If digital media is to become as much a part of the American living room as the couch and the TV, it may take Apple Computer to get us there.A viewpoint that echoes Michael Gartenberg at Jupiter Research:
For years now, technovisionaries have dreamt of a world in which consumers can order a pizza, watch any TV show or movie ever made, or teleconference with family and friends, all over their television sets from the comfort of their couch. But few Americans have anything like the digital living room envisioned by the digerati and, what's more, it's not clear they even want it.
That's because today's entertainment systems "just work," according to Robert Acker, vice president of digital music services at RealNetworks, at a business conference last month.
"Part of our challenge as an industry is to create something that's just as easy to use as what we want them to replace -- in a way that doesn't require any [time] investment on their part," Acker said.
Although Acker would likely dispute the notion, that may be where Apple comes in. From the PC to the digital music player, the company has been a key player over the last 30 years in making digital technology user-friendly -- and mainstream.
Of all the companies that could lead Americans into the digital living room, "Apple's in the best position," says Tim Bajarin, president of Creative Strategies, an industry research firm. "Whether it takes advantage of it is a totally separate question."
It's not about music or video, it's about information flow and where that information flows to and from. As we've said before, Apple controls one endpoint in the home and that already begins to change how content flows. It's helped Apple get a proprietary connector as an option on 40% of new cars sold in the US (making the Mercedes your neighbor bought the ultimate iPod accessory). That's an amazing task (ask anyone who covers auto how hard it is to get auto makers to put your stuff on their cars in a short period of time. Ask Microsoft's Auto group that's been trying to get USB on board for years with little success). Microsoft certainly can not allow Apple to control another one and still deliver on their vision of the digital home.
In other words, Apple's strength is their ability to deliver an end-to-end serivce that's simple to use (as opposed to Microsoft's "federated" approach to delivering a digital music experience).
In the PC business, especially addressing the enterprise market, this closed platform approach has been seen as a liability and some industry analysts believe that Apple's repeating past mistakes with the iPod. Setting aside for a second the fact that I believe Apple's reluctance to license the Mac OS was not the major factor in their marginalization in the PC industry (I actually think Apple never stood a chance with the enterprise customer), I think these analyses ignore the only mature(ish) crossover (from computer technology to consumer electronics) successes in the living room: game consoles.
Nobody could possibly argue that either the PlayStation or Xbox are open platforms. Sony and Microsoft are aggressive gatekeepers in both cases, and they control their ecosystems tightly. What Apple has managed to do is create a similar model (release a hardware/software platform where the value is determined by third party software) where they're profitable on the hardware quickly, as opposed to absorbing years of losses for each unit sold, and recouping their investment in licensing and manufacturing fees to the software developers and publishers.
I haven't fully thought this through, but it would seem that the parallel is worth investigating further. If so, Microsoft had better decide quickly to enter the hardware business (just as it did with the Xbox) in the hopes that it can deliver the seamless experience that Apple has with the iPod, iTunes, and iTunes Music Store.
