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Apple Prepares For the Coming iPod Slump 340

Posted by timothy
from the mighty-shall-fall dept.
Hugh Pickens writes "Companies like AOL have stagnated along with the products that made them successful as a mature market and downward pressure on prices led to a nasty death spiral, but Saul Hansell writes in the NY Times that Apple has used its amazing six-year run with the iPod to nurture other business lines. Even though the number of iPods sold this quarter grew only 1 percent from the same quarter a year ago, Apple should be able to sustain itself with three business lines that will help it withstand a collapse in the MP3-player market: a continuing revenue stream from the iPods that have already been sold because of the iTunes Store, product upgrades to the iPhone and iPod Touch that are so different that they may well appeal to a significant number of iPod users, and perhaps most significantly, sales of the Macintosh which showed an increase of 51 percent by units and 54 percent by dollars."
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Apple Prepares For the Coming iPod Slump

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  • A slump? (Score:5, Interesting)

    by CRCulver (715279) <crculver@christopherculver.com> on Thursday April 24, 2008 @12:57PM (#23185490) Homepage
    As economic prosperity spreads to certain parts of Eastern Europe and the Middle East, I'd think there should be a steady stream of new buyers. Of course, in non-Japan and Korea Asia people seem happy with the fake iPods (complete with "iPod" written large on the front to soothe your designer-look lust) and I can imagine competing there is difficult.
    • Re: (Score:2, Redundant)

      by ackthpt (218170)
      *cough* China *cough* 1.5 Billion (said with Dr. Evil inflection) potential customers.
      • Re:A slump? (Score:5, Interesting)

        by CRCulver (715279) <crculver@christopherculver.com> on Thursday April 24, 2008 @01:43PM (#23186344) Homepage
        1.5 billion people who are happy with fakes. Have you been to China and seen their middle class buying habits? Many of them don't even know there is a real difference between the Apple product and the fake.
        • Re: (Score:3, Interesting)

          by cyfer2000 (548592)

          One more reason is China is heavily M$ dominated, even in the media format area. And iPod doesn't play with WMA stuff well.

          In the culture side, Chinese like function more than smooth experience. So those FM radio, GPS enabled, video playing, recording, picture taking, video taking media player sell much better than the simple iPods.

        • Re: (Score:3, Interesting)

          Two weeks ago I purchased a 2 GB player that has an FM radio, speaker, 3.5mm (not the earbud-only 2.5mm) phone jack, plays MP3s, AAC, WMA, WAV, OGG, and FLAC, and when plugged in via its standard mini-USB interface (which also charges the battery) it appears as a standard USB drive, so just drag and drop songs and you're done. The menu system can be switched between multiple languages (Mandarin, Japanese, Korean, German, French, Spanish, and English). Cost was 110 RMB, around $16. Runs exactly 6 hours on
      • Re:A slump? (Score:4, Interesting)

        by gobbo (567674) <wrewrite@gmai[ ]om ['l.c' in gap]> on Thursday April 24, 2008 @01:45PM (#23186376) Journal

        1.5 Billion ... potential customers.

        More like 200 million, at most 15%, are middle class and buying luxuries. Note that middle class there is less voracious than in USA. It's debatable, but not much larger for a few years. [/stultifying pedantry].

    • Re:A slump? (Score:4, Interesting)

      by alphafoo (319930) <loren@boxbe.com> on Thursday April 24, 2008 @02:49PM (#23187424) Homepage
      I wonder if that means the iPod will start supporting Arabic, if there really is such an emerging market in the ME. There were rumors about Arabic language support back in Jan 2006, I believe, but so far nothing.

      The iTunes application does support Arabic, but when you sync the music to the iPod, you just see a blank space where the song name would go.

      Someone did hack together Hebrew support on the iPod, which tackles the RTL problem, but Arabic needs to be written in cursive, with all the letters connected. It's a solvable rendering problem, but to date, Apple has obviously not felt it to be worth the candle.
    • Rice before iPods. (Score:3, Insightful)

      by dreamchaser (49529)
      Have you seen the recent news about food prices in Asia? Rice prices have doubled and people are starting to protest and even riot. If the current trends continue, including the short sightedness of trying to use food as fuel, that emerging market could collapse rather quickly.

      We are *so* insulated here in the US and Europe. Food prices have inched up here, but nothing like what they've done in developing parts of the world. Maybe we should stop paying farmers to NOT grow food, then maybe people will be
  • batteries (Score:5, Insightful)

    by berashith (222128) on Thursday April 24, 2008 @12:57PM (#23185500)
    Battery replacement to existing units is a great new line of revenue for any customers who aren't willing to just replace the original when it stops holding a charge.
    • Re:batteries (Score:5, Informative)

      by astrosmash (3561) on Thursday April 24, 2008 @01:23PM (#23185966) Journal
      The 3rd-party iPod battery market has been over-saturated for years. You can get a new battery for any iPod model, including the tools needed to perform the replacement, for under $30 dollars.
  • by UnknowingFool (672806) on Thursday April 24, 2008 @01:04PM (#23185626)
    All Apple has to do is to look at Dell. Dell made gads of money and had huge growth by selling PCs. The PC itself wasn't new, but it was being bought by more and more demographics. That, however, only lasts so long. To keep up with the same growth, Dell would have to sell more computers in a year than there are people on this planet. So they have to sell people a second computer if people aren't ready to replace their existing computer or computers to businesses. But their entire business still revolves only around computers and every thing is just an accessory. They tried getting into other lines like media players, printers, etc with varying degrees of success.
    • by raddan (519638) on Thursday April 24, 2008 @01:19PM (#23185888)
      OTOH, Apple's been around for nearly a decade longer than Dell, and people have been predicting Apple's demise [folklore.org] since before even Dvorak began his torrent of verbal excrement. And yet, Apple has managed to persevere and surprise all of us over and over again. You may not like Apple, but you can't deny that they know how to weather ups and downs. Steve Jobs seems especially good at getting people excited about even their mundane products. I think Dell should be looking at Apple.
    • by falcon5768 (629591) <Falcon5768 AT comcast DOT net> on Thursday April 24, 2008 @01:23PM (#23185960) Journal
      Um no, Apple should NOT be looking at Dell.

      Unless you have been under a rock for the last 5 years, Dell priced themselves into a hole and now has serious financial issues. They have basically moved all their operations to India, and now are limiting even built to order in the hopes of saving their asses as the economy bombs.

      And their model was ALWAYS to sell multiple computers to the same people, through planned obsolescence in 2 years.

      No Apple is doing things EXACTLY right, which is why they are the only computer and perpetual manufacturer to make serious profits in a failing economy. If Dell took Apple as their example, they would not be on the brink of firing off a good 1/8th of their workforce to save profits for their management.

      • by couchslug (175151)
        "And their model was ALWAYS to sell multiple computers to the same people, through planned obsolescence in 2 years."

        That is why many geeks recommend against buying their proprietary form-factor upgrade-resistant machines.
      • by UnknowingFool (672806) on Thursday April 24, 2008 @01:58PM (#23186610)
        Apple should be looking at Dell as a cautionary tale of what can happen if your company doesn't expand their business. I don't think I made that clear. Dell is trying to expand but haven't had much success in other products other than computers.
      • Re: (Score:3, Funny)

        by gstoddart (321705)

        No Apple is doing things EXACTLY right, which is why they are the only computer and perpetual manufacturer to make serious profits in a failing economy.

        Perpetual? Really?

        I think you're having a seniors moment. I empathize, I use the wrong walrus in sentences all the time. :-P

        Cheers
    • Re: (Score:3, Informative)

      by hondo77 (324058)

      All Apple has to do is to look at Dell.
      You mean this Dell [yahoo.com]? Why would Apple do that?
    • Re: (Score:3, Insightful)

      by sessamoid (165542)
      Apple take a cue from Dell? Are you smoking crack?

      As of market close today:

      Apple market capitalization $148.48B
      Dell market capitalization $39.09B

      Maybe Michael Dell should just liquidate the company and give the cash to the shareholders....

  • by line-bundle (235965) on Thursday April 24, 2008 @01:06PM (#23185662) Homepage Journal
    Eventually the market would saturate and I am sure Apple economists must have known it. I don't think they are really surprised at the slump.

    Nothing to see here..... move along.
    • by Anonymous Monkey (795756) on Thursday April 24, 2008 @01:19PM (#23185876)
      Are you kidding me! We have finally found the perfect iPod killer! This is something Microsoft has been after for a long time (not to mention Sony, Creative, Samsung, and many others). The iPod it self will create it's own demise. Some one should call Microsoft and tell them to start selling iPods so that they can kill it faster.
    • Re: (Score:3, Interesting)

      by timeOday (582209)
      Predicting it is not the point. Cray, Silicon Graphics, DEC... I'm sure they all saw the writing on the wall. We can predict social security going insolvent, we can predict China surpassing the US, we can predict global warming. The question, in every case, is "now what"?
    • by UnknowingFool (672806) on Thursday April 24, 2008 @01:52PM (#23186508)

      Apple is pretty good at planning things but they are secretive so you don't know what they are planning. The iPhone was in development for 2 years before they announced it last January. And the only reason they announced it 6 months before they were able to sell it was that Apple had to apply for a FCC license on it.


      Over 10 years ago, Apple bought NeXT to save themselves. Some analysts couldn't understand why Apple with it's faltering personal computer product line would buy a Unix computer company whose product line wasn't very successful. Was Apple going to start selling 2 product lines? What few understood was Apple bought NeXT for their OS expertise not their hardware business. That expertise became OS X.


      Just yesterday, Apple bought PA Semi. This slump might be something that planned for a long time and PA Semi is just the start. We don't know what Apple has in store for PA Semi if NeXT is a good example.

  • by xxxJonBoyxxx (565205) on Thursday April 24, 2008 @01:06PM (#23185668)
    What about an 80-column card? (If you get that, I know how old you are...)
  • I have an old 3g 40GB iPod that I received as a gift, it still works very well.

    Yeah the iPod touch is cool, but 32GB is woefully inadequate.

    The 160GB iPod Classic might be nice, but then I read comments that they have Cirrus Logic (*shudder*) sound chips instead of Yamahas. No thanks.

    I've never used iTunes. Amazon.com sells MP3s with no DRM for the same or lower price than iTunes.

    iPod still has the name recognition and is much sought after, but there are better alternatives, I'm looking at an Archos WiFi
    • by Sciros (986030) on Thursday April 24, 2008 @01:22PM (#23185938) Journal
      You could check out the Cowon Q5W. It competes with the high-end Archos PMPs. I have a Cowon A2 and for the kind of player it is, it's easily the best one I've used. Though the next player I plan on getting will be Cowon's successor to the D2, whatever that will be, as the idea of just swapping out high-capacity SD cards works for me.
    • If I buy songs online, I buy them from Amazon. It's downloader pulls them down and puts them right into iTunes without a hitch.

  • by noewun (591275) on Thursday April 24, 2008 @01:15PM (#23185810) Journal

    Or is this the one which was supposed to hit two years ago? Or the one from last year? You see, I get them confused, as it seems every year someone is predicting that Apple's iPod growth will suddenly crater as Teh Next Big Thing comes along and steals Apple's thunder.

    I don't know if iPod growth will crater, or slowly slow down or whatever. But I am pretty well convinced that, whatever happens, no "expert" will predict it.

    • by Anonymous Coward on Thursday April 24, 2008 @01:24PM (#23185974)
      Or is this the one which was supposed to hit two years ago? Or the one from last year?

      No, no, you're getting that confused with the Year of the Linux Desktop(TM) again. Keep it straight, man!
    • by timeOday (582209)
      Don't any of you even read the blurb! GROWTH HAS CRATERED. There is no "prediction" here. 1 percent annual sales growth is nothing, especially compared to what the iPod has done in years previous.
      • Re: (Score:2, Informative)

        by drerwk (695572)
        http://daringfireball.net/2008/01/aapl_q1_2008 [daringfireball.net]

        But hereâ(TM)s the thing: iPod revenue growth continues to grow at about the same pace. Last year, iPod revenue was up 18 percent over the previous year; this year, it was up 17 percent. Think about that: a year ago, iPod unit sales were up 50 percent but revenue was up just 18 percent; this year, unit sales are up just 5 percent but revenue is still up 17 percent. (Compare and contrast to Appleâ(TM)s Mac hardware sales, which are up 44 percent in units and an almost identical 47 percent in revenue.)

      • by noewun (591275)
        Any annual growth is not cratering. Cratering would mean, by definition, a precipitous decline.
  • by mpapet (761907) on Thursday April 24, 2008 @01:15PM (#23185814) Homepage
    If the number of Mac units sold is accurate, then Vista is absolutely killing HP and Dell unit sales.

    That would suggest that Dell and HP's consumer PC business will show unit and dollar sales declines.
    • by MightyYar (622222)
      They may not show declines - just lesser growth than they would otherwise. Apple may be stealing growth in a growing field (and thus market share).
  • by mcsqueak (1043736)
    I think Apple is doing a decent job upgrading their product line in order to keep winning back existing customers. I still have a 4G iPod (the last version with the monochrome screen) that is 4 years old now and it still works like a charm. The battery is probably shot, but I use it exclusively in my car now so it's plugged in all the time. When the hard drive finally dies I'll probably get an iPod touch so I can get maps and stuff on the go. However, it shows what happens when nearly everyone in America w
  • Mac Sales (Score:5, Funny)

    by ForexCoder (1208982) on Thursday April 24, 2008 @01:18PM (#23185866)
    " sales of the Macintosh which showed an increase of 51 percent by units and 54 percent by dollars."

    Sounds like Vista is paying dividends for somebody.
    • Re:Mac Sales (Score:4, Interesting)

      by I'm Don Giovanni (598558) on Thursday April 24, 2008 @06:32PM (#23190896)
      Actually, not as much as one might think, according to this chart showing the OS userbase trend from May 2007 to March 2008 [hitslink.com].

      According to the chart, Vista's share increased from 3.75% a year ago to 14% today. The chart also shows that XP's share decreased from 82% to 73.6%. Vista has been cannibalizing XP's share, but Vista+XP today has a 1.6 percentage points greater share today than a year ago (86% in March 2007 to 87.6% in March 2008).

      The chart shows that Mac share went from 6.5% a year ago to 7.5% today, which is a significant increase. But note that the chart separates PPC Macs ("Mac OS") from Intel Macs ("MacIntel"), and here you can see that MacIntel's share has increased from 2.5% to 4.5% while PPC Mac OS decreased from 4% down to 3%. That is, most Mac sales are due to people upgrading from Mac PPC to Mac Intel in the same way that most Vista sales are at the expense of XP's share.

      So XP+Vista increased by 1.6 percentage points from a year ago, while PPC Mac + Intel Mac increased by 2% from a year ago. Not much difference, and with Vista well ahead of the combined Mac total (14% vs 7%) it's difficult to argue that Vista caused mass defections to the Mac.

      However it CAN be argued when you look at the Windows 2000 stats. Windows 2000 went from 4.3% to 2.3% during that same time period. It appears that of that loss of 2 percentage points, 1.7 went to Vista and the other 0.3 went to MacIntel. I think that Mac also gained from the decrease in "Other", which decreased from 2.5% to 1.9%.
  • by CowboyNealOption (1262194) on Thursday April 24, 2008 @01:18PM (#23185872) Journal
    I wonder what Apple will release around the same time that Microsoft releases their next OS? A version of OSX that runs on any "Vista Ready" machine before then would be kinda cool. The press seems to be split on how Vista is helping/hindering Apple, but I am sure things are already percolating based on the 2010 release of the next Microsoft OS.
    • by GregPK (991973)
      I've been predicting it for a while now. I figure Apple will have about 40-50 percent of the total PC market share before Microsoft makes something that turns the tide on this trend. Even then, I doubt Microsoft will ever fully get back to where it was as a percentage of market.

      I'm predicting the final tally in 2012 will be a higher total number of users for all operating systems but statistically will be split like this for primary OS.

      Microsoft 40 percent
      Apple 40 percent
      Linux gaining traction at 20 perce
      • by cowscows (103644) on Thursday April 24, 2008 @01:41PM (#23186318) Journal
        I think the big flaw in your numbers is business users. The vast majority of them are not going to pay the premium for Apple hardware, and I don't see Apple selling budget boxes or licensing their OS anytime soon.

        If you take businesses out of the count and look at a consumer level, then your numbers seems more feasible to me. You just have to walk into a college lecture hall and count the Apple logos to see the inroads that they're making.
  • Macintosh (Score:3, Insightful)

    by SailorSpork (1080153) on Thursday April 24, 2008 @01:19PM (#23185878) Homepage
    Holy cow, it's been a long time since I've seen someone actually refer to the computer line as "Macintosh" as opposed to just a Mac. My first impression when I read the stub was "Apple has increased its sales of Monochrome IIGS systems? How?!"

    Back on topic, Apple has been smart to diversify a little, but even the article mentions that the new features of iPods (eg, Touch) are meant to appeal to existing iPod owners, meaning they want existing customers to buy even more iPods. It also worked with the iPhone and the Shuffle, where fashion-conscious current iPod owners went out and bought "the next thing," but is this strategy really sustainable? How much longer can Apple really keep selling to the same hardcore user group before enough of them say "I have enough trendy mp3 players."

    I don't really consider marginal improvements and marginal innovations that appeal to the same core group to be really sustainable over the long term. What they need to do is find the next "trendy gadget" line. That isn't mp3 players. Until they find out what the next "big thing" is and trend-itize that, their investment in other revenue streams (at least the ones that are still dependent upon popularity growth in mp3, like iTunes) is still susceptible to market growth deceleration. Bravo for making your computers popular again with all that iPod money though.
    • Re:Macintosh (Score:4, Insightful)

      by Gotung (571984) on Thursday April 24, 2008 @01:30PM (#23186080)
      The next big thing? You mean like a touchscreen ipod/phone/mobile computer? Yea that would be awesome. Apple should make one of those!!
    • by quanticle (843097)

      Arguably, Apple has already found the next big thing. Its the networked, touch-based PDA, also known as the iPhone/iPod Touch. While the iPhone is encumbered by its contract with AT&T, the iPod Touch has no such encumbrances and still manages to include all the PDA features.

  • because the business model includes making the product fail often enough that the consumers will constantly have to buy new ones.

    It used to work for cars until this company called Toyota came along and ruined everything. Maybe I'm just cynical.
    • It used to work for cars until this company called Toyota came along and ruined everything.

      OK, take off your tinfoil hat for a moment and consider the state of manufacturing in the US circa approximately 1970. There were several things working against the US auto manufacturers at the time that were irrelevant (or even favorable) to the imports:

      • US oil embargo
      • Strong US dollar - Yen exchange
      • US supply chain issues
      • Incomplete transition from SAE to metric

      So while it is very popular to bash on American car companies, I say that at least some of this is unfounded. People really need to take in th

    • Re: (Score:3, Insightful)

      by Thelasko (1196535)
      Say something bad about Apple and American cars and get moded a troll. Says something bad about Microsoft and get +5 insightful.

      What do I care, I have karma to burn.
  • iPod = iPod Touch (Score:3, Insightful)

    by whisper_jeff (680366) on Thursday April 24, 2008 @01:34PM (#23186168)
    Apple, for me, has proven capable of continuing to generate revenue, even though I bought a product which was still more than functional and adequate to my purposes. My 20 gig iPod was plenty for what I wanted and I was very happy with it. Then they released the iPod Touch (iPhone not available (officially) north of the border, or this would be a comment about the iPhone...). It's basically the same thing with some fancy bells and whistles added on. Really fancy bells and whistles. Really, really fancy. No. I mean REALLY fancy. Fancy enough that I dropped the cash, bought the iPod Touch, and haven't regretted it once since I bought it. It's the same thing as what I had but enough of an advancement that it was worth "wasting" money on an upgrade.

    So long as Apple continues to upgrade the product line like this, they'll do fine. Offer more, better, and fancier, and people will upgrade. In my opinion.
    • Then they released the iPod Touch (iPhone not available (officially) north of the border, or this would be a comment about the iPhone...). It's basically the same thing with some fancy bells and whistles added on. Really fancy bells and whistles. Really, really fancy. No. I mean REALLY fancy.

      Fancy enough that I convinced my semi-retired dad that if all he needed to do was travel lightly and surf the web and do email, take short notes, reference maps and view documents and photos, he didn't need a laptop. He got an iPod touch instead, and is more than pleased. It's better than a laptop, because he's more likely to have it when he needs it. Much better than the blackberry option too, once you get used to the keyboard.

  • by Ilyon (1150115) on Thursday April 24, 2008 @01:34PM (#23186172)

    Apple is driving the market and has been doing so since introducing the iMac. Apple invests in technology years in advance while the Dells and HPs are running their businesses on a quarterly basis.

    The punditry will be surprised when they finally notice Apple's growth in the enterprise, at 2-3 times the industry rate. Anyone who's paying attention will realize that the features and capabilities that will make Apple unstoppable in the enterprise in a few years are being designed into Apple products today.

    Similar things can be said for Apple TV's prospects for becoming a more ubiquitous consumer appliance - but don't be surprised if even Apple TV shows up in the enterprise, as a device to stream corporate training podcasts hosted on a MacOS X Server.

    Apple introduces useful new capabilities that provide compelling reasons to buy new Apple products. What compelling reason is there to upgrade Windows PCs, other than for the sake of upgrading?

    • by Knara (9377)

      Apple is driving the market and has been doing so since introducing the iMac. Apple invests in technology years in advance while the Dells and HPs are running their businesses on a quarterly basis.

      Different target markets. Unless Apple is going to compete with razor thin margins against Dell/HP/Lenovo, they're really making no in-roads.

      You're correct that Apple is making impressive inroads in the consumer market, but they're still by far the minority shareholder.

  • by Apple Acolyte (517892) on Thursday April 24, 2008 @01:41PM (#23186312)
    Apple now has two highly successful, separate platforms that feed one another: it's iPod/iPhone platform (handheld) and its Mac platform (PC). As others have noted, the iPod isn't going anywhere; the iPhone/iTouch sub-platform is very compelling and has a lot of room to grow; the Mac is enjoying growth unprecedented in the platform's history (to my chagrin, largely thanks to Apple's defection to Intel, which allows people to replace their PCs with Mactels). The substantial growth seen in Mac market share will cause developers to take the platform a lot more seriously than they have in the past and may spur traditionally unfriendly developers to enter the Mac market. Apple's corporate image is great in most quarters. Now I'd love to see a consumer Mac tower for those who are never going to buy iMacs, but that's probably not coming any time soon.
  • Hooray! Apple lowered the price on SOMETHING. Oh, it was the lame shuffle with no screen or any features to it? Who cares? I think most of their stuff is overpriced to begin with. The iPod now seems more of a fashion accessory than a necessity to me. (I am not an apple hater)
    • Re: (Score:2, Redundant)

      by geekoid (135745)
      MP3 players have never been a necessity.

      People like style and quality. Apple packed both with their music player.
      Then they dominated the market. No real surprise there.

      Apple prices have lowered, and the shuffle is a great device for what it does.

      No I am not a fanboy of Apple, but these device are really good.
  • by assertation (1255714) on Thursday April 24, 2008 @02:39PM (#23187274)
    I almost went mac this year in a serious way. The prices were about right and I was tired of the hassles of the OSS world. Why didn't I go mac?

    I went to a very nice mac store, 3 times. The first time I asked one of the sales people a question I knew the answer to. I could see in her face she didn't know the answer. Instead of telling me that she gave me wrong information that could have cost me money. The 3rd time I went back I spent a lot of time playing on one of their systems to get a feel for it. I liked it very much. I didn't like the idea of having to relearn everything to migrate and I thought Ubuntu is very nice. Then a young clerk with a snotty attitude asked me to get off the chair I was using to check out the computer. I guess I wasn't as important as the class they were holding in the store. I figure if I was going to deal with snotty 20 somethings I should do it with the linux community and save myself a grand.

    Then I wanted an MP3 player.

    I was seriously considering an iPod.

    Then I found out I could not use iTunes on Ubuntu without an emulator. Then I read a few "fuck you" articles from the mac high priesthood addressed to linux people who used iPods. then I read articles about how the iPod would get changes making more work necessary to get it going with linux.

    I went on the ubuntuforums got some recommendations for linux friendly mp3 players. Then I bought a used one for $50 that does everything the iPod would have done for me and more.

    • by sxltrex (198448) on Thursday April 24, 2008 @03:40PM (#23188148)
      Wow, somebody needs a hug!
    • Re: (Score:3, Insightful)

      by ThousandStars (556222)
      The first time I asked one of the sales people a question I knew the answer to. I could see in her face she didn't know the answer. Instead of telling me that she gave me wrong information that could have cost me money. The 3rd time I went back I spent a lot of time playing on one of their systems to get a feel for it. I liked it very much. I didn't like the idea of having to relearn everything to migrate and I thought Ubuntu is very nice. Then a young clerk with a snotty attitude asked me to get off the ch
  • by MaWeiTao (908546) on Thursday April 24, 2008 @03:24PM (#23187902)
    If Apple's success is so heavily dependent on a single product I think they've got more important things to worry about.

    Honestly, I think this is a problem with American companies and media. All they seem to care about is that one hit. They're desperate to come up with the one product that will ensure success, at least temporarily. Because then all too often they seem content to rest on their laurels or worse go to extreme lengths to prevent competition.

    So what do we constantly hear from the media, nonsense about this-killer and that-killer, how a particular product is going to change everything and there apparently is little patience for methodical, evolving improvements.

    The iPod didn't just fall out of Apple's collective ass. It really was the embodiment of Apple's design philosophy and corporate vision. It also helped that Apple actually had the resources to design the device, develop the software and actually have a direct hand in it's manufacture.

    Contrast that with other companies who claim they want to develop something to compete with the iPod. In many cases, like Microsoft, they take an existing product, a Toshiba MP3 player, and customize it for their use. For that reason alone it will never be as well integrated as the iPod.

    In many other cases companies will take existing products, particularly Chinese-made products, rebrand them, maybe modify the external design slightly, and resell them here. So the American consumer gets stuck with a subpar product. In the short-term the company earns some easy money but in the long-term they've hurt their brand.

    There are many other issues here, but this is one of the bigger problems I see afflicting American companies. Many American companies don't actually make anything anymore. They've effectively dumping the engineering and manufacturing core of the business and have focused almost completely on marketing. Innovation seems to only exist within marketing departments. They're constantly hunting for new advertising gimmick to sucker people into buying more of the same.

    Instead of taking the approach of focusing on quality at a premium they're still trying to compete on price. Then they wonder why they lose to the, usually foreign, competition. And when things go south they always blame everyone and everything but their own decision-making. Granted, I'm over-simplifying a bit, but I do think it's a big problem nonetheless.

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