WSJ: The Microsofting of Apple
Holman W. Jenkins Jr. Opines in Today’s WSJ that “Apple may be succumbing to the seductive temptations of “network effects,” in which the all-consuming goal becomes getting its mobile devices into more and more hands simply for the purpose of locking more and more users into iTunes”.
Jenkins’ main thesis is that Apple has moved away from its focus on great products and instead seeks to dominate the user’s media and technology ecosystem, to the exclusion of all others, especially any companies which have “crossed” Steve Jobs in the past (cough, Adobe, cough). Jenkins’ money quote reads “But the iPad (an anagram for paid) looks like a good device for consuming the e-books, music and video sold through Apple’s online service. In fact, let’s not mince words: The iPad looks like a device optimized to patronize the iTunes store.” Of course, a device that was also great for web-surfing would support Flash, but that’s not Apple’s goal.
I tend to agree with this theory, and not just because it supports what I and others were writing at Gizmodo when the iPad first launched: this is not a computing product, it is a media consumption device. Since then, we’ve seen the Publisher War with Amazon and rumors that the iPad may see an immediate price drop, both of which point to a more hard-core media delivery focus, with less profit from the hardware.
In the past, the vast bulk of Apple’s profits have come from the hardware, with software and iTunes sales providing a little cream on top. It looks like the iPad may be the first salvo in a battle to change that. If so, what will the follow-up be? A revised, actually useful AppleTV to allow you to play all that purchased iTunes content on the big screen? And who will be next in Apple’s sights? The CableCos?
Update: Of course, according to iSuppli, Apple will still see a healthy profit on each iPad, unless the predicted price cut is a lot deeper than anyone expects. HatTip Gizmodo
