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Tuesday, January 15, 2008

Classic Jobs Keynote

As they like to say in the business world, there is no one better than Steve Jobs at selling both the steak and the sizzle. The Apple CEO has been tagged the ultimate pitch-man for his ability to impart passion, insightfully depart information, and induce mania for Apple new products.

As CNet's Tom Krazit says, Apple is the most influential technology company at the start of the 21st century. Least not forgot, Apple was also the most influential company in the early 1980s, supplanting IBM and effecting the future of computing at every step thereafter.

In many ways, the 2008 Macworld keynote was classic Steve Jobs. You can tell he loves the technology, he truly thinks Apple is the most incredibly innovative company in America and its design teams led by Jonathan Ives surpasses everyone else in the industry. Steve is right and he has every right to believe it and be passionate about Apple's future.

I am often in conflict with friends who take a cynical view of Apple and how it releases its technology. For instance, I find myself in disagreement with almost anybody who says Apple limits its technology and services to the user base simply to make more money. Developing hardware and software is an immensely complicated business and precise process. Making products that package a range of engineered components involves negotiations between very powerful interests and often restrictive technology benchmarks.

And precisely because Apple motive for making products isn't simply to make money, it makes their risk and adventure much more dramatic.

WIRED's recent article on the obstacles Apple faced in designing and launching the iPhone into the marketplace is a case study in modern business in the time of Moore's Law. It was Moore's law that long ago calculated computing power per unit cost. Roughly stated Moore, a Caltech professor who never saw a personal computer nor a retail store selling them, said computing power increases by a factor of two every year. Since 1965 when Moore made this claim, it has become applied widely to transistors, hard drive storage capacity, flash drives, optical disc, and clock times of CPUs. And while capacity doubles, it also drops in price significantly.

When designing products, companies like Apple, Intel, and Microsoft are trailblazing in a constantly changing river of fleeting numbers and calculations. A SDD flash drive with 64GB of space might be extremely expensive today but in six months a 128GB drive costing half as much could well find its way onto the market. That's the danger with being on the technology leader. Raging cost conscious consumers assume Apple is ripping them off because it charges a premium when, in fact, when you apply Moore's law, Apple is at the higher edge of the curve with leading edge technologies.

I truly believe, at the end of the day, Jobs and his team at Apple just want to make really cool objects and tools. That is the bottom line for them. And as numerous attempts in the past have shown, Apple has failed with the Newton, Mac Classic, Motorola ROKR with iTunes, Mac Cube and even Apple TV built into the old Performa line.

AppleTV

In this years keynote, Job's owed up to the fact that AppleTV last year failed. Why? Mostly because he felt they were trying to use the device to move content from the computer to the TV. Now, it seems Apple is more committed to Movies. Apple's answer to this opportunity is to create a relationship between the movie industry and the home viewing of film a direct one in the form of rentals. The key here comes at the beginning of Job's talk about iTunes, where he says, Apple found people wanted to own their favorite music because they will listen to their favorite song hundreds or maybe thousands of times during their lifetime.

However, in the world of films it is completely different than music. We all have our favorite films but, with the exception of extreme cases (Rocky Horror Picture Show, little girls watching The Princess Diaries or The Wizard of Oz) we only see them once, maybe twice, over the duration of our lives. The rental business is better suited to these habits of the average viewer.

Therefore, Jobs believes AppleTV (which might be better called AppleFilm or AppleRental) should be a direct conduit for its owners to go out and search for movies from the major and indie distribution companies, pay a fee for temporary possession and then have them delivered directly to AppleTV and onto your HD TV. This doesn't answer the question of DVR but it does give current AppleTV owners more features and no additional cost.

What Apple, the studios, and distributors needed to devise to get here is a set of rules under which the content would be viewed that comfortably suit the consumer. All of this when added to AppleTV's already existent capabilities is great. The message should be keep adding new capabilities for your customers. And as long as Apple gave this software upgrade away to AppleTV owners for free -- all the better. We really can't complain.

If Apple and the studios start to execute and quickly provide home viewers with top notch films without the bother of having to go to the rental store or receive and send DVDs in the mail, this could be a big break through in the way we see our first run movies and VOD in the future. The content is available by cable and satellite, however, the cable service providers are so poor at designing the user interface, so bad at customer support and indifferent to the needs that there is a big opening for Apple and the distributors.

If there is a huge outcry of disappointment with Macworld San Francisco 2008, it is not because of what Apple showed us as new, it is what they left out. There was such a loud hue-and-cry for an iPhone upgrade to fix its drawbacks and deficiencies, for Apple to address problems with its withering Mac mini and long denied Apple monitors. Many wanted Apple to give them a home media device far more encompassing than the AppleTV with DVR and DVD capabilities and thus a wave of post-MWSF disappointment has swept over Apple-nation only equal to the level of anticipation and excitement going into San Francisco on Monday.

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