Apple and the future of music

by Mathew on January 10, 2006

Here’s a column I’m working on for globeandmail.com:

Once an also-ran in the computer and personal electronics game, Apple Computer is now one of the superstars in that universe, thanks to the magic combination of a sexy and user-friendly music player — the iPod — and a profit-spinning online store called iTunes. The company’s handhelds have more than 80 per cent of the market for digital music players, and Apple’s financial performance has also been supernova-like: in the fourth quarter, the company’s profit more than quadrupled, and it had sales for the year of $14-billion (U.S.).

The market is looking for even better things in the future — all eyes are trained on Macworld this week, where Apple CEO Steve Jobs is expected to announce a number of new products. Among other things, the rumour mills have been churning out talk about an Apple Mini-style PVR, or personal video recorder, or even a kind of digital-media hub for the living room. Some have even speculated that Apple could launch a high-definition TV with a built-in computer.

Along more prosaic lines, the company is expected to announce Intel-powered laptops, an upgrade to the iPod Shuffle (perhaps adding a screen) and a new video player. Some or all of these products might — and no doubt will — find a ready market. But could Apple be sowing the seeds of its own failure, by pinning its success on a proprietary product, much as it did in the past with the Macintosh?

That’s the controversial argument being made by Clayton Christensen, the author of a well-received book called The Innovator’s Dilemma. Mr. Christensen told BusinessWeek magazine recently that he’s afraid Apple might be making some of the same mistakes it did with the Mac, by not opening up its products and software. Apple fans will no doubt scoff — after all, this isn’t the Mac we’re talking about, but a product with 80-per-cent market share. Still, it’s an argument worth considering.

Please read the rest of this column at globeandmail.com

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