Is Apple in danger of losing its following?
When the iPhone first hit store shelves, Apple was on top of the world. Not only did the company enjoy the biggest product release of the year, its stock price was on the rise, Mac sales were soaring and, for the first time, it looked like Apple might be able to supplant Dell and HP as the proven leader in the hardware business.
The Great Unlockable
(Credit: CNET)But just a few months later, it's amazing how quickly things have changed. Mac sales are still strong, but the iPhone has become the topic of heated debate, Apple has come under fire for dropping the iPhone price too early and too substantially, and its iTunes Store is under attack from content producers and new, formidable competitors.
Could it be that Apple has lost its touch and is doomed to follow the path of Microsoft--loved, highly regarded, then utterly hated? Will the Mac faithful finally lose confidence in the company it feels so strongly about? Even worse, will Apple's two big moneymakers--the iPhone and iTunes--meet an early demise? It could happen.
The iPhone nightmare?
Since the iPhone's release, I and over a million others rushed to stores to get our hands on the year's hottest device. And while it may have done everything some people wanted, others found that while it was a great device, it needed additional functionality. For that reason, users began to hack the iPhone and make it do the things they wanted.
As I've mentioned before, there is certainly no crime in hacking an iPhone and as an avid AppTapp user, I've done it myself. And while Apple did not specifically threaten those people who hacked their iPhones, it did fire a warning shot at those who unlocked their iPhones in saying that a future software update will render an unlocked iPhone useless.
If Apple decides to follow through with this threat and release a software update that will "brick" the iPhone, the company should be ready for an extremely hostile user base and ramifications that will affect every device it produces. Some are naive enough to think that Apple can do no wrong and its cult following will stick with it through thick and thin, but I disagree. If Apple decides to brick iPhones, no one will be its friend.
But then again, there will always be some who claim Apple was forced to do it by AT&T and it should be doing it, but I think that's pure rubbish. If Apple releases a software update that will brick iPhones, it has nothing to do with AT&T loyalty and everything to do with making as much money as possible through questionable practices.
At this point, no one really knows if Apple will release a future software update that will brick iPhones, but I can guarantee you that if it does, the PR crisis that will ensue will far outweigh the price drop debacle.
So, Apple, if you want to play hardball, be my guest. But realize that if you follow through with this ridiculous threat and you become the company that bricks unlocked phones, you will surely face the wrath of a hostile public that doesn't care about line 347 in your 100-page contract with AT&T and couldn't care less if you owe AT&T money if unlocked iPhones are allowed. This public, including those people you rely on as the "buy anything and everything Apple," will not stand by and take punches without throwing a few back.
A bricked iPhone would be an opening salvo in a battle that you don't want to fight. Trust me, do not lose sight of the fact that these current iPhone owners will remember what you've done when you release iPhone 2.0--if there even will be one after this possible debacle.
iTunes under fire
To make matters worse for Apple, Amazon has officially unleashed its music download service, which is currently in public beta right now. And after using it for the last hour and downloading a handful of the 2 million songs available, I can say that it's just as simple to use as iTunes. Even better, it allows you to download software that will take the MP3 and import it directly into your iTunes library. And if that wasn't enough, some (but not all) songs are just 89 cents, instead of the 99 cents or $1.29 we pay on iTunes.
But perhaps one of the most compelling reasons to use this service is that it's online and the songs are DRM-free. By simply surfing your way over to the site, you can peruse the selection of songs and download it in a matter of seconds. Much like iTunes, it's simple and easy. But unlike iTunes, you can do what you want with the songs you buy, when you want.
After using it, I can say with all honesty, that I believe this service could give Apple a run for its money. Just the ability to add songs to iTunes is enough for me to use it and believe it or not, some songs that you can't find on iTunes can be found on the Amazon service.
iTunes vs. Amazon
(Credit: CNET)iTunes is in deep trouble. As a person who owns three Macs and a Windows box that runs iTunes, I'm keenly aware of what the service offers and doesn't offer. And while the Amazon service won't let me download 24, it will let me own my music, and for a person who listens to all kinds of music on a number of different devices, that's extremely important.
One of the most ironic aspects of this Amazon release is that almost 1 million DRM-free songs are 10 cents cheaper than a song with DRM from iTunes and 40 cents cheaper than a DRM-free song from iTunes. Is it just me or does the music industry dislike Steve Jobs and Apple more than we thought? Why was Amazon able to get that kind of deal, but Steve couldn't?
In just a few short months, a fairy tale could quickly become a nightmare. The iPhone--Apple's ticket to the future--is in danger of being hated, and iTunes--the key to the iPod fortune--is facing a stiff competitor with enough traffic and capital in the bank to give it a run for its money.
Could it be that the golden years of Apple are behind us and the dark days are coming on strong? I don't know, but time will certainly tell.
Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
Give us a break, Don? If anyone has ?Jumped the Shark?, it?s you.
Take one look at Apple products (iPod, iPhone, Mac Book Pro, Mac Pro, iWork, Leopard), and compare them to the competition (Zune, Windows Mobile-based phones, Dell Craptops, Office 2007, Vista), and let me as you this:
ARE YOU SERIOUS?
My advice to you is to stop shilling for Microsoft. Go out and do some actual work, and write something in this space that is useful to your readers.
So lame...
It may be just me, but,,,, then again, who knows.
Right Bill and Steve. ;-)
Elder Norm
your iPhone. You have already violated your contract by admission, do you
think that you should not pay a penalty for your obvious action.
As far as the iTunes store goes....wrong again in your assumption(s). iTunes
works with many devices, has AAC and will continue to evolve to meet any
competitive pressure. Its the whole widget that makes iTunes successful,
along with deals with Starbucks and WiFi, while Amazon has not even not
even proven to be a success with their online store.
The Apple software advantage is so far ahead of WMA and now being
imbedded into iPhone and iPods......when do you suppose Microsoft will even
have a Zune runing Windows that can connect to a WiFi store?
Because it is GRASPING GREED and CREEPING CONTROL from a MONOLITHIC MEGA-CORPORATION that doesn't care about YOU!
Apple greedy.... See Microsoft!!
Apple manipulative.....See Microsoft!!
Apple Monolithic mega corp.....See Microsoft!!
Apple does not care about you.....See Microsoft!!
You have described Microsoft so well, I have to assume you know them, inside and out. :-) Tell Bill and Steve Hi, when you see them next. :-)
Elder Norm
15in Powerbook. the logic board gets fried, with no apparent reason, and
it is just too expensive to replace. oh, also my 40Gb iPod got fried. and to top
it, the service where i live (mexico) is appalling. after a brief affair with apple,
i swear i will not give steven jobs one more cent. much to my regret, i will
have to go back to bill, unless i find time to master linux.
I have been in Apple fan for five years, and albeit I am not as dedicated as the lifers I have been disappointed by the way Apple?s been acting since the release of the iphone.
I live in Canada and I hacked my iphone because I like the product. I?ll agree with the hardcore fans that I made the choice to tamper with the phone and if it breaks it?s my fault. I won?t argue that point, because you?re all right.
However, I am the customer.
I don?t appreciate the way Apple?s been acting. I am against the recessed headphone jack, the swift price drop (even though it didn?t affect me) and a few other things?
I am drawn to Apple because they make the best products, but I think their capitalistic approach is too much for me. As this article demonstrates, I am not alone.
Your post says you bought a $600 product and you hate it cause of the headphone post (see small cheap adapter) and store credit.
And if you want to see a real nasty approach, try using Microsoft products. Recently honest Vista users were denied access to their product because Microsoft servers crashed and the "phone home" MS advantage package could not verify the program serial number, so MS assumed that you stole the software and crippled it. Nice people. And this is business as usual for them.
Hey, you are the customer. Very true. If you do not like the product, take it back. I here the Razr is a nice phone. :-)
Really!!!!
"When the iPhone first hit store shelves, Apple was on top of the world. Not only did the company enjoy the biggest product release of the year, its stock price was on the rise, Mac sales were soaring and, for the first time, it looked like Apple might be able to supplant Dell and HP as the proven leader in the hardware business.
But just a few months later, it's amazing how quickly things have changed."
How sheltered a life do you have? Do you some how think that Apple grew and will die with the iPhone?? Have you even seen the sales figures estimates (from real analysis not the hacks looking for clicks.)?
iPhones are selling like hot cakes. So are iPod Touchs, the new nano, not to mention Mac computers. Apple and to a lesser extent, Vista, has writers talking about how great Apple products are and how Vista sucks. PS. Excel 2007 has a built in math error, just discovered. More and more articles are coming out from all kinds of respected magazines, even ones that have spent years putting down Apple.
No, I think we are seeing the start of the final days of Microsoft as a super power. And recently Bill Gates was quoted as saying about Steve Jobs, "Doesn't Jobs get it, he is not a factor anymore." Bill has lost touch with reality. Microsoft just lost the final appeal to a $ 600 million fine in Europe, many companies doing their best to NOT LOAD Vista, Sales disappointing (yes they are big, but they are a long where from where Microsoft planned for them to be).
Sorry Don, Its not Apple that is starting that long spiral down. PS. Leopard is due out in Oct and its going to be a very interesting next 4 months. :-)
iPhone price cut
Whiners were just a loud minority and Apple did the right thing by issuing a
credit. Let's see... 1.2 million sold in Q1?! They'll easily sell 10mil by end of
'08.
Hacked iPhones
Apple's gotta draw the line somewhere and not supporting hacked phones
makes perfect sense. Apple shouldn't need to put forth extra effort to make
sure updates don't brick hacked phones and protecting their exclusive
relationship with carriers is good business. Who going to trust future
relationships if they don't show due diligence? Smart hackers know that
risks come with the territory and will most likely find a workaround to
anything Apple introduces. Your either a fool or cannot read if you blame
Apple for your broken hacked iPhone.
iTunes/Amazon
The new DRM-free Amazon store will probably help Apple more than hurt
them. Apple makes $$ on iPods and not much $$ with iTunes. Amazon
wouldn't be selling $.89 DRM-free tracks if it weren't for Apple sticking to
it's guns. The labels are headed in the direction Apple sent them - DRM free
tracks for less. Apple's iPod usage will surely grow as a result. The real loser
is Microsoft and the WMA format.
"iTunes is in deep trouble"
"iPhone and iTunes--meet an early demise"
"If Apple decides to brick iPhones, no one will be its friend."
Laughable FUD, misguided journalism or both. Apple bashers will have fun
with it though.
Don, as an owner of AAPL, could you continue to prognosticate about them for me?
understanding of what's actually happening.
Is Reisinger's insipid 2nd-grade level of economics understanding and business
analysis really the best CNET can muster nowadays?
Read more here:
http://macdailynews.com/index.php/weblog/comments/15002/
About Apple locking phones. Apple wants to sell you iphones. This first go-'round, they needed a carrier. It's ATT. There is no question that if you could examine the contract between ATT and Apple, you would find that Apple must take affirmative action to block users from using other carriers. It's just too bad that the marriage to ATT has to last so long. Once that ends, so will locked cell phones--for everyone once and for all. Even if you never use an iPhone, you'll thank Apple 5 years from now for ending the locked-in cell phone crap.
DRM-free tunes: Again, Apple wants to sell iPods. They don't make any profit from selling songs on iTunes. The iPod along with the iTunes software is still the best way to manage a song and video collection and use it on an iPod. So why would Apple care if you used your own CDs, ripped a friends CDs, or purchased a DRM-free song on Amazaon. Anyone who's intelligent will put that song into iTunes and use it with their iPod.
If you want to blame someone, blame the music labels. They are done. They can't admit it to themselves and they want to keep trying to invent ways to become powerful again. I look forward to the day when artists record their own stuff and sell directly to distributors like iTunes and Amazon. It's going to happen and I'll be dancing on the graves of the labels when it does.
A blog similar to Don Reisinger's on CNET (link below) was coming sooner or later. Bad reaction to the Apple update (future tense) and the new music store on Amazon will be a possible tipping point.
Hey another player in the digital music department only means better pricing for us right? We should want more services at better rates. I say go for it. And thanks for making a Mac downloader (now do one for the videos you meatheads), now we have more choices.
I'll go Don one further (and I'll get back to his iphone in a minute). I'll bet you Leopard opens to mixed reviews and less than thrilling sales. Macworld 08 will be a dissapointment because Apple rolled out all it's good stuff already. Studios will fight Apple on pricing and ipod sales will plateau.
There, is that enough to keep you going for awhile.
Everything foes in cycles folks. Even Cupertino. Apple will have good times and bad ones, just like everyone else. No one can sustain success forever. Microsoft gets a ton of bad press every year, but I seem to recall they still make a few dollars here and there.
But when I go home tonight and start doing cool stuff on a Mac that's older than my Kindergartener I'll reserve my Apple bashing for when they start consistanly shipping junk that doesn't work and is not the absolute coolest thing on the block.
I am not a mindless fanboy, just a fan. Apple is a company, not your savior. Expect them to act like a company more often and none of their workings should surprise you. Just be thankful that there is one less beige (black) box company out there.
It's easy to write gloom and doom Don. And I'm not going to give you credit for being the first to say it. And by the way, I hope Apple does brick your phone. ;)
Phrases like "It could happen" and "Time will tell" are things we college students like to call 'fluff' - ramblings that don't accomplish anything, instead merely occupying space and leaving the reader to reach a conclusion you simply can't offer.
Good thing you're paid according to page hits (which explains topics like this). If you were judged by the quality of your work, you'd be writing for Highlights magazine by now.
Macs are selling better because they are now Intel based and run windows.
The market has been weighing in on Apple for decades and the answer is always the same...short term unsustainable successes.
It's going to take something really big to lose me. Besides, where I live a lot of
my friends are switching to Mac. It's the "in" thing to do.
- It's all about sustained sales growth
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by murraymck
September 27, 2007 11:24 AM PDT
- The Itune business actually operates at a loss for apple. It exists solely as a vehicle to help sell Ipods, they not only want Amazon to be succesful, they need it to be. DRM was alive and real when they launched the Itunes store and that stance has changed in the last 6 months within the music industry. (Not to mention the fact that the IPOD has thoroughly entrenched itself as the player of choice). We are more likely to see "exclusive" music and content from apple in the future with cross promotions.
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Showing 1 of 2 pages (29 Comments)The apple deal with AT&T was likely extremely profitable on the front end for Apple. Keep in mind that AT&T is the remerging of the baby bells and the Iphone represented a way to launch the rebranding of cingular etal as AT&Ts mobile offering, securing 100s of thousands of new customers. AT&T paid through the nose for the exclusive rights and set the price. The current pricing is likely what was originally intended. Apple got in bed with AT&T for money and free (lots of it)advertising.
What really needs to happen is an Iphone that does everything its supposed to do. At this point its an unwieldy toy for most users.