The Great Apple Turnaround?
It's a win-win for both companies. HP gets a great platform to take off its entry in digital music and Apple's iPod and iTunes suddenly reach 120,000 stores worldwide that sell HP products. Apple has already sold over 2 million iPods on its own - over a third of them only in the last three months. Imagine what this partnership can do.
Apple is a small fish in the PC market, relatively speaking, primarily because it never competed with companies mass producing PCs for the business world. Fighting the onslaught of new, cheaper digital players from such biggies like Dell, MS, Sony and others would have been a challenge. Now, with this new marriage it's poised to hold on and even grow the amazing over 50% market share [by revenue] for digital music players it has achieved in such short duration.
It seems that Apple gauged the big opportunity here right from the start. In an interview to the Rolling Stone magazine, Steve Jobs described the struggle they went through to convince the music companies for selling music online through their iTunes store. Then, they made iPod work with both Mac and Windows. iTunes followed the same path six months after its launch. And now they're focussing agressively on growth with new models and great partnerships. The iPod is already becoming much more than a music player. You can now listen to audio books, radio and even the web.
Apple made a fateful decision in 1987 against licensing the Mac OS to other companies. Well, they seemed to have learnt from the mistake alright. The licensing pact with HP is a departure from their long held strategy. Apple does with music what it should have done with Mac. If they don't screw up on the way and build up on this success with more such cash cows in the next two years, they should be on their way to becoming one of the big names in the industry.
We might have just witnessed a turnaround event in Apple's history.
Notes and links to recent stories on Apple
Two excellent interviews of Steve Jobs. NYT on the iPod success story and the Rolling Stone magazine on the strategy behind iPod.
A fascinating account of how someone discovers that iPod has irreplaceable batteries, posts a movie about it on the internet and within days Apple begins to accept replacements.
The mini-iPod pricing is all wrong, says Business week. According to them, it's "far less capacity in a slightly smaller device for nearly the same cost." But shouldn't price cuts wait for competition? Why reduce now when there's none.
News.com stories "HP, Apple harmonize on iPod" - talks about the pact and "Apple drinks its own juice" provides hints on the changing face of Apple - a rare look inside Apple HQ, see the hardware and software that powers it.
And this MIT economist claims Job's decision not to license the Mac OS was the "biggest business blunder in the past half-century." The solution he prescribes however, is ridiculous. A Chief Knowledge Officer that will magically take all the right decisions by being, hold your breadth "unbiased". Ha.