Yet another masterful Emmy winning performance by Steve Jobs, which met most if not all the expectations of the Mac faithful. GigaOM readers were once again proven right, and Apple launched a movie download service, albeit a watered down version than what most had expected or imagined. (I was wrong, in betting that new widescreen video iPod, which I guess will be unveiled in the next Macworld Show in San Francisco.)
But more than the new products, what was amazing is the increasing similarity in Bill Gates 1.0 and Steve Jobs 2.0. (I speak metaphorically – Bill Gates represents his awesome money machine, Microsoft, and Steve Jobs is the new money machine.) Before the Macheads skin me alive, and Windows zealots call me biased, please let me say, it is a compliment of sorts for the two titans of computing.
So why is Steve Jobs is Bill Gates 2.0?
The anti-DRM crusaders see Steve Jobs (because of iTunes) as the antichrist, just like anti-monopolist people saw Bill “Microsoft” Gates as devil incarnate. (Okay, that’s just a warm up pitch.)
Bill Gates learned early on that controlling the platform is the key to future profits. Steve Jobs 2.0 gets that very well. The iTunes and iPod control of the digital media/convergence markets is quit akin to the Windows domination of the PC business. Microsoft knew that the profits were in selling software an applications and not the hardware, and they let everyone else duke it out in the PC market.
The digital media reality is quite the opposite.
Apple knows that after you are done giving out Hollywood/Music industry its cut, pay for infrastructure and distribution, you are left with little in terms of margins. However, you can make a lot of money on iPods, which is one of the main reasons why Jobs is keeping a tight control over the devices. Let me elaborate – when the PC revolution was in full swing, applications such as Microsoft Office and Quicken sold the hardware, and helped establish the platform, Windows.
(We Mac users remember the days when our productivity software cried for help, at a time when there was a developers’ exodus!) In the post-PC, device world, content is what sells the hardware, at least for Apple. More music, more movies, more television means iPod becomes da platform. This photo from Engadget says it best.
The iTV streaming box announcement to me was a Gatesian moment. The device is still in “beta” and is not going to be available for another few months, perhaps longer. Add to this the harsh truth that Steve could only get Disney (like they have a choice) to commit to the iTunes Movie Store; what you see is a Microsoft type strategy of chilling the market with a yet unfinished product, and get everyone scared shitless. The Barons of Redmond used to do it so well, before their empire started resembling the Roman conquests.
And if you wanted more Gates 2.0 comparisons, well the man wore a shirt, a red one on top of that. How un-black turtleneck is that?
Photos courtesy of Engadget/AOL
iTunes remains, by far, the tightest client (vs. Yahoo, Rhapsody, Napster and WMP/Urge).
I think Jobs really mis-played this one by going purchase-only. Movies are very different from music. Most people watch a movie once. The video quality is inferior to DVD and you don’t get any DVD extras. Apple will need to offer rentals and/or Netflix-style subscriptions for this to be a hit. However, as long as the competition remains Windows-only, they have no chance either.
The iTV announcement should not be under-estimated. Granted it’s essentially Video AirPort Express, it signals a strong move into the living/family room. If the iPhone rumors are true, 2007 is going to be another interesting product year for Apple.
The streaming video playback of the event I watched showed him wearing a black shirt, not a red one.
Steve Jobs is actually Bill Gates 1.0, except Apple management forced him out because they thought he was wrong.
Who’s wrong now, Mr. Sculley? Did you make a good choice back then?
He was forced out long before he lost the first round to Bill Gates.
Disagree? Even with that gigantic blow, he’s back and gaining on Bill, and his mid 1980’s platform (NeXT) is the platform that is powering Apple today.
Also, don’t forget that when working with the movie and music moguls (MMM’s?), there’s only going to be so much ability to immediately get what Apple wants. It’s going to take time.
And yes, Apple is in business for profit, not for altruistic reasons. That shouldn’t surprise anyone.
I have to agree. It’s all in the slide, isn’t it? “Apple is in your pocket.” (with a siphon!)
Remember the old Microsoft mission, “a computer on every desk.” Apple’s new zeal to conquer rooms, pockets, vehicles, armbands, and more leaves that far in the dust.
I left out “shoes” in my list of opportunities for Apple products.
“So why is Steve Jobs is Bill Gates 2.0?”
because he is taking a page from bill’s strategy book and applying it to a much larger market opportunity.
Emmy performance? a refreshed MP3 player, a 640×480 movie for $14.99, and a $300 wireless device next year? OMG! If that is exciting to a person then honestly I don’t know what to say.
Apple is trying a digital media dominance strategy that makes it the new age sony. Interestingly the hardware itself is made rather commoditized by samsung/HonHai etc. with apple adding and taking all the margins of the value-add.
However the media download itself while not giving margins will do so eventually. The margins in the iTunes music store are blocked by credit card transaction fees (think about fees to authorize a 1 dollar transaction). The same does not apply to a purchase of a 10 dollar movie.
The question is will steve allow other companies to allow downloads onto the ipod. Doing so is in his own interest. iTunes is still very price competitive and is under no huge threat by say unbox. iTunes also wins over other download services in sheer cool. Let the people who want choice have it.
I think all the media hype has completely obscured the real presentation which is “Steve Jobs is not sick”.
The rest of it was covering fire. And the media and everyone else seem to have bought it hook line and sinker.
It is far more valuable to Apple to squelch the perception that “maybe Steve is not well” than to present a half-baked lo-res movie download service at full DVD price. The subliminal product placement – a healthy Steve was the real thing being sold.
And they pulled it off masterfully. No one is talking about how he looked this time around, are they.
Showtime, indeed!
@Michael Markman: with a siphon indeed. They’re expanding into a lot of markets. Good moves I think.
Yuvamani got it right. Apple isn’t following Microsoft’s playbook, they’re following Sony’s.
And that makes sense. Apple doesn’t sell PC’s, they sell consumer electronics (that happen to do a lot of what PC’s do). But it’s a fundamentally different way of looking at it.
I have to disagree with the rest of his comment though. There’s nothing here that’s going to usurp Netflix or DVD’s. The thing about these download services is there’s still no compelling reason to use them – other ways to get movies remain far cheaper and more convenient.
Is Steve Jobs is Bill Gates 2.0?
No.
del.comment & amused… thanks for the catch … sorry about that.
elmomo, emmy performance for acting so well without announcing anything major… or at least making us believe that it was important. so i am in agreement with you… my sarcasm didn’t work. damn! must try harder.
I love your sarcasm, Om. I’m just concerned about the culture of people putting down Apple lately for whatever they do (or don’t) announce or release.
Just last week, the blogosphere was aflutter with news that the iPod was going down and that Apple was hitting its top. Oh, let’s not forget “Apple doesn’t talk enough about their plans” banter.
C’mon guys. I’m all for criticism, but this is plain silly.
Aaron,
excellent point. i think by now it is end game for the download music business. Apple has become the platform, it has recognized the shortcomings of the model and learnt how to thrive with it. the numbers (both in $ & cents and sales of actual songs and devices) just speak for themselves.
i call it a gatesian move because they basically showed their cards, and said, lets play truth or dare. i think this is going to be a very interesting and long fourth innings.
the first was launch of mp3 players, which was Rio’s game, second came hard disk players and some indie music services along with napster “take whatever you want model.” third inning was iPod and iTunes. now lets see how it shakes out in the future.
apple still makes devices that people want, though after my current macbook pro experience, i am going to wait and be smarter about how i spend my dollars with them. i still think the video ipod (the new one) is not a good enough reason for me to upgrade.
“because he is taking a page from bill’s strategy book and applying it to a much larger market opportunity.”
Thats gotta be one of the most ignorant statements I’ve ever heard. Apple doesn’t have crap for market share on Microsoft, company wise Microsoft dominates them on profit, revenue, assets, everything. Apple fanboys are an ignorant bunch I’ll give you that.
Out of curiosity, why does everyone continue to bash the resolution of the new movie download service (“a 640×480 movie for $14.99”, “half-baked lo-res”)?
Last time I checked, standard DVD (MPEG-2) resolution is 720×480, so the resolution of Apple’s download service is in fact, very comparable to a DVD.
Perhaps next to a brand new Blu-Ray or HD-DVD disc, the Apple downloads may look less appealing, but the loss of 80 horizontal pixels doesn’t bother me that much.
Honestly, how many times have you looked at the DVD extras? I rarely do.
That being said, I am going to buy the Incredibles, plus preorder Cars. I wish that iTV was out now, but seeing as it probably uses wireless N, Apple is waiting till it gets a little closer to being standardized.
Me… actually in iPod the market share for Apple is as dominant as the windows on the desktop. perhaps that point did not come through in what i wrote.
on the financial metrics, it be nice to compare the two companies.
for fiscal 2006, microsoft had sales of $44 billion + and net income of $12.6 billion.
Apple in fiscal year ending sept 24, 2005, had sales of $13 billion and net profit of about $1.3 billion. In the three quarters since then, their sales are $15 billion + and net profit is is to the tune of $1.5 billion +.
So $20 billion in sales and about $2 billion for fiscal 2006 is not bad. clearly as not high as Microsoft, but then Microsoft doesn’t sell hardware.
Microsoft has about $50 billion in cash, apple has $11 billion. For a company with less than 4% market share Apple seems to be doing just fine. It is doing better in the “digital music” business, and their approach is remarkably similar to Microsoft. in fact it is a compliment to the business acumen of MSFT.
but you are right in bringing up those very valid points. thanks
@”Me”
I think you’re misinterpreting was Om said.
“because he is taking a page from bill’s strategy book and applying it to a much larger market opportunity.”
That doesn’t have anything to do with market share, revenue, profits or assets.
What he’s saying is that the opportunity in this market is significantly larger than what Microsoft had in the early days of the PC revolution.
What Om said doesn’t even pit Apple and Microsoft against each other. Just saying that Apple’s strategy is similar to early Microsoft’s.
You don’t think videos will be sold? You’ve never felt like watching a movie at midnight when everything is closed?
Instant Gratification is the name of the game.
$2.00 for gas, $4.00 for rental, and an hour of time. It’s probably worth the extra $4.00 so you can watch it and get back to the blogs.
What was your bad experience with MacBook Pro that you alluded to?
steve actually wore a black button-down shirt. still weird, but not as weird as the article said with a red shirt! 🙂
I think you’ll find Steve is Bill Gates v1. He got there first.
What I’m most surprised about is the lack of TV tuner in the iTV, surely if you’re going to plug this into your TV you would want to be able to record from it? So does the absence of this obvious feature make Steve a genius or an idiot? Track record suggests genius surely? So what does he know that the rest of us don’t, he seems to be betting the farm on video on demand, but everyone else that has tried that has failed. Odd choice…
Maybe Steve is really Steve 2.0. People act like he’s never announced unreleased products. Didn’t he just demo Leopard? How about the iMac, first announced in early May ’98 and not available for purchase until mid-August?
OK, the real point is that the iTV announcement appears to be aimed at getting people to wait for iTV rather than investing in alternative technologies (like what?). This is not uniquely Gatesian.
I believe the reason he previewed iTV at this time is so that people wouldn’t be so disappointed that Apple only released refreshed iPods and a new movies service.
Also, as Steve said in the keynote, so that people may have an idea of where Apple is headed and to complete “the story.”
I have to say that you really missed the point. People were reporting the iTV on rumour sites. This was quite recent and could have taken the wind out of Steve’s sales if he left it until his next Keynote. So rather than do that he decided to announce it now.
Apple can go into a market and take it even when there are many players on the field (look at the iPod). So I doubt he was worried about anyone getting there first.
Also, ignore the ignorant “me”. He didn’t have anything but FUD to spout about. If you want to compare Apple with MSFT then look at the last 4 years share growth . Apple’s looks like going up a Ski slope. MSFT is just a wiggly line that’s virtually horizontal. Even dipping slightly.
As an AAPL shareholder he could be Shirley McClain 2.0. I don’t give a rip. He’s masterful at working the crowd, unveiling things with precise control thereby defining markets and has made me a ton of money.
Will I buy the product that does me right like that? Oh you bet I will. EVERY time.
DRM doesn’t bother me one bit, btw.
I love how people are pooh-poohing the new iPod lineup as “a refreshed mp3 player”, the new movie service as “a 640×480 movie for $14.99”, and iTunes 7 as “an unneeded upgrade.”
It bears remembering that when the first iPod was announced, the insider reaction of most people was, “Ho hum. An mp3 player. Wow.” Several years later, iPod has become a platform.
The point is that it really doesn’t matter what we (bloggers, insiders, tech newsies, etc.) think because we’re not the ones being sold to here. This announcement went out to three groups:
All the 18-24-year-olds who just got to campus with money to burn ($250 for an iPod that cost $400 a few years ago! WHOA!).
Parents planning their holiday purchases.
Translation: everyday consumers.
Here’s where Steve is very much adopting the Bill Gates strategy: pre-announcing. This is not the battle for the computer desktop OS. That’s so twentieth century. This is the battle for the media platform. In audio, Apple is winning hands-down. But it’s time to move to video.
That’s why we got such a long, loving look at the vaporous iTV device. Up until yesterday Steve always kept Apple hardware very close to the vest. Apple has been ruthless about keeping new HW under wraps until announcement day. So, why the flip on the iTV device? Why make it so visible so early?
Here’s why: because it’s a critical final link in the media platform strategy. Just as Apple provides advance looks at Mac OS versions to get the developers on board, they need to reveal the media platform to get the studios on board.
The movie download market is still young and tiny, but already crowded. Studios are placing their bets. So far, only Disney has bet on Apple. Apple needs to bring in the other majors.
It’s the ol’ chicken ‘n’ egg game. Studios need to place bets–they can bet on multiple platforms, but they’ll only bet where they believe they’ll find an audience.
Only the rich of us have the budget to support multiple DRM platforms all the way from download to the big TV in the living room. Do I go Media Center to Xbox360? or iTunes to iTV?
This Christmas, only one of those choices will be on the market. So, Steve is doing the classic vapor play. I see the keynote and think, “Gee, I’m not a hard core gamer… and that Apple product will work with my PC. And Media Center is overkill, because I already have a DVR in the living room… Maybe I’ll wait for Apple.”
Yesterday, Steve had two audiences–he’s pimping the iPod line to the consumer, but he’s also addressing the studios and enticing the with a buzz-worthy, play-everywhere platform: Car, living room, Den, pocket. (Prediction: By CES, if not sooner, we’ll see iPod connectivity to in-car video playback).
Om is right. But his headline is inverted. It should have been “Is Steve Jobs 2.0 Bill Gates?”
I want Apple in my cell phone.
I want a 16×9 video iPod.
I want Apple in a CableCard DVR.
Kudos all round for an interesting and thought provoking thread. My five cents: Apple swept all before it in MP3 players because of their connected focuses on a quality end user experience and a design aesthetic. (By which I mean they had an aesthetic and did not produce horrendous devices that look crap too.) Everyone is competing to get content into your living room using the net and Apple’s opportunity is to put a device in there that people are prepared to live with, find easy to use and is attractively designed. (The Microsoft Media Centre is one for hiding behind the pot plant.) Apple is not going to dominat this market as there are too many established players and no-one seems to want convergent devices; but there are some markets you cannot stay out of, and an eventual reasonable market share is worth pitching for now. The iTV will not sweep all before it, but, as Om Malik says, it will keep selling iPods as, if you have the content, you might as well have ‘content to go’ as well as content streamed to your TV.
This is the real reason why Steve Jobs will never be the next Bill Gates.
Ok, I see way too often people complain that it costs so much (digital downloads), but perhaps it’s time someone mention that you are paying for a convienence. A Huge one at that, while I don’t like paying more for less then anyone else. When was the last time you bought a 20 ounce pop(soda)(cola) pre frigged and ready to drink for the same price as what you could buy a two liter. seriously.
Well, there is probably a lot of money recouped from the physical world:
– no packaging cost (DVD + box)
– no retailer cost (shipping, inventory, renting the store, salesman pay, infrastructure such as utility bill or ERP system, retailer marketing, etc…)
– no retailer profit cut (best buy, circuit city, etc… have to make some money, they don’t sell it at cost, at least not always)
– etc…
Granted, you need to pay for the server and the bandwidth for the download, but does that really offset all those costs that are not present for online stores?
Steve Jobs great performance at the Showtime product release further reinforces that the brand of a major company can be as simple and as powerful as a single human relationship. To those of us who regularly tune into Mr. Jobs’ keynote product introductions, the impression we get is that Steve is making great stuff for us and every three months he shows us how to use it. It’s the most personal relationship with a major brand I’ve ever experienced. The impression you get, if you follow these release videos is that Apple is an extension of one man’s vision to bring us great software and hardware. In between ‘shows’, Steve drives the development of great stuff, then he releases it to us and his hour long episodes take the place of any ‘getting started’ video that anyone would need to find on their own.
As the spokesman/personification/and driving force that is the Apple brand, Steve Jobs is actually un-matched among CEO’s. This is an arena where all other CEO’s and former CEOs – Bill Gates and Jack Welch included – are really understudies.
There’s a cute spoof of the Ipod Shuffle news at:
AmericanInventorSpot.com
So make up your mind. Are you comparing Jobs 1.0 to Gates 2.0, or is it Jobs 2.0 to Gates 1.0? Between the title and the article itself, there are more waffles than at, well, Waffle House.
In my persnal opnion i would rather have the more ellegant style of the apple products in my life. Ya have to appricate beauty
In my persnal opnion i would rather have the more ellegant style of the apple products in my life. Ya have to appricate beauty. bill gates jus concentrates on how the computer runs. Steve Jobs, although its a little more expensive, has a product that works well an its a lot easier on the.
Nerdiest… Title… EVER!
tell me the age of him? right now not the age of him when he envented the apple computer!!!!!!!!!!!!!!!!!!!!!
Well, let me put it this way
Both (Jobs & Gates) are in for BUISNESS, i mean, i own a MBP,i own a crappy sony VAIO, and let me put it this way, Adobe products work better on macs than on pc’s, and microsoft products on mac work OK in mac and way better in pc. Microsoft in my historical opinion does not have the privilege for good credit, let me put it this way, and trust me, it will hurt: Microsoft stole from a lot of companys, apple, MOSAIC (which made the actuall “windows” looking interface) etc etc. However, they rock on…ummm spreadsheets. I am not a mac Zealot, i stick to the facts, FACT- windows evolved faster than macintosh did, however apple’s secret weapon (bringing back steve ) worked on this way, microsoft has not inovated in over 10 years, something that mac did in 1999, i mean COME ON!! if you really know about what’s in the hood of your GUI you can see windows is old and crappy, MS DOS is still under the hood, BIOS for hardware,Registry kernels, even vista has this. mac os x is basically a GUI over UNIX, that is probably the most stable source u can get, it has EFI for harware AND HAS NO REGISTRY KERNELS. I am a system programer, and i will tell you a tip…in my opinion its not that they are too few macs and that’s way there is a lack of virus, its simply that if i would want to make a osX virus it would take me AGES, and with windows…minutes, maybe less. i will take word if you say Linux is better than Mac os x, if it was standarized it be my OS of choice, unfortunately that is not going to happen. However i have seen 60 or 70% more macs than before, that means more market is growing for mac, specially because of the vista issue, which is SHIT (simply by this, i CAN’T load more than 2gb RAM, and only the os takes 800 mb!!! WTF!!! 64 bit macs load any as long as the hardware exists )so…is steve jobs a bill gates 2.0, i dont think so, IT companys are stupid (hence IBM!) and dont learn to evolve, however this small company called apple evolves when its needed, and did not get stuck in the 80’s with kernel registry, bios and more leaks than a house after a huracane passed through safetywise. I use windows for excel, i dont get why mac version has always been rather…weird, and different. and will windows rock the world for a long time? of course, simplly cus it can run on 100 buck harware, and macs only run on high end harware supplied y them, i agree to this simply because they last longer than any other, they have higher quality standard, and design.