Tag Archives: ipod

Connecting the dots: Why the iPod changed the world?

Via Business Insider.

“You can’t connect the dots looking forward; you can only connect them looking backwards.”
                   Steve Jobs, Stanford Commencement Address, 2005

In 2006 it was clear that mobile phones and MP3 players would converge. Nokia, the smartphone leader at the time, already incorporated mp3 players in their phones. In Japan, KDDI had the most advanced mobile music service in the world, selling millions of songs per month downloaded from mobile phones.

For Apple, the iPod was at risk. At that time the iPod had become the product that had turned around Apple. iPods were more than 50% of Apple’s revenues in 2006 — see chart. Nokia was set to go for the iPod. Apple had to defend. The iPhone development was a matter of survival. Eat or be eaten.

Before the iPhone was unveiled in 2007, anyone would have bet that handset makers (and telcos) were in better place to win the race for the converged phone/MP3 player.
Few would have bet that a company with no experience in mobile would succeed to put a solid product in place so quick. In the early 2000s all main handset makers came from telecom vendors: Nokia, Ericsson, Siemens, Alcatel, Motorola, NEC coped the top of the charts. Even Sony had to join forces with Ericsson to play in the field. Microsoft venture into smartphones had given expensive and unstable smartphones after many years of experience with PDAs.

Then the genius of Steve Jobs made it. Leveraging on Apple’s core competency in making computers, they made a leapfrog. With no legacy to respect, unlike Nokia.

Today the iPhone is more than 50% of Apple’s revenue. It was the stepping stone without which the iPad had not had the form and success it had in changing personal computing forever.

The iPod today is less that 5% of Apple’s revenues. It went from 50% in 2006 to less than 5% in 2012. Had Apple failed to win the battle for the convergent phone/Mp3 player, Apple would have not even survived with a leading product such as the iPod.

It’s the perfect model for a market dominant player to lead disruption. It was the leader in the MP3 segment who drove its cannibalization and won. Cannibalize to survive. Easier said than done.

Connecting the dots
If Jobs wouldn’t have bet on the iPod—which at the time was not an obvious product for a computer maker—, Apple would not have been in such a good position to enter mobile and reinvent it. And without the iPhone experience, the iPad wouldn’t have been the hit that has changed personal computing. In hindsight, without the iPod, the tablet might have not existed as we know it.


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Microsoft needs to revamp brand

Microsoft keeps losing market share slightly and continuously, in part thanks to Vista.

But let’s admit it, Vista is not that terrible, even if far from perfect. Microsoft  monopolistic habits and greed to milk the licenses cow, make people have a negative feeling (not to say hate) about Microsoft. Steve Ballmer’s arrogance do not help improve Microsoft image, and Gates stepping out did not help either. Bill Gates, still blamed with most of the evils of Microsoft, is a person that can only be admired for what he has done to bring computers to everyone, not to mention his philanthropic actions.

And then we have Apple 2.0. The turn around of Apple after Jobs return is amazing. Driven first by the iPod, then new MacBooks and iMacs, and lately the iPhone, Apple is more than ever the  iconic brand that sets the trend. Microsoft has never raised a fraction of the passion that Apple generates in their users. And with Vista being the excuse of many to switch to Mac, it is no surprise that Mac market share grows.

And if Apple was not enough to threaten Microsoft Status Quo, then we have Google with the same kind of bet for simplicity, user friendliness and its nearly altruist services and software in the on-line world. MSN, Hotmail and Live services inherit the same greedy behavior of Microsoft: did you ever got your Hotmail account reset and lost all your emails because you did not login for 30 days? how slow was Hotmail, partly due to the flashy banners all across the page? how long it took them to match the 1GB capacity of initial Gmail? and what about lack of POP support and removal of MS Outlook support, forcing the user to suffer their ad-intense webmail?

As the browser becomes the OS (by supporting the increasing offering of Software as a Service), Mac and Linux distros become stronger alternatives to Windows. SaaS brings the OS battle on-line, and that explains also the strong interest of Microsoft to become a stronger Internet player acquiring Yahoo.

Windows still enjoys a huge market share above 90%, but its brand is lagging behind Apple’s Mac and Google. That does not have to be a fatal illness, but Microsoft should better look into it before it is too late.

Market Share data source: Hitslink

Mac gains ground on consumers

Apple has presented results for the past quarter. Apple shipped 2.3 million Mac computers in the quarter, 51 percent year-on-year growth, with a revenue increase of 54 percent. iPod sales were flat compared to last year with 10.6 million units sold. More financial details on GigaOm or TechCrunch.

Mac is quickly taking market share from Windows. Today iMac is clearly the most stylish computer for home, and MacBook is the most desired laptop for personal use. In any Starbucks one can see the increasing number of MacBooks. Apple was never a threat to Microsoft in the past, but with more and more open standards, and easily portable applications, Apple is quickly gaining ground as the computer for home (and for Starbucks). Mac is no longer a niche product but a high-end choice for consumer computers.

Steve Jobs said that “… people are really noticing the difference between Mac OS X and Windows to a greater degree than ever before. The more people understand that there is an alternative, the more people are choosing a Mac.”

On the iPod side, apart from reaching market maturity, iPods sales might be stalling due to the wait-for-the-iPhone effect, with people delaying their older iPods renovation, waiting for iPhone to be available in their markets, or simply for the 3G iPhone. Still, sales of iPhone were relatively soft; 1.7 million units in Q1 for a target of 10 million in 2008. Again buyers maybe waiting for the 3G version, or for the price to come down…

Steve Jobs Keynote 2008

2008 Apple’s keynote has introduced great products: MacBook Air, iTunes Movie Rentals, AppleTV Take 2, new applications for iPhone and iTouch, and Time Capsule.

Keynote highlights in nine minutes from YouTube:

If you only have 60 seconds to view the 90 minutes keynote, click here.

For the full keynote go to events.apple.com

Apple Historical Keynote at MacWorld 1997: Steve Jobs returns.

This is the full video of the Apple keynote at MacWorld in 1997, just after Steve Jobs returned to Apple as interim CEO. In this historical keynote, we can see Bill Gates joining by videoconference. But even more impressive it is to see how Steve Jobs set the foundations for a recovery that did turn Apple from a precarious condition into the iconic brand that is transforming music industry, mobile phones and fashion laptops.

This keynote from Jobs is a masterpiece on business strategy. Business schools should show this video to illustrate what many books only theorize on strategy, core competencies and corporate culture. Steve Jobs explains on which Apple would focus to reverse the trend. In 1997 few people could imagine how relevant and influential Apple would become in the coming years, led by Steve Jobs.

Jobs has always used these January keynotes at Mac World to introduce new products. Such is the impact of Apple keynotes, that someone has made the analysis whether it is possible to make money off the Apple keynote talks given by Steve Jobs?. See the interesting table in that article showing how much Apple stock won/lose between the day before and after of previous years keynotes.

For 2008 keynote, there are rumours on Apple presenting an ultra thin sub-portable laptop and 3G iPhone . Will that be enough to make money with this year keynote? Or is it already discounted by the market?

See Wikipedia entry on Steve’s key notes for more historical background.

Will iPhone succeed in Japan?

No doubt, iPod is extremely successful in Japan, being one of the top selling iTunes stores. When iTunes Japan opened in August 2005, it sold one million songs in four days!! No wonder why the price of iPod in Japan is lower than in many other markets. The Japanese do download songs legally.

Some reports say that iPhone will be launched in Japan brought by Disney, as an MVNO over the Softbank network. See the story.

Mickey Mouse MVNO would bring content from Disney to the iPhone, in what could be a very compelling offer.

iPhone support for UMTS (3G) will be a pre-requisite to launch in Japan. With the Japanese obsession for clamshell phones, will iPhone surrender to Japanese habits, or will Apple succeed also in transforming the mobile phone market in Japan?

Apple already transformed the music industry. It seems easier to convince Japanese users of the advantages of a touch screen

Japan, Globalization and Telecoms

Shinjuku Harajuku Akihabara

I have been in Tokyo this week, almost 2 years after I spent a few months living there.

The Telecom market has evolved specially in mobile, with eMobile as a new 3G player and with Vodafone, unable to cope with the specificities of the market, selling their Japanese operations to Softbank.

Japanese are still addict to emailing with their phone while in the train. Around 80% of the passengers in a given wagon will have their clam shell handset open and will be thumbing intensively on the phone keyboard.

What is new is that you start to see people watching TV on their handsets.

What is not new, is that no one has any phone conversation while in the train (or while in restaurants) as they consider it impolite.

Japan has always been an example of one of the few developed countries where Globalization has had less impact, specially in habits and culture.

Except for Starbucks, McDonalds, Luois Vuitton, Baseball and iPod few overseas concepts have succeed in Japan. What is more, Japanese could argue that they have influenced more the World with their culture, than the World has influenced them: Karate, Karaoke, Sushi, Toyota, Manga as well as PS3, Nintendo, Sony Walkman… One of Japanese frustrations is not to have invented the iPod themselves.

But no wonder that globalization is impacting Japan, specially in the corporate arena. As The Economist published last week, Japanese companies are incorporating western business concepts to the Japanese style what made them so successful in the 80s.

The Telecom industry also give us an example of how globalization is difficult to resist.

Japan was the first country to go 3G, but NTT Docomo made it so specific, that only japanese vendors (NEC and Fujitsu) would cope with the market adaptations.

In recent years, new entrants (eMobile and Softbank) are relying on overseas vendors and on international standards, so that they can benefit from global economies of scale and have better equipment costs than what NTT or KDDI get from Japanese vendors with almost no presence outside of Japan.