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Consumer electronics companies need to do more than pare product lines and make cool stuff. What Apple offers is a complete ecosystem.
Gadget lovers take note: Consumer electronics (CE) companies are cutting back their product lines. Gone are the days when manufacturers created a dozen in-line products to cover every price point. Rather than spreading chips across the table, CE brands like Sony (SNE) and Samsung are following Apple's (AAPL) lead by stacking more chips on a few well-placed bets. Sony, for example, now offers just three models of ultra-slim point-and-shoot cameras in its CyberShot line. But will such paring enable Sony and others to succeed the way Apple has? Will this mean more products we love or more dross on the shelves?
Maybe you're thinking, "Not more Apple hype." But it's hard not to think of Apple as the innovator in the CE space. Apple is driving digital lifestyle on a global scale, and it's doing so in the face of economic adversity. The National Retail Federation reported that consumer spending on Black Friday dropped 3.5% compared with 2006. According to a MasterCard (MA) Spending Pulse report, sales of electronics rose just 2.7% from Thanksgiving to Dec. 24, 2007, over the same period a year earlier. Meanwhile, Apple anticipates holiday-quarter sales of $9.2 billion, a 29% increase over 2006, while the Mac operating system hit a record 8% market share in the closing days of the year. With the annual Consumer Electronics Show fast approaching, Apple is once again sure to be the talk of a trade show it doesn't even attend.
Design Alone Isn't Enough
To succeed like Apple, CE brands need to do more than create cool-looking products that are rich in features and intriguing behaviors. A cool object may be at the center of the experience, but as others have noted, surrounding a successful product like the iPod is a complete ecosystem that includes content and services, software and interfaces, retail experience, Web site experience, and an army of accessories. Imagine competing with NASA by designing a better space shuttle—but ignoring the launch pad, ground control in Houston, or the facilities at Cape Canaveral. Apple is successful because all of the elements of its ecosystem are in place—and are consistently meaningful and relevant to its target consumers.
According to the latest NPD report, Apple has secured over 70% market share for MP3 players. What's less well known, and more impressive, is the ratio of Apple's investment in the iPod platform relative to its return. Since 2004, Apple has added just one item to the iPod range, the iPod touch, making four pieces of hardware in all. In the same period, the catalog of available content (songs, TV shows, films) has increased 600%, to 4.1 million items. And—here's the pièce de résistance—the number of iPod accessories has increased tenfold, to 3,000. Apple collects fees for most, if not all, of those accessories, with third-party vendors and manufacturers paying to add the "Made for iPod" logo to a package or, in the case of connected accessories like speaker docks, a fee to use the proprietary Apple connector.
Many companies have tried to replicate Apple's success by imitating at the product level and focusing on the design of the object itself. Creative Technology has designed media players with simple geometric shapes, high-end details, and a polished look. Speaker docks from Altec, Logitech, JBL and Bose have tried to match (and keep pace with) the Apple color palette.
The makers of other music players have also used smart design to try to stand out—case in point is Microsoft's (MSFT) latest Zune media player, an inspired object with intriguing design, cool behavioral features, beautiful details, splendid packaging, and a compelling interface. A number of accessory providers have mimicked the look of Apple's fresh, uncluttered packaging. But none of this is enough.
Mind Share
Take Sony. It's an amazing company with a powerful brand. Innovative product platforms like the portable transistor radio and the Walkman set the stage for the digital lifestyle era. Yet it has struggled to transpose that success to the 21st century. In 2005 it outlined a strategy to reduce its SKU count by 20% by 2007, detailing a desire to focus on "champion" products and avoid having to battle competition on many fronts. So while four years ago, Sony offered a dizzying array of digital cameras that recorded on all kinds of media (floppies, MemorySticks, DVDs), now it has just three lines (ultra-slim, compact, SLR). That's better for consumers, most of whom don't care that Model 1 has a 2MB cache while Model 25 has 4MB. In December, 2007, CEO Howard Stringer announced that Sony's efforts were beginning to pay off. It is close to achieving a 5% net margin for 2007.
Apple ended its fiscal year on Sept. 30, 2007, with a net margin of nearly 15%. To succeed like Apple, companies need to understand more deeply the consumer they are targeting. Apple recognizes that it can't have everyone as its customer. It is willing to alienate some segments by appealing to a strong core of people that sociologists refer to as the Cultural Creatives. These are the people who wait in line overnight for the latest iPod or MacBook. Focusing on the Cultural Creatives in turn attracts followers who might not otherwise trust the brand.
Observe the next 10 people you see on the street with an iPod and ask yourself how many of them represent the Cultural Creatives featured in Apple's advertising. One, maybe two? Address your core audience. The rest will follow. That's how you sell 10 million iPods in one quarter.
In the hands of an artful company like Apple, design is the vehicle for driving meaningful, relevant experiences that are authentic to the brand. It's not about paring product lines or making cool stuff. Done right, design can add value to the bottom line and the brand. Design done right goes beyond the appearance and behavior of the object itself. It takes the entire product ecosystem into consideration. Design done right sees technology as an enabler, not the solution.
Apple creates holistic experiences that inspire strategic partners like accessory manufacturers and content providers to build up the platform. Apple understands: It's not about market share. It's about mind share.
Monday, January 7, 2008
Saturday, January 5, 2008
Apple Files for OLED Keyboard Patent
Need help with your Mac? Contact Victor Orly!
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Art Lebedev's Optimus keyboard (now the Optimus Maximus) has been around in various incarnations for a few years now, with the full-size version having been released on March 15 of last year (2007, in case you're still getting used to the 2008 thing). But just two days before its official (re-) release, Apple filed a patent application for a dynamically controlled keyboard, the contents of which were published yesterday.
At first glance, the invention described in Apple's patent looks quite a bit like the Optimus Maximus. The patent describes a method for changing what is displayed on a keyboard's keys by putting OLEDs (organic LEDs) and circuitry in each key. The various OLEDs could be turned on and off, leading to different images being displayed on the keys. Applications would then tell the keyboard what to display on each key, depending on what the user was doing at the time. Imagine a "play" button being displayed on the spacebar while in iTunes, which would change to a "pause" symbol after pressing play, and you've got the basic idea.
This type of keyboard would really shine for media work, since applications like Photoshop, Logic, and Final Cut could be significantly simplified by displaying more information about (and on) each key. And while the Optimus Maximus is a bit expensive, Apple could certainly mass-produce something similar for less money, perhaps bringing the price into reality for most users. Lebedev has, however, apparently applied for several patents for the Optimus, so it's unclear just what Apple is up to, or what would happen if the company were ever to release such a product. I wouldn't count on seeing this anytime soon, but a guy can dream, right?
(310) 891-6820 x101 or email vicblog@orly.com
Art Lebedev's Optimus keyboard (now the Optimus Maximus) has been around in various incarnations for a few years now, with the full-size version having been released on March 15 of last year (2007, in case you're still getting used to the 2008 thing). But just two days before its official (re-) release, Apple filed a patent application for a dynamically controlled keyboard, the contents of which were published yesterday.
At first glance, the invention described in Apple's patent looks quite a bit like the Optimus Maximus. The patent describes a method for changing what is displayed on a keyboard's keys by putting OLEDs (organic LEDs) and circuitry in each key. The various OLEDs could be turned on and off, leading to different images being displayed on the keys. Applications would then tell the keyboard what to display on each key, depending on what the user was doing at the time. Imagine a "play" button being displayed on the spacebar while in iTunes, which would change to a "pause" symbol after pressing play, and you've got the basic idea.
This type of keyboard would really shine for media work, since applications like Photoshop, Logic, and Final Cut could be significantly simplified by displaying more information about (and on) each key. And while the Optimus Maximus is a bit expensive, Apple could certainly mass-produce something similar for less money, perhaps bringing the price into reality for most users. Lebedev has, however, apparently applied for several patents for the Optimus, so it's unclear just what Apple is up to, or what would happen if the company were ever to release such a product. I wouldn't count on seeing this anytime soon, but a guy can dream, right?
Wednesday, December 26, 2007
Apple shares hit $200 for first time ever
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SAN FRANCISCO (MarketWatch) -- Apple Inc. shares on Wednesday hit $200 for the first time in the company's history. In afternoon trading, Apple's stock rose $1.20 to a new all-time intraday high of $200 a share. For the year, Apple's stock has risen 134% as the company has seen strong sales of its Macintosh computers and the iPhone.
(310) 891-6820 x101 or email vicblog@orly.com
SAN FRANCISCO (MarketWatch) -- Apple Inc. shares on Wednesday hit $200 for the first time in the company's history. In afternoon trading, Apple's stock rose $1.20 to a new all-time intraday high of $200 a share. For the year, Apple's stock has risen 134% as the company has seen strong sales of its Macintosh computers and the iPhone.
Tuesday, December 25, 2007
Apple's iPhone: Great -- or Greatest?
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Apple shares are closing in on $200 per share, as speculation grows that iPhone sales are far better than anyone anticipated.
There are rumors all over the web that Apple will announce staggering handset unit sales at Macworld next month. And while I fully anticipate strong numbers, I'm a little skeptical that they'll measure up to some of the wild estimates making the rounds.
9to5mac.com, for one, suspects Apple will announce 5 million iPhones sold so far at Macworld. The site adds that, "If that's true, it would put Apple at half of its 2008 sales goal before 2008 even starts."
The site goes on to suggest such huge numbers would mean that "despite Apple only selling one model of GSM iPhone in four countries with four dedicated carriers, Apple's shipments in this quarter -- around 3.5 million -- will be very close to the 3.9 million Blackberry smartphones Research In Motion shipped in its most recent quarter across more than 100 carriers and 13 product lines."
To say that outlook is optimistic is a dramatic understatement, and if true, it would blow past the most bullish estimates on the Street.
Piper Jaffray says the 5 million number would be mean a huge jump in handset sales during the December quarter. Piper is modeling 2 million units sold. This 5 million unit figure would mean something closer to 3.6 million units. That's a long shot. Gene Munster tells me this morning, "The phone is selling well, but not that well."
As for the rest of 2008, Piper does anticipate a 3G version of iPhone by June as I have previously written, and also suggests that if that happens, and the price still hovers at $300, the Apple could overtake RIM's Blackberry as the best-selling high-end smart phone on the market.
That'd be some trick for a product that's so brand new to the marketplace. But all this suggests that Apple's strong move today may come from investors looking ahead to another robust product pipeline from Apple in 2008. I've written about what my sources have told me about the new sub-notebook coming -- which should be unveiled at Macworld. Now we're hearing rumblings about ongoing, strong sales of the iPhone.
We'll see what Apple does with iPod.
Macworld is a Mac-centric event, sure. But the company took the wraps off iPhone at the last one. That could mean a nice iPhone update this time around. It's due for one: revised sales figures, new markets (China?) and new capabilities all would be big news for the Mac faithful. And the company's shareholders. Strap in, folks: This could be a very happy new year indeed for Apple.
(310) 891-6820 x101 or email vicblog@orly.com
Apple shares are closing in on $200 per share, as speculation grows that iPhone sales are far better than anyone anticipated.
There are rumors all over the web that Apple will announce staggering handset unit sales at Macworld next month. And while I fully anticipate strong numbers, I'm a little skeptical that they'll measure up to some of the wild estimates making the rounds.
9to5mac.com, for one, suspects Apple will announce 5 million iPhones sold so far at Macworld. The site adds that, "If that's true, it would put Apple at half of its 2008 sales goal before 2008 even starts."
The site goes on to suggest such huge numbers would mean that "despite Apple only selling one model of GSM iPhone in four countries with four dedicated carriers, Apple's shipments in this quarter -- around 3.5 million -- will be very close to the 3.9 million Blackberry smartphones Research In Motion shipped in its most recent quarter across more than 100 carriers and 13 product lines."
To say that outlook is optimistic is a dramatic understatement, and if true, it would blow past the most bullish estimates on the Street.
Piper Jaffray says the 5 million number would be mean a huge jump in handset sales during the December quarter. Piper is modeling 2 million units sold. This 5 million unit figure would mean something closer to 3.6 million units. That's a long shot. Gene Munster tells me this morning, "The phone is selling well, but not that well."
As for the rest of 2008, Piper does anticipate a 3G version of iPhone by June as I have previously written, and also suggests that if that happens, and the price still hovers at $300, the Apple could overtake RIM's Blackberry as the best-selling high-end smart phone on the market.
That'd be some trick for a product that's so brand new to the marketplace. But all this suggests that Apple's strong move today may come from investors looking ahead to another robust product pipeline from Apple in 2008. I've written about what my sources have told me about the new sub-notebook coming -- which should be unveiled at Macworld. Now we're hearing rumblings about ongoing, strong sales of the iPhone.
We'll see what Apple does with iPod.
Macworld is a Mac-centric event, sure. But the company took the wraps off iPhone at the last one. That could mean a nice iPhone update this time around. It's due for one: revised sales figures, new markets (China?) and new capabilities all would be big news for the Mac faithful. And the company's shareholders. Strap in, folks: This could be a very happy new year indeed for Apple.
Monday, December 24, 2007
Apple Seeks to Patent Antipiracy Technology
Need help with your Mac? Contact Victor Orly!
(310) 891-6820 x101 or email vicblog@orly.com
Apple Inc. has filed an updated application with the U.S. Patent & Trademark Office for a product activation and anti-piracy technology that would give the company the same kind of control over its software as the oft-criticized Windows Genuine Advantage platform provides its rival, Microsoft Corp.
Patent application 20070288886, titled "Run-Time Code Injection To Perform Checks" and dated Dec. 13, spells out a "digital rights management system" that would "restrict execution of that application to specific hardware platforms."
In the application, Apple noted the ease with which digital information can be copied and the just-as-easy way users could break promises not to illegally distribute copies of that data. It also admitted that, in the end, copy-protection schemes such as dongles or encrypting software wouldn't stop pirates on a mission. "There is very little, however, that these approaches can do to thwart a determined user," the patent filing stated.
"Thus, it would be beneficial to provide a mechanism to restrict the execution of one or more applications to a specific hardware platform that is transparent to the user."
Apple currently does not copy-protect its Mac OS X operating system, or tie a specific copy of the OS to a given notebook or desktop Macintosh machine.
The scheme Apple outlined in the patent application would rely on a cryptographic key generated prior to the hardware reaching the user. As an application launches, the technology would inject code into the app's executing code stream, generate data that's sent to a digital rights management module, then compare that signed data with the key. If they match, the application continues to open. If not, it's stopped in its tracks.
Such checks could be done on a very frequent basis, said Apple's patent application.
"In general, the selected time period should be small enough to prevent significant use of an unauthorized application or system, yet long enough so as not to degrade system performance," the filing read. Apple used an example of a check every five to ten minutes, which is much more often than Microsoft's Windows Genuine Advantage (WGA) technology. In June 2006, Microsoft took heat, then modified WGA, after users found out it was "phoning home" to the company's servers daily.
Patent application 20070288886 isn't new, the December filing noted, but rather builds on other applications, including one first filed in mid-2005 but not publicly posted until early January 2007.
Apple was not immediately available for comment, but has a policy of not commenting on patent applications.
(310) 891-6820 x101 or email vicblog@orly.com
Apple Inc. has filed an updated application with the U.S. Patent & Trademark Office for a product activation and anti-piracy technology that would give the company the same kind of control over its software as the oft-criticized Windows Genuine Advantage platform provides its rival, Microsoft Corp.
Patent application 20070288886, titled "Run-Time Code Injection To Perform Checks" and dated Dec. 13, spells out a "digital rights management system" that would "restrict execution of that application to specific hardware platforms."
In the application, Apple noted the ease with which digital information can be copied and the just-as-easy way users could break promises not to illegally distribute copies of that data. It also admitted that, in the end, copy-protection schemes such as dongles or encrypting software wouldn't stop pirates on a mission. "There is very little, however, that these approaches can do to thwart a determined user," the patent filing stated.
"Thus, it would be beneficial to provide a mechanism to restrict the execution of one or more applications to a specific hardware platform that is transparent to the user."
Apple currently does not copy-protect its Mac OS X operating system, or tie a specific copy of the OS to a given notebook or desktop Macintosh machine.
The scheme Apple outlined in the patent application would rely on a cryptographic key generated prior to the hardware reaching the user. As an application launches, the technology would inject code into the app's executing code stream, generate data that's sent to a digital rights management module, then compare that signed data with the key. If they match, the application continues to open. If not, it's stopped in its tracks.
Such checks could be done on a very frequent basis, said Apple's patent application.
"In general, the selected time period should be small enough to prevent significant use of an unauthorized application or system, yet long enough so as not to degrade system performance," the filing read. Apple used an example of a check every five to ten minutes, which is much more often than Microsoft's Windows Genuine Advantage (WGA) technology. In June 2006, Microsoft took heat, then modified WGA, after users found out it was "phoning home" to the company's servers daily.
Patent application 20070288886 isn't new, the December filing noted, but rather builds on other applications, including one first filed in mid-2005 but not publicly posted until early January 2007.
Apple was not immediately available for comment, but has a policy of not commenting on patent applications.
Apple to Launch iPod With Automatic Volume Control
Need help with your Mac? Contact Victor Orly!
(310) 891-6820 x101 or email vicblog@orly.com
Listening to music non-stop has never been easier since the iPod came along.
But future versions of Apple's MP3 player are to be adapted to prevent users from playing tracks at full blast through their earphones for too long.
Amid growing fears that listeners could cause irreversible damage to their hearing - the highest setting is as loud as a chainsaw - Apple is developing an automatic volume control.
A new patent reveals that the next iPods and iPhones could automatically calculate how long a person has been listening and at what volume, before gradually reducing the sound level.
The device will also calculate the amount of "quiet time" between when the iPod is turned off and when it is restarted, allowing the volume to be increased again to a safe level.
The patent states: "Since the damaging effect on users' hearing is both gradual and cumulative, even those users who are concerned about hearing loss may not behave in a manner that would limit or minimise such damaging effects."
Listening to volumes below 70 decibels is considered safe. But iPods can currently reach volumes of over 100 decibels - the equivalent to standing 10ft from a pneumatic drill - and enough to cause permanent damage after just 15 minutes.
Some MP3 players can even exceed 120 decibels.
In April, Apple revealed it had sold more than 100million iPods worldwide and was expecting, by the end of this year, to have sold more than 4.5million iPhones. Of those 200,000 will have been bought in Britain.
Its patent application, however, is the first time Apple has acknowledged concerns over the risk the iPod poses to hearing and comes after a series of damning studies highlighted the potentially damaging effects.
The Royal National Institute for Deaf People (RNID) has led calls for restrained listening and claimed that more than four million young people aged between 16- and 24-years-old are at risk of hearing damage from listening to loud music.
Its research showed more than half of that age group were listening to digital music players for more than an hour a day. Twenty per cent notch up more than 21 hours a week.
RNID chief executive Dr John Low said: "If young people don't heed our warnings about safer listening, they could end up facing premature hearing damage.
"If you regularly plug in, it is only too easy to clock up noise doses that could damage your hearing for ever."
Last year, researchers in the U.S. claimed that listening to an iPod on full blast for just five minutes a day could cause irrevocable hearing damage.
Audiologists from Harvard University said consumers should limit their listening to about four-and-a-half hours a day at 70 per cent volume, or 90 minutes at 80 per cent.
Many MP3 players in Europe, including France, have had volume levels capped at 100 decibels.
Apple refused to comment on its patent application.
Emma Harrison, head of campaigns at RNID, said: "If the next generation iPods do what the patent claims, it could help to protect the hearing of millions of its customers."
It is unclear whether owners of the next-generation iPod will be able to switch off the automatic volume control.
The iPod was launched in 2001 with enough memory to store 1,000 songs. The latest models can hold many times more. The Queen is said to have one capable of holding 1,500 songs.
(310) 891-6820 x101 or email vicblog@orly.com
Listening to music non-stop has never been easier since the iPod came along.
But future versions of Apple's MP3 player are to be adapted to prevent users from playing tracks at full blast through their earphones for too long.
Amid growing fears that listeners could cause irreversible damage to their hearing - the highest setting is as loud as a chainsaw - Apple is developing an automatic volume control.
A new patent reveals that the next iPods and iPhones could automatically calculate how long a person has been listening and at what volume, before gradually reducing the sound level.
The device will also calculate the amount of "quiet time" between when the iPod is turned off and when it is restarted, allowing the volume to be increased again to a safe level.
The patent states: "Since the damaging effect on users' hearing is both gradual and cumulative, even those users who are concerned about hearing loss may not behave in a manner that would limit or minimise such damaging effects."
Listening to volumes below 70 decibels is considered safe. But iPods can currently reach volumes of over 100 decibels - the equivalent to standing 10ft from a pneumatic drill - and enough to cause permanent damage after just 15 minutes.
Some MP3 players can even exceed 120 decibels.
In April, Apple revealed it had sold more than 100million iPods worldwide and was expecting, by the end of this year, to have sold more than 4.5million iPhones. Of those 200,000 will have been bought in Britain.
Its patent application, however, is the first time Apple has acknowledged concerns over the risk the iPod poses to hearing and comes after a series of damning studies highlighted the potentially damaging effects.
The Royal National Institute for Deaf People (RNID) has led calls for restrained listening and claimed that more than four million young people aged between 16- and 24-years-old are at risk of hearing damage from listening to loud music.
Its research showed more than half of that age group were listening to digital music players for more than an hour a day. Twenty per cent notch up more than 21 hours a week.
RNID chief executive Dr John Low said: "If young people don't heed our warnings about safer listening, they could end up facing premature hearing damage.
"If you regularly plug in, it is only too easy to clock up noise doses that could damage your hearing for ever."
Last year, researchers in the U.S. claimed that listening to an iPod on full blast for just five minutes a day could cause irrevocable hearing damage.
Audiologists from Harvard University said consumers should limit their listening to about four-and-a-half hours a day at 70 per cent volume, or 90 minutes at 80 per cent.
Many MP3 players in Europe, including France, have had volume levels capped at 100 decibels.
Apple refused to comment on its patent application.
Emma Harrison, head of campaigns at RNID, said: "If the next generation iPods do what the patent claims, it could help to protect the hearing of millions of its customers."
It is unclear whether owners of the next-generation iPod will be able to switch off the automatic volume control.
The iPod was launched in 2001 with enough memory to store 1,000 songs. The latest models can hold many times more. The Queen is said to have one capable of holding 1,500 songs.
Apple MacBook is Amazon’s No. 1 top-selling computer
Need help with your Mac? Contact Victor Orly!
(310) 891-6820 x101 or email vicblog@orly.com
Despite fierce competition from machines with more than twice the memory and price points hundreds of dollars lower, Apple’s (AAPL) white 120 GB MacBook has captured the top spot on Amazon’s (AMZN) list of bestselling computers this Christmas eve.
Helped along by rebates ranging from $75 to $150, three Apple-brand notebooks are on the top 10 list this morning. The other bestsellers are the 80 GB MacBook (No. 7) and the 120 GB MacBook Pro (No. 10).
Price cutting among the competition is even steeper. HP’s (HPQ) 250 GB Pavilion (No. 5) is selling for $999.99, 27% off the $1,375 list price.
The least expensive computer on the list, at No. 8, is the $381 Linux-based Asus Galaxy with a 7-inch screen and 4 GB of flash memory rather than a hard drive. Many expect Steve Jobs to announce at Macworld that Apple is entering the market for flash-based notebook computes. Apple’s thin MacBook, however, is likely to be larger, carry more memory, and cost a whole lot more than $381.
In Amazon’s list of top-selling electronics, a late surge by a heavily discounted portable hard drive has pushed an iPod off the stack. Apple had five of the top 10 spots for much of the pre-Christmas shopping period; it’s now down to four.
(310) 891-6820 x101 or email vicblog@orly.com
Despite fierce competition from machines with more than twice the memory and price points hundreds of dollars lower, Apple’s (AAPL) white 120 GB MacBook has captured the top spot on Amazon’s (AMZN) list of bestselling computers this Christmas eve.
Helped along by rebates ranging from $75 to $150, three Apple-brand notebooks are on the top 10 list this morning. The other bestsellers are the 80 GB MacBook (No. 7) and the 120 GB MacBook Pro (No. 10).
Price cutting among the competition is even steeper. HP’s (HPQ) 250 GB Pavilion (No. 5) is selling for $999.99, 27% off the $1,375 list price.
The least expensive computer on the list, at No. 8, is the $381 Linux-based Asus Galaxy with a 7-inch screen and 4 GB of flash memory rather than a hard drive. Many expect Steve Jobs to announce at Macworld that Apple is entering the market for flash-based notebook computes. Apple’s thin MacBook, however, is likely to be larger, carry more memory, and cost a whole lot more than $381.
In Amazon’s list of top-selling electronics, a late surge by a heavily discounted portable hard drive has pushed an iPod off the stack. Apple had five of the top 10 spots for much of the pre-Christmas shopping period; it’s now down to four.
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