Robert X Cringley on iTunes and the direction of Apple.

[alfredo]

http://www.pbs.org/cringely/pulpit/pulpit20050505.html


What Steve hates is hardware competition, but iPod clones will only happen at a point when Apple has decided to get out of the business of making its own iPods. Think about it. If Apple licensed iPod technology, the company would receive from its OEMs a per-CPU license fee of anywhere from $5 to $25 depending on how smooth Steve is as a salesman and how desperate the would-be OEMs are for that license. As Apple's profit drops on each iPod it makes, eventually the per-CPU figure will approach what Apple might receive from licensees. At that moment it makes more sense for Apple to license clones than it does to make more iPods. Licensing clones AT THE RIGHT TIME would lead to huge clone sales, effectively killing any significant iTunes competitor. And in the long run, iTunes is where the money is.

[politicat]

1. That's what they said about the Mac-clones in the late 80s, early 90s.

They damaged Apple far more than they helped. Thus, the licensing concept went away.

iTunes/iPod may be profitable now, but the point behind them is that they are the foot in the door for people who don't especially like windows but aren't motivated enough to make the switch. Once exposed to iPod/iTunes, these people are more likely to make a switch when the next computer needs to be bought. Licensing the product would destroy the revenue stream.

[alfredo]

2. You are talking about the halo effect.

Since Monday's announcement, everything seems to be falling into place.