Thanksgiving for 10 blunders Apple didn’t commit

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It’s Thanksgiving again. Time to reflect and count our blessings. For those touched by Apple’s products and weltanschauung, an opportunity to give thanks to Steve Jobs & Co for not doing what was so vociferously advocated by the usual suspects: analysts, pundits, naysayers and the anti-Apple corner over the last few years.

In no particular order, we give our thanks because Apple did not:

  1. become a MVNO (Mobile Virtual Network Operator) to sell the iPhone. A few years ago everyone was convinced that any sufficiently recognizable company could peddle mobile phone services by slapping its brand on a MVNO to leverage a carrier’s network. Remember Amp’d, Helio, Disney, ESPN…? ‘Nuff said.
  2. start selling a TabletPC before its time. There’s been a highly vocal contingency who’d pay a premium to get Apple’s take on TabletPC, which has been an unmitigated revenue disaster on the PC side. While various iPhone and notebook technologies may converge into a TabletPC-like form factor in Apple’s product line someday, such a device, even running OS X, would have been a dud in 2006.
  3. open up iTunes. Apple has been under tremendous competitor pressure to license its FairPlay DRM and also allow competitors’ formats like Windows Media and Rhapsody to run on its iPod/iTunes/iPhone ecosystem. The iPod saved Apple and this free-for-all would have killed it.
  4. drop the iPhone name for its upcoming phone when everyone thought the company was crazy and foolish to challenge Cisco’s trademark. Can you think of the iPhone as anything but the iPhone today?
  5. panic when iPod/iTunes integration via FairPlay DRM was challenged in Europe, most notably in France, Germany, Denmark and Norway. These attempts have been misguided and unfair to say the least.
  6. license OS X to cloners. For the we-don’t-grok-hardware+software+service-integration crowd this hope will never die, business models be damned.
  7. bend on iTunes policies when major music labels were pushing Apple to rely more on full-album (and less on singles) sales, raise individual song prices, institute price hikes under the guise of “variable pricing,” track users via DRM to stem file sharing and various other initiatives designed to recapture their lost dominance of the digital music industry. To its credit, Apple has been mostly able to withstand its ground even when the labels withheld content and NBC altogether walked away from iTunes.
  8. lose perspective on Apple TV by heavily promoting it even as the environment for efficient delivery of high-resolution video and broadcast content in the U.S. is simply not there yet. Steve Jobs labeled it as a “hobby” which pretty much describes the current state of affairs.
  9. parter with AMD instead of Intel for the transition from PowerPCs. Many analysts and pundits couldn’t understand why Apple bypassed what appeared to be a line of faster and more efficient chips. Jobs’ appreciation of Intel’s volume manufacturing, pricing and product roadmap, especially for Apple’s bread-and-butter non-desktops, proved to be on the spot.
  10. select a lesser OS for the iPhone. The mobile device is destined to become Apple’s primary revenue generator going into the next decade and Apple avoided a land-mine by not adopting a garden variety embedded OS grafted on top of a glorified iPod. This may yet prove to be one of the most important decisions ever in Apple’s history.

What are you thankful for things Apple did not do?

47 thoughts on “Thanksgiving for 10 blunders Apple didn’t commit

  1. Pingback: Apple: 10 Things It Needs To Do In 2009 | Download Archive

  2. Kontra: “But in most such instances those who criticize Apple don’t have sufficient information on (internal and external) constraints that Apple must operate under in terms of legal obligations, business partnerships, product roadmaps, competitive pressures, financial planning, and so on.”

    OMG! Can you say that again in all caps?

    Anyone who’s read anything about the iTunes saga knows that the 24-hr rental limit was imposed by the media companies, not by Apple. Those who continue to rant about evil Apple and their evil DRM must have missed Jobs statement that he would be perfectly willing to sell DRM-free music if the labels would allow it. They apparently also missed the music industry trumpeting that they would allow Amazon to sell DRM-free music while at the same time purposely leaving DRM requirements in place for iTunes, all for the sole purpose of reducing Apple’s dominant position in the digital download market. They actually said this…out loud. How blatant!

    Apple did not attain this dominant position because they “keep you locked into their proprietary formats.” They attained it because they provide the most elegant and convenient way for people to legally download music. If you find another company’s format more desirable you are perfectly welcome to utilize it, but it is certainly ridiculous to continue to question how Apple chooses to conduct its business when you have no idea what sort of constraints they are operating under.

    And Matt, it certainly is refreshing to see someone acknowledge that an opposing viewpoint has provided them with food for thought.

  3. Re: variable pricing for iTunes

    It seems that a lot of people don’t know this, but variable pricing is a way for the labels to control which artists succeed and which fail.

    If someone knows nothing about two songs, each by a different unfamiliar artist, and one is priced $1.50 and the other song is priced at$0.50, what will that person conclude about the relative quality of those two songs? The strong implication is that the 50 cent artist sucks.

    If there was variable pricing in iTunes, guess who would set the prices? The labels! Remember that the interests of the artists and the labels are often very different.

    Ever wonder why most movies are the same ticket price? Same reason. If there was a $5 movie and a $12 movie, most people would assume the $5 sucked and no one (except real cheapskates) would go. In that case, why would the theatre even bother to play it?

    Anyway, others have written a lot more about this, so go read about the effects of variable pricing before you argue that Apple should have done it.

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  5. Matt: “if someone believes Apple is making the wrong trade-off between simplicity and choice in some manner”

    That obviously can and does happen. Apple’s approach to that dilemma has not been: “iTunes should bend to artists and developers needs” as you put it. In the long run, Apple has made more (what turned out to be) correct decisions than not, and that’s why I defended Apple’s right and ability to curate its offerings.

    If you regard Apple as dumb and venal, as some do, then you’ll take your business elsewhere. Nothing wrong with that. But in most such instances those who criticize Apple don’t have sufficient information on (internal and external) constraints that Apple must operate under in terms of legal obligations, business partnerships, product roadmaps, competitive pressures, financial planning, and so on.

    You seem to be convinced, for example, that it’s right and easy for Apple to allow movies to be rented for “72 hours instead of the currently stingy 24.” Without having sat in meetings with Apple people whose salaries depend on figuring out these things, how exactly do you know that? Variable pricing is not a universal panacea. On the contrary, price uniformity is quite common for a lot financial, technical and psychological reasons, as evidenced by non-variable movie theater ticket prices.

    Pricing is design, as I have argued many times here. Just as a company shouldn’t let its products be designed by others, neither should it let others (including developers, artists, etc) design its price structures. It should listen to them but not be obligated to agree with them.

  6. Scot: “why doesn’t your header logo link to the main blog view?”

    The template I use is heavily reconfigured to look like the way it does now, but the logo is unfortunately not a clickable item. Since a redesign is on the (not immediate) agenda, I haven’t messed with it. I’m glad you enjoyed the rest though.

  7. “Early on, one of the key ingredients of iTunes’ success was the simplification of per-song prices to $0.99.”

    Agreed – but we are passed the early birthing stages of the iTunes store – its success isnt in doubt anymore – and the appstore shows that consumers can be presented with different costs for different media without getting lost and confused. I dont expect all the books I buy to costs the same. Consumers realize that some media has more value than others and spend accordingly. Apple doesnt sell all its software at the same price – some has more value and took more effort and they charge more. It sure would be simpler if they sold Final Cut Studio at the same price as iLife but strangely they dont and their customers are able to muddle through. Not sure why music or movies are different than apps.

    “if all you’re interested in is options and alternatives. That’s not what Apple does.”

    dont use weasel words like “all” to try and frame what I was trying to say. That if someone believes Apple is making the wrong trade-off between simplicity and choice in some manner “all” he is interested in is options and alternatives. Thats a neat way to try and shut down criticism.

  8. I love this blog, i went in and read all your articles back till september, all great. I would ask one thing though; why doesn’t your header logo link to the main blog view? Its really annoying to have to edit the url directly to get to the root URL instead of just clicking on the snake. I didnt see any other links that take you to the main page either.

    Is there some kind of design aesthetic behind this choice? It seems to really hinder basic navigation.

  9. Kontra: “The marginal profit from people migrating from other players to iPod “if they want to” is likely less than the headaches introduced by having to manage FairPlay on competitors’ devices. So why bother?”

    I tried to explain this in my earlier comment, but I guess DBL did not comprehend.

    DBL: “After reading that, I was half-expecting you to praise them for not allowing apps to be distributed freely outside of the App Store and for stomping on Podcaster and squeezing out perfectly legitimate competitors!”

    I suppose since we’re such “rabid fanboys” it would be futile to point out that managing the user experience on its devices is way more important to Apple than any sense of unfairness it might engender in a few developers and gadget geeks by not allowing a free-for-all on the iPhone. And speaking of fanboys, in comparing the number of OS X users to the number of Windows users, I would venture to say that there are more PC fanboys than there are Apple customers in total. There is a reason why Apple products inspire loyalty.

    Kontra: “If you want “options” you go elsewhere, and people do.”

    Over the last 10 years it has become obvious that if you are looking for hardware which you can treat like some sort of perpetual erector set, Apple is not your company. And yet the complaints continue about Macs not being upgradeable.

  10. Funny how a great article about how Apple avoided blunders by NOT doing something brought out a lot of whining about what Apple “should” be doing.

    Probably the same reason why the “Apple must license OS X or it will die” meme hasn’t died – people just seem obsessed about their own belief about Apple to admit that Apple is doing absolutely great NOT doing all these things which will supposedly save the company from itself.

    I’m thankful Apple hasn’t jumped on the netbook bandwagon, considering that Intel just said it doesn’t seem netbooks as a growth platform after all.

    http://news.cnet.com/8301-13924_3-10108025-64.html?tag=newsEditorsPicksArea.0

  11. Matt: “I say let her!”

    1 Infinite Loop, Cupertino, CA is just the wrong address if all you’re interested in is options and alternatives. That’s not what Apple does.

    Early on, one of the key ingredients of iTunes’ success was the simplification of per-song prices to $0.99. Apple still has an extremely streamlined product category map: a single form factor for iPhones or all-in-one desktops, good-better-best options at the Store, etc.

    If you want “options” you go elsewhere, and people do.

  12. iTunes should bend to artists and developers needs. Like lets say a producer wants to let people rent her movie for 72 hours instead of the currently stingy 24 – I say let her!

  13. You are wrong about the variable pricing. The Appstore has it and the sky hasnt fallen. Let artists and developers charge whatever they feel they can get and give Apple their 30%.

  14. It is amazing how consistently the “open” crowd fails to grok how hard integration and lifecycle support of hardware, software and service really is when you are committed to user experience.

    There is a big difference between saying “build your proprietary application on top of an open source stack” and/or providing open APIs, and being truly “open.”

    As I have said elsewhere re this thread, it’s about winning the hearts and minds of developers and thrilling users, NOT megapixels and source code licenses.

    That is not to say that these things are mutually exclusive, but I have yet to see a market-leading automobile, e-commerce store, gaming system, online community, mobile device or computer that is “OPEN” in the purest sense of the word.

    Mark

  15. “Thank God Apple didn’t do any of these things, because they would have been disasters, according to my imagination. I am not even going to attempt to explain why.”

  16. DBL: “licensing out of Fairplay (which would not hurt the iPod AT ALL)”

    How do you know that? Apple after all makes its money on hardware, iPods, which uniquely can play FairPlay content.

    “But they should definitely license *out* Fairplay for other devices, because it gives people the ability to freely switch their libraries if they *want*”

    The marginal profit from people migrating from other players to iPod “if they want to” is likely less than the headaches introduced by having to manage FairPlay on competitors’ devices. So why bother?

    “Do you see now why mixing up these two licensing issues was a HUGE mistake?”

    No I don’t, because they are the two necessary sides of the same coin: exclusivity.

  17. Ignoring the thread, I am not glad Apple has as yet not achieved world peace, cold fusion and immortality. I am sure they’ll get there eventually, but this year, sadly, we had to make do with nice consumer appliances.

  18. It’s actually not called ‘the iPhone’ at all. It’s called ‘iPhone’ (no ‘the’). Also, conflating the licensing out of Fairplay (which would not hurt the iPod AT ALL) with the importing of WMV (which would be total whack) is neat but specious way of excusing Apple for some its more unnecessarily fascist excesses. After reading that, I was half-expecting you to praise them for not allowing apps to be distributed freely outside of the App Store and for stomping on Podcaster and squeezing out perfectly legitimate competitors! But you didn’t praise them for that, so maybe you aren’t a *total* apologist.

    Apple shouldn’t put Microsoft’s DRM or any other DRM besides their own on the iPod, because that would make the iPod a total mess. But they should definitely license *out* Fairplay for other devices, because it gives people the ability to freely switch their libraries if they *want* and it’s just the right thing to do (something Apple has a huge blind spot for recently — Just the Right Thing to Do) and who cares if it complicates *other* devices. That’s not Apple’s problem.

    Do you see now why mixing up these two licensing issues was a HUGE mistake?

  19. Apple negotiates from a position of strength. How delightfully different from their unfortunate, pre-return-of-Jobs days in the 1990′s.

  20. Andrew: “You’re grateful that Apple keeps you locked into their proprietary formats and programs?”

    I am extremely grateful that Apple is in charge of its own destiny by way of its control of hardware, software and services in an integrated manner. I’m positive that Apple can do a better job of creating and nourishing an operating system than I. Or a myriad well-crafted devices and apps that I gladly use.

    I am also positive that had Apple “opened up” the iPod/iTunes platform to its competitors (and that’s all they are) it would not have survived as a company, period.

  21. Pfft. Points 3, 5 and 6. You’re grateful that Apple keeps you locked into their proprietary formats and programs?

    Points 1, 4, 10. Being thankful that the iphone is a decent phone makes sense, although because it is a decent product it would have succeeded under a different name. The Nintendo Revolution was renamed Wii but it survived.

    2. Apple pays careful attention to their software design, so I think they could have come up with a decent TabletPC design. Also, there are more rabid Apple fanboys than PC fanboys, which would have boosted sales. Still, it’s safer to stay out of that area of the market.

    9. There’s not much difference in the long run between Intel and AMD. They’re always one uping each other so while the decision looks good now, it won’t look as good in a year or two.

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  23. This is a great question because what a company (or a person, for that matter) doesn’t do is often just as important as what it does. I’ve gotten to the point now where I dismiss most pundits as mere hit trolls because they keep writing the same articles over and over asking why Apple won’t do something that everyone knows is not going to happen. For example, why are we still seeing articles in 2008 asking why Apple doesn’t license OS X? And when it’s become quite obvious that Apple does not measure it’s success by market share, why do we keep hearing about Apple being a failure because it’s not as big as Microsoft? We all know that enterprize is the tail that wags the dog and that Apple has stated that they wil not place themselves in that position. And yet we are continuously subjected to articles bemoaning how many opportunities Apple has missed to establish themselves as an enterprise player. I guess I’d have to say that I’m thankful that Apple had remained committed to being Apple.

    Oh, and flo, Microsoft was targeted in large part because it used it’s dominant position in the market to prevent OEM’s who depended on the Windows OS from doing business with Microsoft’s competitors, the prime among many being the Netscape browser. Apple is not in a position to prevent any customer from using any product it wants – customers are perfectly free to purchase different MP3 players and fill them with music however they like. Apple creates it’s own computer hardware and runs it with it’s own OS and you are perfectly free to buy or not to buy their system. And Steve Jobs explanation about Apple’s refusal to license their Fair Play DRM made perfect sense to me: their agreement with the music industry requires that they maintain the security of Fair Play and fix it within a specified period of time if it is ever compromised. Licensing it out would mean that they would forfeit the control necessary to ensure its security. I would even speculate that the agreement stipulates that they are prohibited form licensing it out. Knowing how the music industry feels about digital, this certainly seems a plausible scenario.

  24. I’m glad they haven’t made my 3 year old iPod Photo ‘planned-obsolete’ yet as it still works perfectly and I need at least 40 gigs on a Touch before I’d buy one.

  25. Pingback: links for 2008-11-27 | The 'K' is not silent

  26. A huge one I’m surprised hasn’t been mentioned:

    I’m thankful Apple did NOT heed the calls of so-called “experts” who said that they should drop their hardware business and become a software-only company.

  27. Jens Alfke: “I am thankful Apple dropped the F***ing NDA for iPhone developers!”

    I’m curious Jens if you think Apple should have completely opened up the App Store to any and all.

  28. Pingback: » i think i love you kontra i drank the kool-aid: clutching my dixie cup of apple goodness

  29. I have to disagree with the comment about the Apple(logo) TV.

    It’s “not there yet”, not because of any technical or economic reasons. It’s “not there yet” because Apple didn’t put enough effort in, and released a promising, yet crippled product. It’s so close to being good – with a little more effort and a little less crippling, it could be a great platform.

    I rank the Apple TV as one of Apple’s biggest recent mistakes – along with their neglect of the Mac Mini. It really reflects badly on Apple – because if anybody is doing any serious comparison-shopping, the Apple TV (and now the Mac Mini) don’t fare very well. It may give the impression to potential customers that all Apple products are like this – underpowered and locked down, when that’s not the case at all in the main product offerings of Macbooks and iMacs.

    I think Apple would have been better off not releasing the Apple TV at all than by releasing this not-yet-ready version. As for the Mini, it was fantastic when it was first released – good specs, awesome form factor, for an attractive price. But now those specs and price are not attractive, as they’ve let it languish without any updates, while other machines (both Apple’s and other brands of PC) keep moving forward.

  30. Another thing to be thankful for: nobody taking Ed Zander’s “Screw the nano” comment seriously. There’s a reason people are buying iPhones rather than ROKRs. Even my Sony-Ericsson Walkman phone has an (upgradeable) 2Gb of flash to fill with music and podcasts.

  31. There’s a lot of things to be thankful for wrt OS X– not licensing it is only the beginning. Basically, Apple has found a way to thrive without copying Microsoft. All the Microsoft-oriented analysts and commentators just refuse to admit that there could be any way to succeed in the computer biz besides the Microsoft way. But Apple is doing it– and at the same time Microsoft’s current flailing around, trying to expand its business, is demonstrating to the world why Apple is doing things the right way.

  32. Re: “open up iTunes”

    Ironically, I think this is the best thing Apple could have done for DRM free music. I am a 100% sure that if Apple would have opened up Fairplay, it would have been in EVERY device, thereby removing the need for DRM free. However, it would have been a pain for Apple to maintain, and they would have got sued left right and center. And consumers would have had a terrible time trying to run it.

    In the long run, it would have damaged Apple business wise, reputation wise, and would have also set back the DRM free movement by about half a decade.

  33. Another one I think isn’t mentioned enough — opening up the iPhone completely.

    While there are those who swear by jailbroken iPhones/iPod Touches, opening up the iPhone would be the same as #6 – licensing OS X. Apple won’t open up their systems to other people. By doing this, they keep the system clean and efficient.

  34. “Oh… and @flo… MS got fined big time for illegal practices(and is still being in EU), not for being a monopoly per se.

    yes , yes and YES ! it’s ILLEGAL practices when you are in a monopoly who is BAD, NOT to be successful or in monopoly of course!

    -

    Apple (or microsoft) can keep their OWN-MADE technology for themselves if they want.

    it’s only if they abuse of their position to destroy companies in unfair practices. (for example, to force an other company to drop any project with a wannabe competitor )

    and, you have to admit : there are MANY MANY mp3 (or other formats) shops to buy MUSIC

    and when I go in shops, I can buy MANY MP3/others devices not made by apple.

    but yeah, I confess, I much prefer ipod + itunes than amazon mp3 website + sony stuff.

    -
    Apple is not in a monopoly with no choice and influence in horizontal market.

    -
    please, the reason why microsoft was often in justice is clearly explained on many website, books and newspaper and you can read the judgements and explanations
    Never was the goal to punish them for their success with windows and Office. it was to stop them to be destructive to the market.

    —-
    “Not embracing the enterprise. At my company, there are plenty of people who wish the company was a Mac shop, but it’s always been clear that Apple doesn’t really take the enterprise seriously, and with good reason – there’s no money there. ”

    even with dell, we try, in my company, to buy abysmal cheap (and really crappy) pc to lower the price as much we can. many workers doesn’t need a great computer to do just their work.

    in my opinion, they need GREAT displays, not a great desktop computer. I love macs, but I can’t justify an imac for all workers. I cannot, I would like ,but I can’t.

    so, even Dell is forced to lower their quality.

    HP is a worst situation than dell. They lose money on enterprise-class desktop computer. they try to gain money on servers. Expensive ones.

    IBM is still doing an impressive Workstation-style POWER computers. Of course it’s only a niche. for massive scientific/industrials works who can allow themselves to buy a Great desktop computer (the power workstation are very expensive, $5000 to start, a macpro is a bargain..)

    Apple is simply not a company doing corporate tools. it’s simply that. like ikea is not a company selling corporate props.

  35. Not embracing the enterprise. At my company, there are plenty of people who wish the company was a Mac shop, but it’s always been clear that Apple doesn’t really take the enterprise seriously, and with good reason – there’s no money there. We’re flooded with crappy Dell machines running Windows, and I’m sure that Dell barely makes a dime on us. The enterprise is a black hole.

  36. For generally remaining aloof from the crowd. They almost never counter the negatives and doom-mongers. One of the few exceptions was to counter the recent Jobs heart attack lie. Yes it makes them secretive, hard to fathom and a little arrogant, but let’s face it, the last ten years of phenomenal growth are justification enough.
    For their company wide ‘innovation’ dna.
    For their unbelievably forward looking decision to buy Next/Open Step thus begetting OSX.

    Oh… and @flo… MS got fined big time for illegal practices(and is still being in EU), not for being a monopoly per se.

  37. mmmh, while I agree with some of those, some just seem to be too much apologizing for what ofc is apple’s corporate policy, but that doesn’t make it good. Take DRM for example … afaik it’s not about drm as a whole, but apple not allowing other companies to say “hey apple, we’d like to license your software so ppl can play fair play protected songs on our devices” Like it or not but with a marketshare in mp3 player’s like apple’s, those calls will only get louder… Also how is this unfair? Microsoft got fined big time for similiar reasons, the fact that they write it in the eula or some other document the end user has to agree to doesn’t change anything. Oh and btw, if I’m not mistaken it is still being challenged, not was.

  38. Richard Stacpoole: “Ignored financial analysts…”

    Yep, good one. You can also set your clock by the “Apple has enough money, should buy Adobe” evergreen.

  39. Ignored financial analysts who wanted them to spread their billions on share buybacks, dividends, starting a VC fund and buying innumerable companies like Sun etc.

    Now they have enough money to ride out more rough years than just about any other company.

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