Apple should remain a major PC player: the objective argument. The MP3 market is a rapidly changing one with little sustained loyalty and where power is controlled, for the most part, by the content owners, not the device makers. Technology in this segment is moving very rapidly, and whoever owns the digital rights management (DRM) standard adopted by the major content owners probably will own the core components of the standard solution.The consumer electronics space is in constant flux. Take a look at how companies such as Sonic Blue have struggled in this market and how, increasingly, firms ranging from Sony to GE have found that holding a segment can be difficult, even with their massive resources. For example, its useful to recall that entrenched products or standards such as BetaMax, Munz eight-track audio, projection TVs and Polaroid cameras, as well as Atari and Commodore game systems, enjoyed strong consumer market positions. But these products ended their existence so quickly that many couldnt even remember them just a few years later. Handheld computers and a new class of video media players are both aggressively targeting this segment. Even old partners such as Adobe are starting to position against Apple. These moves show that while the PC market is clearly competitive, the consumer electronics market has, historically, been more so. The trading floor is littered with companies such as RCA that once were dominant and now are only a brand or, like Munz, not even that. The end result is that while Apple is doing very well in this new multimedia market at the moment, this opportunity could evaporate in less than a month. Without the much-slower-moving PC business as a backstop, Apple could be out of business long before it had a chance to react. More important, iPod users who also own a Macintosh will be the most loyal to the audio platform. Why? Because if a newer, better product should enter the market from another vendor, it is unlikely that the new player would even work on the Mac platform. This provides Apple with an additional hedge should the more-fickle WinTel user base jump to the newer offering. On one point, I do agree with Jim Louderbacks thesis that Apple should quit the PC business: The company is moving away from its PC roots and appears to be quietly reaching a point where it will have no choice but to abandon the PC market. However, I disagree that this is the right direction or choice. Apple needs to find a way to grow market share and interest, even if, like Sun, it must come to some disagreeable choices. An Apple without PCs would probably lead to a world without Apple. And we should do whatever we can to ensure that that result doesnt happen. Rob Enderle is the principal analyst for the Enderle Group, a company specializing in emerging personal technology. Full disclosure: One of Enderles clients is Microsoft as well as Advanced Micro Devices, Dell, Gateway, Hewlett-Packard, Intel, Transmeta, VIA and Vulcan. In addition, Enderle sits on advisory councils for AMD, ClearCube, Comdex, Dell, Hewlett-Packard, IBM, Intel, Microsoft and TCG. Check out eWEEK.coms Macintosh Center at http://macintosh.eweek.com for the latest in news, reviews and analysis about Apple in the enterprise. Be sure to add our eWEEK.com Macintosh news feed to your RSS newsreader or My Yahoo page:
Now, Apple isnt a content owner, and its recently demonstrated unwillingness to license its DRM scheme to RealNetworks, Musicmatch and others indicates that it probably wont win the standards fight. Besides, thats where Microsoft increasingly has the inside track.