[Op-Ed] Microsoft v. iPod: Is it the Software, Stupid?
by Remy Davison, Insanely Great Mac
June 1st 2004
The widely misreported, and sadly misunderstood, remarks of Yusuf Mehdi, corporate vice president of MSN at Microsoft, have set both Mac and PC sites alight with scornful derision of his purported "$50 music players...which will look and feel as good as iPod" remark.
Problem is, of course, Mehdi didn't say it. And he's probably keeping his head down and trap shut now. The more accurate version of his comments is here. (The full transcript is available from Microsoft here).
But stop. Read between the lines. Just what is Microsoft up to? That part of Mehdi's comments, at least, should prick up all our ears.
Now, apart from a half-decent mouse, keyboard and a next-generation G5 XBox Service Pack 2, Microsoft doesn't do hardware. Not very well, anyway. Cast your mind back to, oh, around 1984. Ready? Good. Apple's about to launch the Mac. Gates is about to launch Mac software. Oh, and something called 'Windows' as well.
Fast forward 20 years. Windows runs on around 90% of the world's PCs. The Mac OS share has shrunk to maybe 5%. Why? Because Microsoft licensed its Windows OS to run on generic x86 architecture. Apple didn't.
The same two men are in charge of the same two companies. Only Apple was the behemoth in 1984 and Microsoft was small fry. And Gates was only a multimillionaire.
One thing hasn't changed: Apple's OSes (yes, plural) remain closed. Well, so does Microsoft's, except that it runs on lots of hardware, although not PowerPC. Apart from the brief clone experiment of the mid-1990s, Apple's crown jewels remain close to its chest.
Which is something that persists with the iPod. Not that anyone seems to mind that you can only play iTunes tracks on iPods, since iTunes has become Windows/Mac platform-agnostic.
Returning to our original premise: the software MS is making for a slew of music player devices. Mehdi said that third-party manufacturers would make devices which would "look and feel" as good as iPod, but would be a little bit cheaper. MS's Portable Media Center software will run on those. Then there are the $50 flash-based players. Media Center will run on those too. Is a picture forming in your head?
Yes, Microsoft is hoping to repeat that three-card-trick of the 1980s/90s: i.e., "Pick a computer, any computer." And, whichever one you pick, you'll wind up with Microsoft. Even if you picked the Mac, you wound up with Microsoft. Office. Unless you live in a cave in the Tora Bora region, and even they were using SE/30s equipped with, if I'm not mistaken...Word.
So what's the strategy?
The Redmond strategy is scale. Standardize the software. Sign on licensees. Get the RIAA on board (after all, they need all the friends they can get). Ink contracts with the record companies promising Janus DRM and the widest deployment of players in the world. The industry buys this.
Suddenly, you have scale. Economies of scale, that is. So firms can offer players with more capacity, more features and a bigger music library than Apple can manage. For maybe $50-100 less than iPod. No, these players are unlikely to ever be as good as iPod. And the music services will never be as well-organized and presented and be as easy to use as the iTMS. But remember: Windows was 'good enough'. And Windows, iteration by iteration, became a passable facsimile of the Mac OS (yes, I just had a conversation with a 20-year-old who hates Macs, doesn’t know why, and seriously thought, until I disabused him, that Microsoft invented the GUI).
The only thing missing - which is why iPod is winning handsomely for now - is that there's nothing 'good enough' out there.
But there will be. Microsoft will provide it. We will shun it, scorn it, diss it.
But it will succeed. Ultimately.
Reader Comments
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Comments do not necessary reflect opinions of Insanely Great Mac
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Posted by Guest Poster #1 on 06/01/04 8:27 AM Reply to this Comment
it will succeed, yes, if making money is success
to me success in a product is class, which i happen to pay attention to and in doing so am surrounded by quality stuff, it's a choice anyone can make, but you have to care
if in the end apple has all the customers who care about quality, they will have won in my opinion
and i don't care for people who don't care... i'll just happily watch them buy whatever cheaper things they want, it will nicely contrast with my setup
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Posted by Guest Poster X on 06/01/04 8:34 AM Reply to this Comment
I am not convinced.
Other than desktop OSes and office software for them, Microsoft hasn't really be very successful with anything they touched. Well perhaps the mouse, yes, but think of all the failures that didn't get to dominate despite a huge marketing budget and despite using the desktop licensing approach.
So the question is this. Will the music player market follow the desktop market or will it rather follow the PDA and cell phone markets? You seem to think the former, I tend to think the latter.
- pessimism prevails
Posted by Gloom and doom on 06/01/04 8:39 AM Reply to this Comment
Your article appeals to my pessimistic side. I never underestimate Apple's ability to ignore market forces. I just hope that Jobs 'n company will open iTunes to other players when/if the iPod is finally overwhelmed.
Hardware sales is a good way to generate seed money, then it's lisencing. Apple might actually have a strong enough OSX market in x86-land to exceed hardward sales. Clearly there is much potential for G5/G6, etc., but at what cost is supporting expensive hardwre that ultimately keep you small? That may be Steve's utopian strategy. Clearly having a small user base on proprietary hardware makes the job of engineering products much more rewarding.
I think a better strategy is to use open source (or prevalent) technology as a base to customize and integrate only like Apple can. OSX is on top of open Darwin and it makes a strong case for this model. Sounds like the next power-based processors have a very open architecture. This is good for an open OSX, but potentially more bad news for a closed OSX that cannot run on the next insanely-great hardware platform not developed by Apple.
I think the iPod may ultimately suffer the same fate as the Macintosh, except with the iPod, an niche market will be more difficult to call a success. Now if we get our Home folder on iPod, the iPod will be another Newton that we will love as it dies an untimely death.
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Posted by Guest Poster #3 on 06/01/04 8:53 AM Reply to this Comment
Not that anyone seems to mind that you can only play iTunes tracks on iPods
What's that supposed to mean - did Apple buy the rights to the mp3 format or something? ipod plays mp3s as well as aac so it's hardly a closed format media player
- RE:
Posted by Mike on 06/01/04 9:01 AM
I think what the editor means is that you can only play iTunes Music Store tracks on an iPod since they are in an Apple proprietary AAC format. Of course, there are ways around this.
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Posted by Guest Poster X on 06/01/04 9:30 AM
AAC is not an Apple proprietary format folks. It is an international standard (part of MPEG-4) and was developed by Dolby.
Anybody can license AAC from Dolby and there are other companies who use it, not just Apple.
What is proprietary about the iTMS is the DRM, Fairplay which is Apple's own.
- This is news?
Posted by Mike on 06/01/04 8:57 AM Reply to this Comment
I think a lot of us saw this scenario coming as soon as Apple made the Windows version of iTunes only compatible with the iPod. October of 2003? Back then, an MS Exec commented that this exclusivity would eventually hurt iPod sales. If MS wants a market, they will take it even if it means losing money on the product they're trying to promote.
- RE: This is news?
Posted by Guest Poster #0 on 06/01/04 10:13 AM
Sure - is that why the xbox is selling so abysmally in Europe in spite of repeted specials and price cuts? Computer users may be used to inferior products like Windoze but you wouldn't want those in your entertainment or appliance section...
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Posted by Guest Poster #4 on 06/01/04 9:37 AM Reply to this Comment
Well, most people I know who use iPods don't actually use the iTMS, well most of them couldn't, even if they wanted to because I am not in the US and so most people I know are not in the US either. But anyway, I myself and most iPod owners I know, we have fairly large CD collections and we are gradually bringing them all into our iPods. I don't think this is uncommon. In other words, the fact that you cannot listen to songs bought from the iTMS on any other device doesn't really count as an argument against the iPod because the iPod has other ways it can be used.
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Posted by rah on 06/01/04 10:09 AM Reply to this Comment
Does iTMS make much difference to iPod sales? After all, it seems to sell just as well where iTMS isn't available.
- Almost switching
Posted by Guest Poster #4 on 06/01/04 10:11 AM Reply to this Comment
This doom and gloom article almost convinced me to switch except for three little points, namely
1) Wondows built it's original success on another widely used OS called DOS and spread by IBM and others widely before Windows was ever launched, giving it an instant-on major base. That's why they succeeded and other me-too's like BeOS didn't
2) For now Media Center software is so badly running from my own experience I wouldn't even want my electrical razor to run on it
3) The iPod is so cool that no other MP3 out right now or in preview comes even close.
Thus, be just and fear not - for the coming months the iPod may well save Apple's butt. And BTW the coalition MS is having with RIAA might disuade a lot of users from getting on board, especially in Europe - though this is a secondary market at beast, I'm sure. People over here - for now - are mostly outraged that the record companies have delayed the iTunes Europe store for so long... and once that's here it should bring some new wind to the iPods sails over here, even more so once the iPod mini becomes available in numbers...
- One point that shouldn't be overlooked ...
Posted by Guest Poster #4 on 06/01/04 10:44 AM Reply to this Comment
... is the role that corporate IT departments have played in Microsoft's success(?) story. The intertia which has kept Windows in the seat of power has become such an unstoppable force because of the weight of the corporate IT departments. The i-products face no such issue at this point in time and I have a hard time foreseeing a future where they would. The consumer marketplace is far different from the corporate marketplace and I think that more than anyone Steve Jobs unbderstands this.
Mike
- don't forget "IBM compatible" PCs were hundreds to thousands less
Posted by cesman on 06/01/04 10:55 AM Reply to this Comment
People forget how painfully expensive macs used to be (and don't forget that inflation makes $1000 in 1984 a lot more money than $1000 today). So yes, people were willing to go with "good enough" to save thousands, especially when your PC became outdated every 2-3 years and you really had to maximize your "hardware" dollar.
iPod/iTunes/iTMS is completely different. The iPod is $50 to $150 more, iTunes is free and the songs are the same price on every online store.
People aren't dumb. Everyone says the iPod is the best and easy to use. Go to a store, and anyone can tell the iPod looks a whole lot better, and functions really well and is easy to use. Most people are deciding to spend the little bit extra and go with Apple. After they do that and use iTunes and iTMS, there's no going back to Musicmatch, Windows Media Player or Napster.
- cheaper, cheaper, yay!
Posted by Guest Poster #4 on 06/01/04 1:08 PM Reply to this Comment
Well, as a consumer I really hope that this hardware market gets as commoditized as it can, so that premium becomes far cheaper that it is now and file format politics get somewhat diluted. The iPod is mostly good, but in no way is the ultimate implementation. I couldn't care less for online shopping, as even AAC at 128 Kb/s is no good enough.
