Category Archives: Digital Home & Personal Tech

Apple’s recent strong earnings announcement (see New York Times coverage), in the midst of a giant recession, one where Microsoft reported declining revenue for the first time in its history as a public company and where declining technology sales are expected by analysts, prompted me to reflect on some of the ways in which Apple has defied the conventional wisdom with the strategies it has pursued and the results it has achieved.

Here are a few examples.

Can you think of other examples where Apple flies in the face of the CW?

Exciting news. The company says video is the bandwidth driver for service providers, and that IPTV is the future, a future of TV as we can barely imagine it today–more personalized, more flexible, more on-demand.

Company executives emphasize the large number of customers they have in common. This is often considered weakness in the strategic logic of such an aquisition, because it theoretically limits cross selling opportunities and may embolden large customers to insist on volume discounts.

But Cisco’s vision appears to be to create video solutions that are qualitatively superior to those that can be cobbled together from other component providers, ones that ought to excite consumer interest and should lead to a 22% CAGR for service-provider video revenues of 22% through 2009.

Mr. Parr notes:

Apple’s new iPod is not so much a video iPod, as it is an iPod that happens to play video. They’ve added a bigger screen and 50% more storage, and taken away a third of the size from their base iPod, making it an extremely attractive upgrade to a well-loved product.

Not many people are going to buy one of these to play videos, but plenty of people will buy them. In other words, video adds no value to the new iPod.

But consider the value to content owners and advertisers of an installed base of milions of Video-ready players held by consumers who are well accustomed to purchasing and downloading digital content.

This will accelerate the development of the video Web.

Jupiter has learned that Apple is already at work on the successor to the Nano, a subcutaneously implantable flash-based player to be called the “Femto.”

Sorry, I could neither resist nor wait until April Fools’ Day, when the femto might well be a reality.

I was in the Apple store down in SoHo this morning to tape an interview for the BBC in advance of the company’s earnings announcement today.

I know it’s been noted before, but the place is amazing. The company consistently delivers a virtuosic performance when it comes to customer experience–in its products, in its PR and advertising, and in the physical space of the store.

The store is in what is arguably one of Manhattan’s coolest neighborhoods, on a block surrounded by stores featuring prestigious brands. The space inside is airy and clean, brushed aluminum, natural wood and stainless steel, with a glass staircase leading up to a second level featuring a skylight, a small auditorium where the weary or gung-ho can take in a demo by an enthusiastic young pitchman or screen the latest Apple TV ads.

The background music is hip but not too hip to middle-aged ears. The products are all out on simple wooden tables, calling visitors to handle them. There’s even a table aimed at kids or parents shopping for kids, with iMacs running kid software and rubbery spheres instead of seats to sit on.

I’m afraid I contracted a case of “vendor glow” before my interview. Still, even at a remove of several hours, I will attest to the fact that Apple has brought the notion of user experience to new heights.

Let’s see how their earnings call goes. (Clients, check our fresh portable music device forecast for reference.) And everyone, feel free to join us for breakfast as my colleagues Michael and David (Card) chart the course of digital music.