By HOLMAN W. JENKINS, JR...The Wall Street Journal
Apple had snafus under Steve Jobs—antenna-gate, MobileMe, the frequently obtuse Siri. Its latest snafu, a faulty maps application installed on the new version of the iPhone, isn't a testament to the inferiority of Apple's current management. The snafu will be easily rectified by, if nothing else, Google releasing and Apple approving a version of the Google Maps app for the iPhone 5.
For entirely different reasons, though, the map mess demonstrates why circumstances are turning against Apple's current business model. Simply, content is king again. However much it might benefit Apple's business model to force users to patronize its own maps app, the company won't get far in trying to deny them Google's far superior app. Apple for a while managed to tame the power of content and make it subservient, but that day is coming to an end.
Forget the maps farrago. Look at Apple's agony over the TV puzzle. Apple is frustrated because there is no solution to TV that will let Apple keep doing what it has been doing.
Like schnauzers overreacting to the postman's arrival, the tech press was in a tizzy a month ago on reports that Apple was talking to the cable industry about bringing cable's linear channel lineups to a future Apple device. But the technical feat is no technical feat. Time Warner and Cablevision managed to roll out iPad apps within days of the device's debut 2½ years ago.
These TV apps proved unsatisfactory not because of any lack of Apple magic, but because only certain channels were available, and because consumers were allowed only to watch in the home (the whole point of an iPad is its portability). Even so, the Hollywood studios that actually own the shows sued saying the apps violated their contract rights.
Apple's fans imagine the company can do for TV what it did for music: breaking up the existing distribution model. Forget about it. Television is about to demonstrate the inadequacy of Apple's own business model.
Video-content owners, including everyone from the TV networks and Hollywood and the NFL and Major League Baseball, aren't the music industry or even the book industry. Video-content owners aren't looking for a savior and ultimately won't be satisfied with anything less than an open ecosystem accessible by any device.
They'll have no choice: Content owners already see their business being upended by Netflix and Amazon Instant Video, with an approach adapted to digital ubiquity from the get-go. They also know, if they sit still, their current partners, the cable industry and its analogues, will simply take advantage, as satellite operator DISH is doing with its ad-skipping function that so infuriates the TV networks.
In such a world, Apple will have to change too. To maintain its position, the company will have to focus more on giving its devices superb access to content it doesn't control and hasn't approved.
Can Apple CEO Tim Cook and company make the turn? Two years ago, in a column on the Microsofting of Apple, we noted that a company preoccupied with products was in danger of becoming a company preoccupied with "strategy"—which we defined as zero-sum maneuvering versus hated rivals.
Yep. Apple's rejection of Google's superior maps is an obvious example, but it goes with the turf. Apple's spectacular success with devices naturally led to the temptation of a network-effects empire. To such empires, maps are just too important as a way to gather information about users and hit them with ads and e-commerce opportunities.
A similar miscalculation led Microsoft to treat Netscape as a mortal threat and into a self-defeating tussle with a reciprocally purblind Justice Department. The Web did indeed create enormous opportunities that were seized by companies other than Microsoft, but Microsoft is still around and doing fine.
Let it be said that some techies see evidence of a more rational impulse within Apple. They say Apple's browser and HTML5 support are conspicuously superior to Android's. Within Apple apparently there are teams committed to making sure Apple devices are competitive in the open-ecosystem world that is coming.
The real test will be for senior management. The time to worry will be if Apple's quixotic quest for TV leads it to block more realistic solutions that emerge on the open Internet. When Apple admits defeat about TV, that may be the best sign for the company's future.
On a final note, lagging investment in fixed broadband, rather than the failure of Steve Jobs to "solve" TV, is the real thing propping up the existing TV model.
Notice that virtually every effort to bring Americans superfast broadband so far has been married with TV: cable's bundled offers; AT&T's U-verse product; Verizon's FiOS fiber product. Even Google at the last minute discovered that it needs a TV offering to assure adequate take-up of the fiber it is rolling out in its Kansas City demonstration project.
As Google's late conversion mutely testifies, the uncertain economics of TV is why competitive fervor to bring us faster Internet has slowly leached out of the broadband sector. How TV content owners in the future will get paid is but the flip side of the question of how pipe providers will get paid.
These are our old friends, chicken and egg, but sooner or later the dilemma will work itself out. And when it does, expect the TV and broadband businesses both to reorganize themselves almost overnight.
Apple had snafus under Steve Jobs—antenna-gate, MobileMe, the frequently obtuse Siri. Its latest snafu, a faulty maps application installed on the new version of the iPhone, isn't a testament to the inferiority of Apple's current management. The snafu will be easily rectified by, if nothing else, Google releasing and Apple approving a version of the Google Maps app for the iPhone 5.
For entirely different reasons, though, the map mess demonstrates why circumstances are turning against Apple's current business model. Simply, content is king again. However much it might benefit Apple's business model to force users to patronize its own maps app, the company won't get far in trying to deny them Google's far superior app. Apple for a while managed to tame the power of content and make it subservient, but that day is coming to an end.
Forget the maps farrago. Look at Apple's agony over the TV puzzle. Apple is frustrated because there is no solution to TV that will let Apple keep doing what it has been doing.
Like schnauzers overreacting to the postman's arrival, the tech press was in a tizzy a month ago on reports that Apple was talking to the cable industry about bringing cable's linear channel lineups to a future Apple device. But the technical feat is no technical feat. Time Warner and Cablevision managed to roll out iPad apps within days of the device's debut 2½ years ago.
These TV apps proved unsatisfactory not because of any lack of Apple magic, but because only certain channels were available, and because consumers were allowed only to watch in the home (the whole point of an iPad is its portability). Even so, the Hollywood studios that actually own the shows sued saying the apps violated their contract rights.
Apple's fans imagine the company can do for TV what it did for music: breaking up the existing distribution model. Forget about it. Television is about to demonstrate the inadequacy of Apple's own business model.
Video-content owners, including everyone from the TV networks and Hollywood and the NFL and Major League Baseball, aren't the music industry or even the book industry. Video-content owners aren't looking for a savior and ultimately won't be satisfied with anything less than an open ecosystem accessible by any device.
They'll have no choice: Content owners already see their business being upended by Netflix and Amazon Instant Video, with an approach adapted to digital ubiquity from the get-go. They also know, if they sit still, their current partners, the cable industry and its analogues, will simply take advantage, as satellite operator DISH is doing with its ad-skipping function that so infuriates the TV networks.
In such a world, Apple will have to change too. To maintain its position, the company will have to focus more on giving its devices superb access to content it doesn't control and hasn't approved.
Can Apple CEO Tim Cook and company make the turn? Two years ago, in a column on the Microsofting of Apple, we noted that a company preoccupied with products was in danger of becoming a company preoccupied with "strategy"—which we defined as zero-sum maneuvering versus hated rivals.
Yep. Apple's rejection of Google's superior maps is an obvious example, but it goes with the turf. Apple's spectacular success with devices naturally led to the temptation of a network-effects empire. To such empires, maps are just too important as a way to gather information about users and hit them with ads and e-commerce opportunities.
A similar miscalculation led Microsoft to treat Netscape as a mortal threat and into a self-defeating tussle with a reciprocally purblind Justice Department. The Web did indeed create enormous opportunities that were seized by companies other than Microsoft, but Microsoft is still around and doing fine.
Let it be said that some techies see evidence of a more rational impulse within Apple. They say Apple's browser and HTML5 support are conspicuously superior to Android's. Within Apple apparently there are teams committed to making sure Apple devices are competitive in the open-ecosystem world that is coming.
The real test will be for senior management. The time to worry will be if Apple's quixotic quest for TV leads it to block more realistic solutions that emerge on the open Internet. When Apple admits defeat about TV, that may be the best sign for the company's future.
On a final note, lagging investment in fixed broadband, rather than the failure of Steve Jobs to "solve" TV, is the real thing propping up the existing TV model.
Notice that virtually every effort to bring Americans superfast broadband so far has been married with TV: cable's bundled offers; AT&T's U-verse product; Verizon's FiOS fiber product. Even Google at the last minute discovered that it needs a TV offering to assure adequate take-up of the fiber it is rolling out in its Kansas City demonstration project.
As Google's late conversion mutely testifies, the uncertain economics of TV is why competitive fervor to bring us faster Internet has slowly leached out of the broadband sector. How TV content owners in the future will get paid is but the flip side of the question of how pipe providers will get paid.
These are our old friends, chicken and egg, but sooner or later the dilemma will work itself out. And when it does, expect the TV and broadband businesses both to reorganize themselves almost overnight.
