2003 Apple fail prediction

Rob Glaser Soothsayer
Rob Glaser Soothsayer

About a week later Jobs played host to one of the “launch” events for which the company is notorious, announcing the availability of iTunes and access to the company’s music store for Windows users. (In what seemed an odd crack in Apple’s usually seamless aura maintenance, he did his demo on what was clearly a Dell computer.) The announcement included a deal with AOL and a huge promotion with Pepsi. The message was obvious: Apple is aiming squarely at the mainstream.

This sounded like a sea change. But while you can run iTunes on Windows and hook it up to an iPod, that iPod does not play songs in the formats used by any other seller of digital music, like Napster or Rhapsody. Nor will music bought through Apple’s store play on any rival device. (The iPod does, of course, work easily with the MP3 format that's common on free file-swapping services, like KaZaA, that the music industry wants to shut down but that are still much more popular than anything requiring money.) This means Apple is, again, competing against a huge number of players across multiple business segments, who by and large will support one another's products and services. In light of this, says one of those competitors, Rob Glaser, founder and C.E.O. of RealNetworks, “It’s absolutely clear now why five years from now, Apple will have 3 to 5 percent of the player market.”

Glaser says he admires Apple and likes Jobs, but contends that this is simply the latest instance of the company's tendency, once again, to sacrifice commercial logic in the name of “ideology.” Not that Apple can't maintain a business by catering to the high end and operating in a closed world. But maintaining market leadership, while easy when the field of competitors is small, will become impossible as rivals flood the market with their own innovations and an agnostic attitude about what works with what. “The history of the world,” he says, “is that hybridization yields better results.” With Dell and others aiming a big push at the Christmas season, it’s even possible that Apple’s market share has peaked.

via The Guts of a New Machine – The New York Times.

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