Ted Landau's User Friendly View - Who'd Have Thunk It?

by Ted Landau
October 21st, 2005

Apple has completed its fall lineup of new products and is locked-and-loaded for the upcoming holiday season. The prime attraction is the video iPod. Note that technically it's still called just an iPod, or an iPod with video. It's not called "iPod video" - as in "iPod photo."

Why the hesitancy? Partly, I think it is that Apple is still struggling with how much it wants the music-based iPod to be seen as a video machine. Remember, Steve Jobs is well known for stating that video on an iPod does not make sense because you can't listen to video in the background, like you can with music. But mostly I think it is the opposite.

Apple is just getting its feet wet with video on this iPod. In the not-too-distant future, I am confident that we'll be seeing a much more beefed up truly video iPod. So, for the moment, Apple has decided not to make too big a deal of all this. Still to come will be larger screens, full-length movies (downloaded from iTunes), and a bunch of surprise features designed to blow the competition out of the water.

Back in the present, I predict that the current "iPod with video" will be a smashing success. I especially like the tie-in to television shows for purchase from iTunes. Just think...whenever you miss last night's episode of your favorite show, or would rather watch it on-the-go without commercials, you can now easily do so. Yes, you could save the show with a VCR, TiVo or even with EyeTV on a Mac. But with iTunes, you don't have to decide in advance whether or not to record something. You can make your decision at the exact moment you want to see the show. It's a convenience that will sell, especially at $1.99 per episode.

Looking backward a bit, given all of Apple's recent triumphs, it's easy to forget how different the situation was just a few years ago. To help you recall, let's go back ten years in our time machine...to 1995. It is a dark time for the Republic of Apple. The Empire has just released Windows 95. And while Windows 95 has its faults, it is clearly the first iteration of Windows that succeeds in copying enough of the Mac OS that PC users can say, without feeling completely embarrassed, that there is no longer an advantage to getting a Mac over a PC.

It was a dispiriting time for Mac users. I found myself having to resort to metaphysical defenses of the Mac, saying things like: "You can't see the advantage of a Mac just by looking at specs or playing with a PC and a Mac for a few minutes. It's only when you use each one for a good while, that the true advantage of the Mac becomes clear." Unfortunately, people were just not buying it. Literally.

Sales of Macs plummeted. Market share declined. Schools were switching to PCs at a dizzying rate. Apple was spilling red ink like a levee had busted in its accounting department. Magazines were running covers that proclaimed "The death of an American icon." People were seriously talking about Apple closing up shop (despite the fact that the company still had enough cash reserves to form an independent country).

The situation wasn't helped by Apple's unexciting and confusing beige-box product line or its inability to get its next major OS upgrade (Mac OS 8, Copland) out the door.

Yes. Times were indeed dark.

OK. Fast forward to the present. With a show of hands, how many of you would have predicted even one of the following would have occurred over this span of time:

• Apple gives up on Copland and decides to peg its survival to purchasing an entirely new OS. After a battle between BeOS and NeXT, Apple decides on the latter. And who'd have thunk that the best thing about that decision would be the return of Steve Jobs to Apple? And even if you were inclined to think that, would you still be so sure when, just about the first thing Steve did was to abort the blossoming Mac clone business?

• Apple's first major product under Jobs' new leadership is the iMac, a product that proves so successful that it is still the company's flagship computer.

• Disgusted with how retail stores treat Apple products, Apple decides to open its own line of stores. Analysts predict doom, noting the failure of such ventures as Gateway stores. Surprise! Apple Stores have become one of the company's best marketing tools. New stores continue to open and, as far as I can recall, not one has ever closed. Who'd have thunk it?

• After years of touting that the main advantage of the Mac OS is its friendly user interface, the core of Apple's new Mac OS X turns out to be the antithesis of "user-friendly": Unix. Yet, somehow Apple succeeds in the delicate balancing act of maintaining ease of use for the casual user - via the Aqua interface - while providing full access to the Unix command line for those who want it. Unix users call it the best-ever implementation of Unix on a desktop machine. Most every one else just calls it the best OS available anywhere.

• With Windows XP suffering from an onslaught of security problems, Microsoft promises that the solution will be Vista (originally code-named Longhorn). But Vista may not see the light of day until 2007, years behind schedule. A significant number of disgruntled PC users start to seriously consider switching to the Mac. The success of the iPod brings yet more new Mac users. I have heard that Apple's U.S. market share is now back close to 5%! Microsoft's hold on the computer market, while still a strangle-hold that would make a WWF wrestler proud, has never appeared weaker than it is today.

• Beset by financial problems due to poor sales, Sony seeks to re-invent itself. A top executive points to Apple as a company with a strategy that Sony should emulate; that is, focus on a smaller number of products that all excel in their category. Sony wishing it could be more like Apple? Who'd have ever thunk it?

• Apple's new iMac, introduced this month, is all about multimedia and entertainment (with the spotlight on the built-in iSight camera and the Front Row interface). Remember when the killer apps for computers were spreadsheets and word processors? Remember when Apple almost tried to cover up that you could play games on its computers, fearing that the public would not take its machines seriously? Forget all that. All Apple wants to talk about now is how much fun you can have with your iMac. Who'd have thunk it?

• Apple's iPod and iTunes each command something like a 75% share of their markets. Apple dominating a significant market with a percentage that approaches near-monopoly levels? Who'd have thunk it?

• Apple's stock splits and still pushes to record highs. As I recall, a few years ago, before the last split, Apple stock was around 12. Now it is edged past 50. That's around an 8 fold increase! As a bonus, the company's just announced profits are at record levels. Who'd have thunk it?

Over these past ten years, Apple has morphed from a struggling computer company into a multimedia giant. Who'd have thunk it indeed? Not me. Look, if ten years ago, you would have predicted all of this would come to pass, send me your phone number. I want to put you in charge of all of my financial investments.

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Postscript: At the risk of stoking fires that have all but burned out, I posted a reply to reader comments regarding a previous article (Apple's $440 Piece of Plastic). For those of you who might be interested, you can find it at (what is currently) the very end of the reader comments section.