of its downloads for Mac users, way out of proportion for their numbers. Malik says it’ll only help The Gizmo Project.

  • Mac shipments rose in 2005. The sky must be falling in Rob Enderle’s office! (Though, to be fair, so did almost every other PC manufacturer’s.) But Apple’s numbers rose sharply, almost 35 percent. This has been interpreted, by Needham & Co., for instance, as meaning many Windows users are switching to Macs. Ars Technica fingers “the halo effect on new users,” which they say means many iPod owners end up buying Macs as their first computers.

The Big Switch, in the News

As I said before, I’m sure you’ve heard all about the upcoming switch to Intel CPUs in Macs. But now, we know that Apple and IBM are really getting divorced; and there’s lots of interesting news on that front.

  • The broken 3 GHz promise may be just a pretext for the big Apple switch, according to Hannibal at Ars Technica. (In fact, he notes that the technical people at IBM didn’t want to promise Apple 3 GHz anyway, since it couldn’t be done on 90nm fabrication without changing the architecture of the CPU.) What does he think the real reason is? Hannibal fingers Apple’s shifting focus:

    [W]hat Jobs is really doing is shifting the focus of Apple from a PC-era “performance” paradigm [the Mac] to a post-PC-era “features and functionality” paradigm [the iPod].

    Basically, they’ve taken away the ability to win on the performance front, since they were losing it, and now they’re going to compete on features alone. I’m sure Intel’s huge discounts help, too.

  • Hannibal at Ars Technica describes why Apple is starting the transition from PowerPC to x86 at the bottom of their line-up, as well as why they chose Intel over AMD and the psychological impact of losing the PowerPC.

  • In a nation of no-fault divorce, Apple and IBM are not taking the easy route. Oh, no, Apple is insistent that IBM has been cheating on them with Sony and Microsoft; and now IBM retorts that Apple’s philandering with Freescale, née Motorola is what cost them a deeper G5 line. I kid you not, Rod Adkins, vice president of development for the group that makes the POWER chips, says:

    They had Freescale primarily for the low-end and mobile solutions, and they really had IBM focus more on PowerBook, xServe and iMac. That’s where we collaborated deeply with Apple…[t]here’s really nothing in the architecture that prevents having an end-to-end line that can serve [all of] their needs.

    Makes me wonder, you know, why they didn’t tell Apple that. And whether it’s occurred to them that 3 GHz was a little bit important to Steve Jobs. Hmm. Let bygones be bygones, Rod; you have Sony’s and Microsoft’s vastly more lucrative contracts now.

  • Julio Ojeda-Zapata, the St. Paul Pioneer Press’ tech writer extraordinaire, reports that St. Paul, Minn.-based CodeWeavers wants to bring their toolkit for Windows software emulation in Linux to OS X. They’ve already got a successful product, CrossOver Office, that runs Microsoft Office applications in Linux without WINE, and there’s talk, Julio writes, of supporting games with their technology.

The iPod Keeps Making Headlines

  • Batten down the hatches, readers! It’s time for rampant iPod chatter and speculation! John Gruber notes, calmly, the change in the iPod lineup. Oh, the usual: color screens on all iPods, no more 40GB model, price changes on the iPod shuffle. The worst rub, though? He reminds us there’s no more Chicago—and offers up a correction on the state of Mac rumors today. In other iPod news, of course, HP announced that it will be rebranding the Shuffle as well, for the corporate consumer who just can’t get enough screenless goodness.

  • CNet reports that the Wall Street Journal (which got in ahead of the crowd on the Intel transition, FYI) is reporting that Apple is getting into the business of selling videos. Music videos, that is. For $1.99 apiece. As early as September. Business 2.0 adds that they have access to an internal Disney e-mail which suggests incoming Disney CEO Bob Iger wants Apple to license their content for a video iPod.

  • The Economist fingers Apple for turning another small-time product into a mainstream product. Look at their track record: USB, FireWire, MP3s, iCal files, and now podcasts. They write:

    So far, any confusion about the term or the process has not mattered much, because podcasting tended to be almost exclusively for the young, geeky, or both. Last week, however, that changed.

  • Sean Rozekrans, a new name around here, thinks the iTunes interface has gone stale. With the addition of podcasts (and, I’d add, the iTunes Music Store), it seems clear that Apple is just running out of useful space. It’s called clutter, folks, and it’s a problem. Twelve-step programs and all. Poor Sean, though, he still thinks Apple cares about iTunes’ UI:

    It’s all just minor tweaks to the interface and I don’t get it why Apple hasn’t thought of it yet. They are one of the most interface orientated developers I know.

My Sister Got Bitten by a Moose Once

There are always odds and ends lying around the Bloggable HQ (i.e., Wes’ database), but I feel like I should share them with you all. Enjoy!

  • So we all know about, you know, the GUI Microsoft stole, the menu bar Microsoft stole, and the desktop layout Microsoft stole. Now Jens Alfke finds they appear to have lifted his implementation of RSS in Safari and copied-and-pasted the UI into IE7 (original post has been deleted, but it was cached by a reader). Naturally, these sorts of things are difficult to prove, because it could have been intuition; but Jens doesn’t think so. Anyway, check the photos of screen shots he links to.
  • Congratulations! Mike Matas, 18 (i.e., not even as old as yours truly), makes some of the most beautiful and sublime icons on Earth. He just accepted a job at Apple. He’s been working with Wil Shipley at Delicious Monster, and before that did gorgeous work at Omni Group. What a résumé. Good luck, Mike!

Also in This Series

Reader Comments (2)

Angus · August 4, 2005 - 03:31 EST #1
You know, the reason all those "just don't get it" guys don't get it, could be because they really don't get it! Maybe when you sit them down in front of a Mac, they really can't see why it is a heck of a lot easier to use than Windows (not just the graphical UI, which is already awesome, but the way things are DONE on the Mac).

So when it comes to the iPod:

"Hey, look here a sec, this other MP3 player plays MP3s. It also looks fairly cool -- it's got different shades of rainbow. You Mac guys like different colours right? This MP3 player also syncs with my PC. It's got a hard disk and a colour screen. It's also cheaper than the iPod! So, what gives? Why is the iPod so popular? I DON'T GET IT!"

Da Kman · November 3, 2005 - 06:56 EST #2
Apples or IBM' may see an increase on the home user front, but inreality it is a short lived trend and will never over ride PC's popularity in the near this day of the performance wars, there is little difference in what one can do with or without the other. I have used both for many different high end applications (music and film production, graphic and web design and even CAD rendering)...and for the exception in CAD, i dont see any real noticable fact, the PC seemed better to use.

iPod is a complete failure, especially now with Apple's new "upgrades" that actually takes the usability features off of iTunes...and even though these are legal downloads, it still renders them iPod is limited with compatibility...forget their slick marketing making you think its the only mp3 player out honesty...there are many others, including generics, that are simply better mp3 players with less limitations.

My conclusion: Apple lovers just dont get it...they keep defending their 1995 machines and iPods, while reality alludes them. Apple defenders remind me of die hard Bush supporters.

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