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Down and Out in Cupertino
With their stock down 35% Apple are looking for new markets. But are they looking hard enough?
Apple are expected to unveil a new corporate iPhone strategy tomorrow. They want to move their PDA into the corporate market. They will likely unveil plans to tighten security on their iPhone and make it compatible with mainstream mail systems. They'll have to establish a beachhead against the dominant device - the RIMM Blackberry.
Apple stock is down 35%. Apple need new sources of growth. Voluntarily limiting themselves - in their worship of the 'whole banana' - to niche markets they're totally dependent on a never ending and never failing stream of new products they can foist on the same customers over and over again.
You don't even need a first year business student to tell you it doesn't work.
But iPod sales are finally slowing. And the iPhone has been nixed by NASA and others as it's just not ready for corporate use. Despite its impressive technology it's positioned - and designed - as a geek tool and not a corporate one.
Already on its release the iPhone raised a number of eyebrows as someone had decided to toss out the endemic security of Unix and run the thing as a Windows clone. Unsurprisingly that didn't cut well with companies burned too often by Microsoft products.
The corporate PDA beachhead is difficult for another reason. CIOs don't want a lot of hardware to support. They'd rather have one device - one thoroughly vetted device - in this context even if it means giving up on the touch screen of the iPhone.
The Blackberry works and that's good enough. It's business as usual.
Juggling Two Markets
Steve Jobs lives under the illusion it's almost impossible to sell to both the consumer and corporate markets simultaneously. Moving right on it's also pointed out that PDA technology is more than the devices themselves. It also involves providing nearly automated security and other updates, integration with other technologies, and the all-important ability to disable and shred a device as soon as it's reported (or suspected) lost.
Right now the lovely iPhone has only YouTube. And nothing approaching the 'Internet never sleeps' 24/7 support centres needed for such a move.
Care to Dance?
You need partners in such an enterprise too. But Apple are infamous for being a nasty partner. You just don't want to dance with them. They're not good at partnering. Period. Some would say their entire corporate mindset is hostile to the idea. Visto CEO Brian Bogosian got a nasty call last summer from his Jobness himself. 'How dare you write ISV software for our device' was the message heard between the expletives. Remember: this is the company that put limericks in their operating system kernel code begging outsiders to not port OS X to other hardware.
And that doesn't exactly enhance one's image as a player. More like an insufferable hopeless fool.
But Apple are also expected to unveil at long last their software development kit for the iPhone which gives indies (sigh) the ability to finally write bona fide applications for the device. Whether it's too little too late remains to be seen. And considering the hoops Apple may set up for indies to actually get their products on the device the reaction may very well be 'why bother'.
Not All Negative
There are positive aspects to the challenge. More than other PDAs the iPhone is a bona fide computer. Its application in the business sector could be profitable and lucrative.
Of course one might also just take a step back and look what's happening from a wider angled perspective. Pundits have said for a long time Apple are dried up in the PDA sector. Already over half their profits are from PDAs and those markets won't go on forever. Pundits have quietly suggested Apple may just have to expand their computer market to stay afloat.
Hal Slocum had a way of putting it. Apple have been betting on being able to put out new 'gadgets' all the time to sell to the same thin demographic. They've needed to put out several products at once in case any of them fail. Should an entire litter of new gadgets bomb they're done for and they know it. Tightrope walking without a net. Investors take note.
A little bit farther to the north along the same Pacific coast sits a freckled dweeb who never had any troubles like this. He may not have any 'whole bananas' but he's got a piece of banana pie everywhere.
He doesn't sell the cables or the routers or most of the hardware but he's got action in nearly every admin vault and office desktop. He doesn't have to worry about his markets drying up.
But he knows how to play and he loves to dance. He's not letting obsessions get in the way of sound business.
Business Week: Apple Go Corporate