Rob Enderle, who describes himself as
one of the most influential technology specialists, posted a generally terrible article yesterday on Apple’s biggest risks. You shouldn’t be surprised — Enderle is the same “technology specialist” who, in January 2007, compared the iPhone to the LG Prada and declared the Prada the winner because it is unlocked, “both… have touch screens,” and because its name was “legally acquired.” (Yes, I’m serious. If you’re wondering whether he’s a jackass or just an idiot, he’s both.)
He didn’t understand that the iPhone’s software is the entire point, which is so obvious that any teenager could grasp it without so much as taking their eyes off of their video game. Yet somehow, our dedicated specialist thought all that mattered was that they both had touch screens. A touch screen, however, exists to make a direct connection between the user and the software, making the software the most integral part. But even worse, he didn’t even compare what kind of touch screens they were, nor the screens’ resolution, brightness, or clarity.
That ineptitude, combined with his asshat-esque comment on the legality of the iPhone name, points to a clear conclusion: Enderle knows nothing at all about Apple, and only thinly veils his hatred.
It is through this lens that I read Enderle’s latest article on Apple, where he ostensibly describes their biggest risks.
Enderle is a winner of Gruber’s illustrious jackass of the week award, and has been singled out for Gruber’s own deconstruction more than once, and I think all of those victories are going to his head. It’s almost like he needs to start off any article about Apple by making his Apple-hating credibility clear.
His article is ostensibly on what will threaten Apple’s success in the future the most. Okay, fair enough — but instead of actually starting the freakin’ article, his introduction smugly discusses how Apple fans
blindly [support] everything Apple does, and references a “study” that mostly smears the Mac community.
Congratulations, Enderle, you’ve earned the respect and love of the group you have already courted so strongly — the “IT professionals,” which is usually code for “anti-Apple.” Do you want a ribbon for your achievement?
This [the Mac] is not a keystone product (a keystone product is one where, were it lost, it would take a lot of the related products with it) and it hasn’t carried Apple for some time now. It is large enough so that were it lost Apple would feel a lot of pain, but losing the Mac would not necessarily put any of the other key product lines (iPod/iPhone/Apple TV/iTunes) at risk, as they are actually more prevalent on non-Mac platforms.
Considering the Mac accounts for half of Apple’s revenue, and its sales are growing at more than five times the rest of the market, how in the hell is it not a “keystone product?”
Apple’s real magic is in the Mac. OS X and its integration with Apple’s top-class hardware is a central driver of Apple as a company. People aren’t interested in Apple just because they make iPods. People are interested in Apple because they make computers that are perceived as different and better than the junk they use now. If Apple lost the Mac, it would lose its core essence. Oh, and half of its revenue. Don’t forget that.
The biggest risk to this dominance is the blurring distinctions between the Mac segment and the Windows segment. Initially, because the platform is now surging, this provides significant upside potential, but the larger PC companies are starting to focus on the same value attributes currently driving the Mac.
Oh, really? “Value attributes” might sound nice to “technology specialists” like Enderle, but I wonder if he even knows what the hell that means. The Mac’s primary “value attribute” (to use Enderle’s meaningless MBA-speak) is something that PCs cannot (properly) run — Mac OS X. While the Mac’s build quality, better than any of their competitors, is certainly a reason for buying a Mac, it is secondary.
Regardless, Enderle seems to think that Dell can make their computers look better, and eat in to Apple’s advantage. Add some nice colors, maybe a little metal, and all of the sudden those Inspirons are identical to the Macbook Pro, right, Rob?
…No. Let’s ignore OS X for a second. Apple’s hardware designs are fundamentally better than their competitors even on the most basic level. Apple’s notebooks are minimalist, dedicated to their function and nothing more. They have only the Apple logo on the lid, and nothing else. A typical PC, however, when opened has Windows sticker, Intel or AMD sticker, a feature-sheet, and miscellaneous other advertisements plastered across the wrist rest area. For PC makers, the notebook’s hardware is just more room for advertisements. For Apple, its hardware is a single unit with integrity.
There is a different mentality altogether, and Enderle’s comment that PC makers are encroaching on what differentiates Apple from the competition embodies this perfectly. Enderle, and PC makers, believe that a PC is merely a commodity, bought and sold primarily on price and some superficial consideration of how it looks, and thus it can be ad-hoc altered in any way desired, like some kind of frankenstein, to appeal to whatever customers they want.
Apple doesn’t operate by that mentality — they understand that a computer’s design is inherently tied to its function. So no, Enderle, they are not encroaching on the Mac’s key “value attributes,” because they can’t. It’s unfortunate you will never understand that.
The stupidity continues. On iTunes Enderle comments,
This product [iTunes] is at significant risk largely resulting from an industry move to non-DRM music.
Currently most iTunes customers are locked into the service by the music they have purchased through it. Removing the DRM will increasingly break that lock. But this won’t happen overnight unless subscription services take off, which has suddenly become very likely. Amazon’s movie into digital music is creating a significant risk to iTunes. They have recently surged to No. 2, as they are dominant in their online retail segment since they are the largest and most powerful on-line retailer in the U.S.
Let’s deconstruct this asshatedness piece by piece.
First, Enderle argues that the iPod and iPhone are dependent on iTMS, and would suffer if iTMS didn’t exist. While the iTMS is an important part of Apple’s strategy, it isn’t the most important — the hardware itself is. Apple makes very little, if anything, on each song sold on the iTMS. If iTMS was central to Apple’s success, they wouldn’t be giving 70% of their revenues on the iTMS to the labels. Indeed, as Jobs pointed out in February 2007, for every iPod sold, only 22 songs have been sold on the iTMS. If that’s Apple’s business, they’re a bunch of idiots.
Well, actually, just Enderle is. Apple’s business, as those numbers make clear, is selling hardware. Keep this in mind.
Second, our Specialist claims that iTunes (I assume he means the iTunes Music Store) is under threat from an “industry movement to non-DRM music.” Let’s table whether the music industry is “moving” toward non-DRM for a second (can you really say that the record labels are moving toward opening their music?). Enderle assumes that Apple’s iTMS strategy depends upon DRM — locking their users in — to using their store.
If Apple’s strategy was dependent on iTMS sales, this might make sense. But it simply isn’t. Apple is interested in selling iPods, iPhones, and Macs, not in squeezing every last cent out of their iTMS users. That’s why Jobs was willing to call for record labels to open their music up on iTunes — locking their users in simply doesn’t fit their strategy.
Enderle then makes it clear he has no idea what he is writing about if it wasn’t already clear by claiming that DRM will not be removed unless subscription-based music services succeed.
Uhm, Enderle, do you even realize what subscription-based music is? The user pays a monthly fee to access music, and usually can only use it on a select number of devices that work with its DRM scheme. The second that user stops paying the monthly dues, however, their access to the music ends. In other words, this is as DRM as it gets. (There is, as Enderle points out, discussion in creating a subscription-based, but relatively unlimited, music service. However, access to the music after the subscription ends is still up in the air even in these liberal rental services.)