Get Ready for Apple to Murder the Status Quo One More Time
How many times has Apple disrupted a major industry? You've got the iMac, the iPod, iTunes, the iPhone, the App Store, and that list doesn't even count the original Macintosh. With the iPad just around the corner, Apple could be getting ready to change reality for at least two more sectors: The cable TV business and the e-book arena.
Feb 16, 2010 5:00 AM PT
As near as I can tell, Apple is the ultimate tech industry disrupter. In recent memory, Apple's iPhone put applications in the hands of millions of consumers, wrenched a good measure of control out of the cold grip of cellular service providers, and sparked a fire of touchscreen smartphone competitors. Before the iPhone's multi-touch, sure, there were touchscreens, but the dominant pundit discourse put the need for a physical keyboard high on the list of smartphone success factors -- but it turns out you don't really need one to succeed.
However, there is so much more to Apple's consistent industry disruptions, and now with the iPad, we're on the verge of seeing a few more.
Quick Rewind to Build the Foundation for the Whole Argument
We could go back to 1984 and the graphical user interface and the little Macintosh all-in-one, but I'd rather skip ahead to 1998, when Apple introduced the iMac. Remember the translucent Bondi blue case? Apple quickly followed with tangerine and grape and a whole slew of bright colors that eventually made their way to the clamshell iBook. Apple's colors are even evident today in its lineup of iPod nanos ... quite a rainbow.
Before the iMac, most every computer I remember was some form of beige, possibly gray, and damn, they were fugly. Want one of those in your home? How about the massive clacking keyboards? There's a reason iMacs started popping up in TV sitcoms. More to the point, Apple's iMac success changed the PC industry into a place where consumer-oriented design mattered. Other manufacturers have tried, with varying levels of success (shout out to Sony's VAIO series here) to make pleasing design an integral part of the user experience. But few have done as consistently well as Apple.
There's more, though. Remember the cornucopia of consumer products that suddenly started sprouting out in bright shades of translucent plastic? See-through red alarm clocks and bright green phones? It must have made Apple CEO Steve Jobs shiver a bit, which may have sparked Apple to return to more classic colors like the white iBook.
Design Is One Thing, How About Music?
As Apple delivers its 10 billionth music download, the company has been at the heart of the music industry's success, failure and paralysis. Before Apple introduced the iPod, iTunes, and an easy way to buy single tracks of songs rather than full CDs packed with a few good songs and lousy filler material, consumers where stuck buying singles for US$3 to $4 a pop, shelling out for entire CDs, or illegally sharing songs. Apple changed all that by creating a market for legally purchased songs that were easy to consume and use. Granted, they weren't particularly portable beyond Apple's iPod and iTunes universe, but you can also credit Digital Rights Management (DRM) agreements with labels and rights holders for those shackles.
Still, if Apple had not come along, it's very easy for me to imagine a situation where music labels would have hunkered down into asinine DRM efforts that would have irritated consumers far more than today ... and sparked an even larger illegal music trading industry. The RIAA attorneys would be even richer than they are now.
At the same time, Apple's enormous iPod and iTunes success have turned into a stifling juggernaut -- who can compete digitally with Apple now? Amazon.com is selling DRM-free MP3 tracks (thank you, Amazon, for helping turn the DRM tide), and the Microsoft Zune and Zune Marketplace still, well, exist. Then there's fairly innovative online streaming sites like LaLa.com that let you buy and "own" music in the cloud for just 10 cents a track -- oh, wait, Apple snapped up LaLa, so technically that browser-based music service is now Apple's, too.
One Word: iPhone
After Apple and Motorola teamed up to produce the regrettable Motorola ROKR E1, Apple clearly realized it could not work with established phone manufacturers or within the confines created by their pairings with cellular service providers. Hence, the iPhone. And the iPhone proved so many things. First, it proved that consumers would line up for the privilege of shelling out hundreds of dollars to finally buy a phone that was easy to use and offered the core applications they wanted on their phones -- music, video, email, Web browsing, maps, contacts, calendar, and, of course, ease-of-use. (Visual voicemail was just a wonderful side benefit.)
Second, and not that I want to write a list here, but Apple and AT&T established the $30-per-month data fee. It simultaneously made owning a mobile phone more expensive -- and yet cost-effective, too. Prior to the iPhone, for the majority of consumers not using some corporate smartphone plan, browsing the Web or doing email from a phone was not only a pain in the ass, it could be expensive, too -- who wants to be charged by the mysterious kilobit? Remember the "walled gardens" that mobile service providers and manufacturers were trying to build for their phones? If you wanted online, you had to go through their pathetic little gardens of content -- not the real Web. And if you wanted to buy a song or ringtone, you had to essentially flip your wallet upside down and start shaking.
While the iPhone pioneered a new mobile phone experience, it also tore power away from cellular service providers. Where on the iPhone do you find the AT&T logo? You don't. It's not there. AT&T doesn't get to put its brand on the device. Apple owns the device, and that's the way it is. How many other nice-looking smartphones are marred by some obvious and ugly placement of Sprint, Verizon, T-Mobile or AT&T logos? This is a small concession, but it points to broader shifts: case in point, Google's Nexus One. Google is a tech media company that produced its own phone. It would not have happened this quickly without Apple paving the way with the iPhone -- if at all.
Another interesting thing about the iPhone is how Apple controls the user experience -- to activate the first iPhone, you had to take it home, connect it to your computer, activate it through Apple, and sync it with iTunes. By doing this, Apple married the mobile device to the computer from the moment of purchase.
Enter the App Store
Apple has had the most profound influence on mobile computing. No way around it. Even if you forget games entirely, Apple's App Store delivers thousands of useful applications for a mind-boggling set of users around the world. If you think the Android store or Microsoft's efforts are anywhere near as compelling to the world as Apple's efforts, you're quite loony. Case in point: Apple took the relatively complicated idea of applications in the palm of your hand, and through a series of ingenious television ads, showed the world how easy it could be to do amazing things with a smartphone. Grandmothers learned -- and bought iPhones.
Not only did Apple set the bar for easy app browsing, buying and management, but it also created a developer program that brought thousands of developers into the Apple fold. For a nominal starting fee, developers buy into the Apple universe, and in exchange, Apple hosts their apps (or rejects them, or keeps them waiting), and takes a 30 percent cut. While most developers don't get rich, it's not a bad program overall. According to Flurry Analytics, January saw a whopping 1,600 new iPhone OS application starts in January, which is triple the average for the preceding three months. The program is not slowing down, and there's now more than 140,000 apps in the App Store.
Meanwhile, Apple has singlehandedly brought to the forefront the whole notion of jailbreaking and hacking mobile devices. Before the iPhone, hacking a device to customize it and let it run different applications was a little-understood dark art -- now, hundreds of thousands of people have not only jailbroken their iPhones, they have a rudimentary understanding about device freedom and locked-down environments. I believe that Apple's (sometimes irritating) control over its App Store has actually done a good thing in that it has brought attention to unlocking and jailbreaking devices that are sold hobbled to consumers, and it happened because the iPhone as a device is so freakin' awesome.
And Now, Look Out, Here Comes the iPad
For all the praise and derision being heaped upon the upcoming Apple iPad, it already has the potential to disrupt industries. Let's start with something close to my heart: TV. I'm a big fan of the HDTV, but more importantly, I'm only a fan of several select shows and sporting events. Beyond the stuff I actually consider good, the rest is a huge, annoying time-wasting mess. Without a DVR, I wouldn't even have satellite. The challenge to making television better, in my mind, is getting access to the good stuff easily, wherever I am. I can do a little with my iPhone, of course, via buying shows for $1.99 or $2.99 on iTunes, or I can stream some via apps like TV.com. I could also shell out for a Slingbox, but I've got price and hassle resistance that's been keeping me from trying it.
If Apple, as is now widely reported, is really trying to get television content owners to let Apple sell standard-definition TV shows for just a dollar, that's a compelling new price point. Suddenly buying a few seasons of only the shows you really care about becomes more cost-effective than paying a cable or satellite bill every month. It's not perfect, but it's disruptive. Meanwhile, another Apple rumor says the company wants to offer an a la carte iTunes-like subscription to premium content for $30 a month. The premise? Buy the content you want and don't waste your life surfing through a few hundred channels of crud.
Of course, neither of these things might pan out, but if they do, television could see a massive change in distribution and consumption. How might this affect reruns and syndication rights and residuals? I have no idea, but it's not just a problem for Time Warner Cable -- some television shows are profitable not because they air just once in primetime, they're profitable because they air as reruns, then they air on some other channel, then there are DVD sales, then there are marathons on even more obscure channels, and all the who-knows-what-else that's tied up into the production and delivery of a show.
What about e-books? The latest rumor puts Amazon.com reacting to the iPad by possibly offering its e-book-leading Kindle free to its Amazon Prime customers. What would this do? Wow, it would turn a lot more consumers into e-bookworms. I'm an Amazon Prime customer. If Amazon sent me a Kindle, I would no doubt put it to use. If I like the experience, I could conceivably buy more books than before (but I'd stick with paperbacks for backpacking). Sure, I might eventually gravitate to an iPad, but there are plenty of consumers out there who were not going to buy any e-book at all ... who might get into ebook reading, all because Apple is disrupting the burgeoning industry.
Of course, if the iPad is a runaway hit, it could also spark more e-book sales, too. Either way, the iPad is a catalyst for ebook consumption, and it hasn't even yet hit the hands of a single consumer.
While we're on the iPad topic, I want to give a shout out to MacNewsWorld readers macbrewer and psngray who commented on my column last week. They rightly point out that the iPad may disrupt the netbook, laptop and home computer industries -- after all, considering the basic computing requirements of many consumers, for most of their computing activity, the iPad will get the job done admirably. We're talking Web browsing, emailing, online banking, consuming media, and social networking. All of this can be done easily with an iPad -- and maybe even be quite enjoyable. The fallout? Maybe when I go to buy a new MacBook Pro, I'll instead buy a more powerful iMac and get an iPad to handle my mobile needs. Not a bad pairing. Or, instead of buying a touchscreen iMac (if Apple ever gets around to delivering one) for the kitchen, I'll buy an iPad. Start looking to education and textbooks, and suddenly iPads could be a disrupter in these spaces, too.
Just months ago, the smartphone was the harbinger of mobile computing, limited to a screen that could fit in your pocket. But now, with the iPad, a new world of options is starting to open up.
The point: Apple doesn't just make a great, well-designed device. Apple makes end-to-end products that make people rethink how they want to interact with their world, and then start ushering in change. Microsoft might have kick-started this world with its own device (like the rumored Courier), but the sad fact is, Microsoft has not.
Google was a big disrupter with its search engine and new advertising model, no doubt about that. And Google is disrupting Microsoft's Office application suite near-monopoly with its own cloud-based services, and email that you never throw away, too, but I'm not sure that Google is on the same level as Apple when it comes to changing the status quo. Craigslist is killing newspaper classified ads, but that's about it. Dell had a serious hand in building reasonable quality PCs at low costs, thereby driving down the cost of PCs into consumer-friendly commodities, but beyond cool build-to-order pricing, I'm not sure Dell wields much influence with consumers or broader markets. Perhaps I'm missing some major industry-changing tech companies that do this time and time again, but in my opinion, Apple ranks at the top as the ultimate disrupter -- at least with everyday consumers and the things they love.
MacNewsWorld columnist Chris Maxcer has been writing about the tech industry since the birth of the email newsletter, and he still remembers the clacking Mac keyboards from high school -- Apple's seed-planting strategy at work. While he enjoys elegant gear and sublime tech, there's something to be said for turning it all off -- or most of it -- to go outside. To catch him, take a "firstnamelastname" guess at Gmail.com.