How Apple Will Change the Rules (Again)
While most of the tech bloggers were going gaga last week over Apple’s announcement of new iPod devices and wondering when the iPhone is going to debut, a few guys with much more insight than me were writing about the real stories behind the “iTV” headline.
I highly recommend both of these outstanding posts.
Carl Howe over at Blackfriars’ Marketing writes a great commentary predicting Apple’s entry in the flat panel TV market. Lots of big boxers like Home Depot and Office Depot are announcing their entry into this rapidly growing market, following robust profit reports from Circuit City and Best Buy. While the success of these Johnnies-come-lately is dubious, Howe makes a great case for Apple’s winning in the TV business.
Apple has design icon Jonathan Ive (among many other great designers), one of the best and most powerful brands in the world, incredible differentiation, and is repeatedly ranked number one for product support. It has a chain of 161 stores that generate 67% of the revenue of Best Buy with 10% of the floor space. And most importantly, Apple sells experiences, not low-priced hardware. They’ll offer two or three choices to avoid the tyranny of too much — and amaze everyone again by making more profits on fewer products.
- Leverages 4 key competencies (customer inertia , the power of “the culture to influence”, large software development capability, & technical leadership),
- Will lead to success, and
- Will simultaneously confuses competitors and the analysts.
The result, Martellaro predicts, is that Apple has a strong chance of owning the game in home video entertainment.
Today, the home entertainment industry is confusing. Customers muddle through. Some dare to ask questions; some just plug it all in and hope things work. Issues linger: Is my 1080i HDTV already obsolete? What is HDCP, HDMI, de-interlacing, scaling, 802.11n? Should I go with cable or satellite? Will Blu-ray finally win? No one company has stood up, with courage, and said: “We have a vision. This is how to do it. Follow us.”
Now, Apple is starting to provide that leadership in home theater. They’re defining an architecture, putting the product pieces into place, and developing leading edge products.
But most importantly, Apple is inserting this orchestrated scheme of pre-planned and well defined technology into a massive technology consumption machine fueled by the consensus thinking on the Internet. If it sucks, it’s history. If it’s cool, it’ll be embraced, and any company that tries to force the issue against this massive thinking machine will fail.
The platform dubbed “iTV” will be revolutionary. Apple has demonstrated the ability to bring simplicity to complicated things and they appear to be poised to do it again for home theater. What’s more, iTV will bring video iChat and the internet to the living room. When they introduce a flat panel display, you can bet it will have an “iSight” camera built into the top bezel just as their computers do now. iChat, along with inevitable higher bandwidth connections could revolutionize home-based communications and the “internet from the sofa” will certainly bring increased impulse buying online, including of course, movies and more from Apple’s iTunes store.