Time for Apple to Wage Thermonuclear War
Apple has always stood in contrast to other technology companies in trying to get their customers to look past device specifications and look at what you’re actually trying to accomplish. Back in 2010 when Android phones were advertising their screen sizes, Apple was showing you how you can talk to your mother using FaceTime. You weren’t just buying an electronic device; you were buying time with your mother. How can you put a price on that?
And so it continues. Now in 2016, Android is boasting about their “machine learning” and how their operating system can understand what you say and predict what you want. Never mind that no one is really asking for this. Meanwhile, Apple is trying to get content to be a seamless extension of your device. They’re making deals to get content exclusive to iOS or at an earlier date. They’re developing an ecosystem that allows for easy transition from your living room to your iPad to your iPhone.
Content needs to be important to Apple because it’s important to its customers. Whether you use your iPhone to connect with your mother, your iPad to read magazines, or your Apple TV to watch Stranger Things, it’s all about what you’re trying to do, not the device specs.
Apple needs to keep the full-court press on making access to your favorite content easier on iOS than any other system. I know that Apple is working on improving Siri’s capabilities, but content is arguably more important. After all, music at your fingertips had propelled the iPod Classic to its breakthrough success.
I’m not one of those analysts who thinks that Apple needs to transition into a services company. Content is important because it can help Apple sell more devices. When you’re scooping up 103% of all smartphone profits and your worldwide market share is at 20%, it is no time to shift your focus. That day may come, but it won’t be any time soon.
Apple needs to get access to as much content as possible. And it needs to be exclusive to iOS. You want to wage thermonuclear war on Android? Buy Netflix, Disney, and Nintendo and make the content available only on iOS. Nobody this side of a G8 nation could afford this kind of investment in the future. Except for Apple.
Windows PCs crushed Macs in the nineties, and a big reason was software that was exclusive to Windows. When I was looking to buy my first computer in 1994 everyone said to get a Windows PC because that was where all the software was. People talk a big game about liking one brand or another, but at the end of the day they all go where all the content is.
Apple already sells the best media playback devices in the world, and they have one of the largest online media retailers in iTunes, if not the largest. Getting into content seems like a complementary move for their business somewhat akin to designing their own microprocessors.
Would getting deep into content be a distraction? Maybe a little, but unlike automotive these content companies could be fairly autonomous It’s not like they need help from Apple to run their business.
With the great smartphone land rush over, it’s all about stealing market share now. The payoff for exclusive content could be huge. If Apple could get to 40% market share, they’d pull in an additional $70 billion plus a year in net operating income. To get there, they could acquire Disney, Netflix, and Nintendo at a combined market cap of about $260 billion.
It would take at least four years to achieve an investment payback, definitely a long-term proposition. However, if Apple is anything, they’re patient.
Content needs to be important to Apple because it’s important to its customers. Whether you use your iPhone to connect with your mother, your iPad to read magazines, or your Apple TV to watch Stranger Things, it’s all about what you’re trying to do, not the device specs.
Apple needs to keep the full-court press on making access to your favorite content easier on iOS than any other system. I know that Apple is working on improving Siri’s capabilities, but content is arguably more important. After all, music at your fingertips had propelled the iPod Classic to its breakthrough success.
I’m not one of those analysts who thinks that Apple needs to transition into a services company. Content is important because it can help Apple sell more devices. When you’re scooping up 103% of all smartphone profits and your worldwide market share is at 20%, it is no time to shift your focus. That day may come, but it won’t be any time soon.
Apple needs to get access to as much content as possible. And it needs to be exclusive to iOS. You want to wage thermonuclear war on Android? Buy Netflix, Disney, and Nintendo and make the content available only on iOS. Nobody this side of a G8 nation could afford this kind of investment in the future. Except for Apple.
Windows PCs crushed Macs in the nineties, and a big reason was software that was exclusive to Windows. When I was looking to buy my first computer in 1994 everyone said to get a Windows PC because that was where all the software was. People talk a big game about liking one brand or another, but at the end of the day they all go where all the content is.
Apple already sells the best media playback devices in the world, and they have one of the largest online media retailers in iTunes, if not the largest. Getting into content seems like a complementary move for their business somewhat akin to designing their own microprocessors.
Would getting deep into content be a distraction? Maybe a little, but unlike automotive these content companies could be fairly autonomous It’s not like they need help from Apple to run their business.
With the great smartphone land rush over, it’s all about stealing market share now. The payoff for exclusive content could be huge. If Apple could get to 40% market share, they’d pull in an additional $70 billion plus a year in net operating income. To get there, they could acquire Disney, Netflix, and Nintendo at a combined market cap of about $260 billion.
It would take at least four years to achieve an investment payback, definitely a long-term proposition. However, if Apple is anything, they’re patient.
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