I know a lot of you will be spending time with your families and, if you are like me, you may be looking for some things to talk about that aren’t religion or politics but just as likely to result in a heated holiday “discussion.”
Since the iPod, Apple’s valuation has shot up like a rocket, while Microsoft’s stock hasn’t moved that much. You can see why Microsoft might want to emulate Apple, so one discussion could be on that dynamic.
As for Apple — after last week’s column, I heard from a couple of people who pointed out, using an Apple-funded study, that an independent study was in error. That caused me to once again realize how well Apple manages its artificial image, so another could be on what Apple is currently concealing.
Finally, it seems strange, but most of the folks I see active on the topic of open source seem to be less than open about who they actually are — let alone who they work for and what their agenda is. So, your final topic could be, should “open” really mean open in all important things, including the identity of the person you are being “open” with?
Topic 1: Is Microsoft’s Problem Apple Envy?
Back in the 80s, before Steve Jobs left, Apple and Microsoft worked closely together. Apple did the operating system, and Microsoft did the application stack, and the two companies at least seemed to be collaborating with each other.
As I understand the history, Microsoft wanted Apple to license its OS so that it could be sold on a variety of hardware. Apple said no, Microsoft created a clone in Windows — which originally really sucked — and went on to prove its model was vastly more profitable than Apple’s.
When Jobs returned, he refocused the company on hardware. Apple actually licenses the core of its OS, which is Unix-based, and focuses on design and usability. While this made the company a niche player in the PC, workstation and server markets, it made it dominant in the MP3 space.
Today, more people touch Apple through the iPod than through its PCs. As a result of focusing on what it does best, Apple is stronger than it has ever been before — but still has nowhere near the strength or influence of Microsoft.
However, in terms of Market valuation, Apple is growing like a rocket, while Microsoft is relatively flat. Increasing valuation makes a company more attractive to investors and employees. It also can make a company a much better place to work.
Apple is doing well, in my opinion, because it is staying close to what it is expert at, and it is admittedly out-marketing every other player in its segment. Microsoft isn’t doing as well, because it seems to have forgotten — and so is not focusing on — what it should, and demand-generation marketing is clearly not its strength.
If you look at both the Zune and the Xbox, they play to Apple’s strengths — not Microsoft’s. Microsoft should be striving to be in every game system, not trying to compete with game systems, and it should be trying to be in every music player, not building its own.
The Zune makes it virtually impossible for Microsoft to ever be the standard underneath MP3 players, and the Xbox makes it virtually impossible for Microsoft to be — as IBM Microelectronics is (if you remember OS/2 that is true irony) — in every game system.
Without Zune, there is even a possibility — granted, a very slim one — that Apple might license from Microsoft. With Zune, there is none. The music and movie industries would love to just have one standard — see how much they like the whole Blu-Ray vs. HD DVD thing.
A world where Microsoft was underneath every game system would have lower cost games, greater game portability, more common features, and lower overall risk.
My view is that if Microsoft want’s Apple-like success, it needs to stop trying to be Apple and, like Apple, return to its roots by focusing on being a better Microsoft and making its partners successful.
Topic 2: What Is Apple Hiding Now?
Last week, I mentioned that Forrester had released a study that showediPod sales dropping dramatically, and I took the opportunity to rant on DRM (digital rights management), because I think downloading songs with DRM limits is stupid — and I think the RIAA (Recording Industry Association of America) treating folks that actually buy their music as criminals is really stupid.
The Mac folks made their usual matureresponse, and they and several other folks pointed to a ComScore study that supposedly refuted the Forrester work.
As some of you know, I’m an ex-Forrester research fellow myself, and while I didn’t work on the numbers side, I know the firm’s methodology is solid. More important, I know Josh, the author — he was sort of my opposite number on that side of the house — and he typically does excellent work.ComScore, on the other hand, does custom work for vendors. What it does is valuable, but if Microsoft were to use a ComScore study to disprove an IDC or Forrester study, I doubt many would be foolish enough to believe it. I’ll bet not a single Apple “journalist” actually looked up what ComScore did before avidly publishing the company’s results. Suddenly, vendor-funded studies are ok?
This is similar to what happened a few weeks ago, whenMetafacts, another — but smaller — numbers house,published a study with far-reaching implications, which also mentioned that Apple’s installed base was around 55 years old. The study implied that Gateway was the more common brand for the younger crowd.
The age-55 finding seemed consistent with my own observations, given that Apple lost the education market and seems to be big with retired folks — it is easier to use after all. This was followed bystatements from analysts and Apple itself that seemed to focus on observations on people in Apple stores to refute the study.
I think if you compared who goes into Cadillac dealerships with who is actually driving old Cadillacs, you would also see there is a huge difference. Ever wonder what people do with their old Macs? The very fact that publications would accept challenges to a study based on observations of store traffic is, well, consistent with Apple.
For those of us who really follow Apple, it is common knowledge that the company you see from the CEO on down is a construct. The public “Steve Jobs” is a character created by Apple’s agency played by a guy named “Steve Jobs” — that’s why Apple doesn’t like the Jobsbiographies — they break the image. Had they gone the Ronald McDonald route, they could probably keep the name and change the guy.
The entire point isn’t to disparage Apple — it does a great job owning its identity. It is to suggest that when a company is that good about concealing things, maybe it is wise to be just a little skeptical of what it says. Remember, this is the company that said it would never move to Intel — while it was working to move to Intel.
Topic 3: Should ‘Open’ Apply to Open Source Folks?
Open source is a powerful populist concept and movement. Many of the known principals are named and operate under their own names. However, I’ve become concerned that so many of those who seem to be driving the dialog are people we don’t know, because they hide behind contrived IDs.
I write on security as well, and I’m working on a piece on vulnerabilities. As most of you know, phishing attacks are becoming the most successful — and they are increasingly being used in a variety of ways. The wholepretexting thing that blew up on HP was a derivative of a phishing attack.
Now, even when identity is important, phishing can work — but you would think it would work like a hot knife through butter where identity isn’t important. How do you check on someone if you don’t actually care what their name is?
However, the bigger problem is that a government or a vendor could step in and easily influence the discussions — promoting those they like and disrupting those they don’t without much chance of actually being caught.
Finally, there is just something weird about a community of people who promote “open” who don’t want to be open with their own names and qualifications. Openness is supposed to improve quality, but if we don’t know if a person in a discussion is actually qualified to talk on a subject, wouldn’t you think the result would be lower quality?
So that’s my holiday gift to you. Have a wonderful time off, enjoy your family, and stay safe.
If you want something to read to the kids, here is agift the Mac folks gave me a few years ago, and it is truly precious — and very well done.
Rob Enderle is a TechNewsWorld columnist and the Principal Analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.
"since the iPod, Apple’s valuation has shot up like a rocket, while Microsoft’s stock hasn’t moved that much."
Might be worthwhile to compare market caps before your ‘apples-apples’ comparison of changes in valuation. Apple’s mkt cap is ~$69BN, Microsoft’s is nearly $300BN. Prior to ipod, Apples market cap was closer to $20BN. At nearly 15x the value, I’d say Microsoft will never be as volatile as Apple, and emulating volatility probably isn’t something Microsoft is after anyway.
Using screen names, pen names, nick names, (nom de guerre et al) does not make things inaccurate or even "shady". Its a long established practice that predates the internet by one or two millenia (no sarcasm). Just like using your real name would make anything you or I say any more accurate, people have been wrong since before there were others that cared if someone was right or wrong.
Of course Open Source is open, for example every line of code in the Linux kernel can be traced back to it’s original contributor, and always can be. In addition anyone, you, me, great aunt Fanny, can download an inspect every line of that code.
The fact that some people choose not to reveal their actual name and instead post under their nick does not mean that they are unknown, and because the software in open Source is freely available for inspection, anyone at any time can verify anything said about open source software.
On the other hand we have no way of knowing anything about proprietary (closed source) software, even if we know all about the qualifications of the person speaking. For all we know they are merely supplying us with marketing copy.
Speaking on behalf of comScore, I must take issue with the insinuation made in your article that comScore’s studies are somehow "suspect" when they’re funded by a vendor. I can assure you that whether funded by a client or not, we objectively report what our data are saying. To suggest otherwise is incorrect and irresponsible.
I also want to point out that our study of iTunes sales trends was NOT — as you state — funded by any client. It was, rather, an analysis we conducted "on our nickel" using the comScore database (which, with 1 million people, is about 100 times the size of the sample Forrester used). I would further point out that the sales growth rate we reported for iTunes(up 84% in 2006 versus the seasonally equivalent year ago period)has been corroborated by independent reports from Piper Jaffrey (using Apple data) and NPD. Additionally, both Nielsen SoundScan and the RIAA have published data showing that total music downloads are up about 70% this year. Only Forrester is claiming that iTunes sales are down — which Apple itself has strongly denied to be the case. How much more evidence does one need before concluding that something seems AM iss with the Forrester report?