Myths, Reality, Predictions

Thank providence nobody in charge of anything reads this blog. It gives me the freedom to say the following:

Tech analysts are morons. Okay, not all of them but most of them. Enderle, Ou, Dvorak, most of the other writers penning tech pieces for various papers base their writing on something other than observable facts. People write about Apple as though it was just another tech company with the same corporate mindset as Microsoft. Apple is so different from Microsoft that comparisons are not even possible. Let me blather on about some of the idiocy that gets repeated ad nauseam. Not that you could stop me.

Myth one: Apple's strength is its loyal fan base.

Reality: Whoever makes that statement is just plain lazy. The loyal fan base just happened because of Steve Jobs' reality distortion field. That's all. That's it. His Steveness speaks; the masses march like zombies. Your shoulders are staying warm from the insulation provided by your assfat if you believe that. People are buying Apple's products. That is Apple's strength.

Myth two: Apple's growth is largely due to hype.

Reality: Apple's market cap is up like 4000% since Steve Jobs took over in '97. It's all the reality distortion field, right? Wow. It couldn't be the products. I mean, Apple's don't even have Windows installed on them when they ship, do they? How pathetic is that? No. Wait. Why is that Mac thingy gaining market share? It doesn't crash, hang, or ask Steve Ballmer's permission on a daily basis? I don't need to type Ctrl-Alt-Del to make it run? Huh.

Myth three: Leopard and Vista are similar enough for comparisons to be made.

Reality: XP is easier to use and less of a pain in the ass than Vista. Tiger was better than Vista. Leopard has cool stuff that Tiger didn't have. OS X is fun to use. Windows is work. Everybody I know who has spent any significant time with OS X becomes a switcher. Leopard is more similar to a side order of french fries and freshly chilled ketchup than it is to Windows.

Myth four: Apple is the new Microsoft.

Reality: Puh-leeze. Apple tries to figure out what the customer is willing to buy so they can build it and sell it to me. Apple is so confident that they'll sell a lot of stuff that they're willing to take the miniscule losses to piracy. It's working for them.

Microsoft tries to figure out what the customer is trying to steal so they can lock it down and charge me another dollar for it. That worked okay until recently. When there was no apparent choice, the lemmings marched off the cliff. There is an obvious choice now.

Apple sells me stuff and trusts me to be honest with it. I bought the family pack of Leopard. The difference is that I paid $70 extra for a license to install it on more computers. I didn't have to. I could have bought the single user version and shared it with everybody I know. Nobody checks. Why wouldn't I? Apple trusts me. I feel obligated to honor that.

Microsoft sells you (not me) a version of Windows with a 32-digit verification/registration code. It calls the mothership from time to time to make sure you're authorized to use this copy of this software on this computer. Microsoft doesn't trust you – you thieving bastard – and they build in puzzles for you to solve to see if you can beat them. It's a game. It isn't about trust. Trust is discarded at the very outset, long before the product even gets to market. So it's just like any other computer game. If you can do it, it's okay. Screw morality.

Who's going to win this computer game in the marketplace; where people vote with dollars?

I have a guess.

Myth five: Apple is strictly a consumer electronics company and either can't or won't go after the enterprise market.

Reality: The difference between enterprise and consumer is the hour of the day. A consumer is an IT manager's daughter in college, and an IT manager on his day off. The consumer works in enterprise or knows somebody who does.

Enterprise is a new college graduate IT guy who spent his scholastic years running an MB, now sitting in front of XP, wondering why the company's computers suck. Enterprise is people who are consumers in their off time; people who own iPods and iPhones and MacBooks at home. Eventually VPs and CEOs will wonder why they have to use cheesy shit and call tech support continually at work.

Apple will continue to make gains in the consumer marketplace. That will translate to gains in enterprise.

Myth six: Apple is in a precarious place and can't afford to stumble in its competition with Microsoft.

Reality: Apple has no competitors. None. There are people who think they're in competition with Apple, but they're not. Apple is almost completely independent. Apple can change direction on a dime. Apple can redesign every product in the lineup and modify all the software to fit the new design.

Their competition? Hardware companies, software companies, phone manufacturers, phone software developers, mp3 player manufacturers, a few websites, all of whom have to get approval and buy-in from all the others in order to make competitive decisions. All the other companies are so interdependent and bureaucratic that they can't change a frigging typeface or add a feature without coming to a multi-company, multi-committee, multi-board-meeting decision.

Apple can afford boo-boos. AppleTV springs to mind. Everybody is saying that represents a stumble on Apple's part. It failed to set the world on fire on the day it was introduced. Keep watching. One blogger thinks AppleTV is about to be huge.

Myth seven: Apple is dependent on content providers for iTunes' success.

Reality: The iTunes store is everybody's favorite place to buy digital media. When content owners don't want to sell their stuff in the iTunes store Apple isn't hurt anymore than Safeway would be hurt if Jif didn't sell their peanut butter there. Apple created a successful storefront in iTunes. If companies pull their stuff off the iTunes shelves they reduce by one (hugely successful and popular) venue the number of places they can sell their wares. NBC-Universal didn't teach Apple a lesson by pulling their stuff out of iTunes. All they did was throw away revenue. Apple didn't suffer.

Warner won't hurt Apple by selling their non-DRM tracks on Amazon instead of the iTunes store. Non-DRM mp3s play just fine on iPods. Amazon's selection still sucks. It's still a lousy place to buy stuff – copy protected or not. I have yet to find a track I want on Amazon that I can't find on iTunes. Amazon does seem to have a larger selection of karaoke tracks than iTunes. Yippee.

Here's an experiment. Try to find some of Paul Carrack's stuff from the late seventies and early eighties. Paul Carrack is the Kevin Bacon of the music industry. He's recorded with Eric Clapton, David Gilmour, and Ringo Starr to name just a few. He has a pretty good ouevre as a solo artist, too. He's an excellent vocalist and musician. Some of his best stuff isn't available anywhere. I'd love to download I Live By the Groove, and Mike + The Mechanics Silent Running, but I can't find them at Amazon or iTunes. That's absurd; and it's because the record companies are stupid. Apple isn't making those decisions.

Prediction: Apple's market share will continue to increase. The iTunes store will become even more powerful as an online storefront for digital media. Apple will stage a noticeable incursion into the enterprise market in 2008. Also in 2008, Apple's stock price will at least double. Again.

Apple isn't re-writing the book on how to conduct a successful business, but they do appear to have re-read it.