In the last few months, Apple has made two critical changes that reflect a shift away from its Jobs-era stance on hardware, and a compelling reorientation of its software.
Hardware: Steve Jobs notably denigrated “tweener” devices that bridged – or muddled – the clean three-screen trichotomy of the iPhone (3.5″), iPad (9.7″) and Mac (11.6″ and up). He noted that phones larger than the iPhone bulked up pockets, and tablets smaller than the iPad’s 9.7-inch golden mean required users to “sand down their fingers.” And yet, the last two months saw Apple respond to market pressure from Android in the form of a larger iPhone and a smaller iPad, clear evidence that Tim Cook & Co. have seen the threat that Android products – most notably the Samsung Galaxy, Amazon Kindle, and Google Nexus 7 – pose to iDevices. The corresponding Apple changes to the iLineUp reflect Cupertino’s familiar blend of differentiation through style – the larger iPhone has gorgeous Retina display – and price, with the iPad Mini clocking in at a hefty $329.
The shift away from Jobs’s dogma does not spell death by compromise for Apple. The company has long evinced a preternatural ability to judge – and mold – consumer tastes before its competitors, and its transition to different-sized devices demonstrates the company’s flexibility on quantity in inches, but not much else. Don’t expect Apple to roll out an iPad Air to compete with the Surface, or Apple Picker search engine to compete with Google.
Software: Apple, like many other tech companies, has moved rapidly to the cloud. In the space of several months, Cupertino has phased out MobileMe and made iCloud – which wirelessly synchronizes your apps, music, movies, contacts and notes – the standard across both its OS X and iOS devices. Indeed, iCloud represents Apple’s answer to Microsoft’s similarly atmospheric SkyDrive, which offers a built-in Office Suite, as well as other popular cloud storage services like Dropbox, Box.net, and Google Drive.
In some ways, the move to the cloud dovetails naturally with Apple’s strategy, in others, it presents a curious obstacle. The app, contact and notes synchronization seems a natural extension of the iTunes ecosystem, ensuring, in true Apple fashion, uniform look and feel across all devices. But, media synchrony is a whole different animal. iTunes’ music and movie delivery structure was built on the concept of owning content, rather than pirating or ripping it. Enter the world of streaming, and the dynamic rapidly shifts from ownership to access. Content consumption no longer hinges on the download-and-go dynamic. In its place is universally accessible streaming content, thanks to seamless and fast coverage – 4th generation data networks. In some senses, this naturally works for Apple, whose drive toward SSDs (Solid State Disks) increasingly subordinated hard drive space to form factor, a Cupertino strong suit. But, critically, iTunes hinges on people purchasing music and movies. Upstarts like Spotify, Pandora and GrooveShark in the former, and Netflix, Hulu, Amazon Prime and YouTube in the latter mean that the song-for-a-buck-and-film-for-$5 model is slowly being replaced or supplemented by freemium or monthly-subscription packages – a threat to Apple’s traditional and lucrative 30% cut. That the iTunes music synching option does little for those with large music collections or a 16GB iPhone means that, in all likelihood, a streaming solution is in the works.
The result: Apple, it seems, is in talks to develop a Spotify competitor that will help ensure its domination over the mobile music, and possibly, eventually, movie space. Given the company’s recent atmospheric kick (iCloud, Thunderbolt displays, Lightning connectors), I wouldn’t be half surprised if the service is called iTunes Stream, or something like that. Either way, keep your ears and “i”s open.
