Disclaimer: As a regular TWIT listener, I'm a Dvorak fan. However, I think that, like a lot of people, this time he has -gone- -too- -far-!
As long as I've been reading about technology and Apple, John Dvorak has served as my reference point for the views of reactionary technocrats everywhere. He doesn't get Apple, he's never gotten Apple, and he tries really hard to convince other people that there's nothing about Apple to get. All he cares about are specifications and explicit features -- the idea that devices with better interfaces are better than cheaper ones has never occured to him.
But even by his own standards, his latest column is well past the deep end. You know that moment in Warner Bros. cartoons where Wile E. Coyote chases after a cloud of dust that he thinks leads to the Road Runner, but he eventually instead runs clear off of a cliff, but it's OK for a little while, he just floats, but then he makes the mistake of looking down and crashes to the cliff floor? Dvorak's only still in mid-air because he hasn't looked down.
Here's his advice to Apple regarding the iPhone: Pull the plug. BEFORE IT EVEN LAUNCHES. I know, I didn't believe it, either. Keep reading for the top 5 reasons Dvorak has such a bizarre perspective.
There are plenty of reasons why the iPod stood out from its competitors: The overall form is attractive. The interface is simple and powerful. The overall ecosystem with iTunes is simpler than competing solutions. I have to say that a lack of advertising never struck me as a critical missing element that was holding Mp3 players back from mainstream success. But that's how Dvorak reads it:
First the MP3 player business was segmented and unfocused with numerous players making a lot of cheap junk and not doing much to market any of it.
Apple does what? Advertise. Gosh, what a concept.
Oh, so that's it! The secret to winning in emerging markets is by spending ad dollars! It's so obvious! That's why the Zune has been able to come in and...oh, never mind. How many years had the iPod been on the market before Apple started doing serious TV advertising for the product? I don't remember TV ads before 2003, by which point the early generations already had a strong foothold.
And besides, you couldn't possibly give credit for the success of the iTunes Music Store to advertising, could you?
Then there was the online music distribution business, again unfocused and out-of-control with little marketing and a lot of incompatible technologies. So Apple comes in with a reasonable solution, links it to the heavily promoted iPod and bingo. A winner.
It advertises on TV, on billboards and on the Internet. Within no time the company takes over the business that would probably still be languishing without Apple.
Thus Apple does what it does best. It produces a jazzy product and promotes it like any good business should do. And in the process manages to get a high margin.
OK, maybe John can. There are so many delusional elements to this paragraph. First, iTMS music is incompatible with other Mp3 players. Clearly, "incompatibility" was not the missing element. While the overall success of iTMS was up in the air, Napster advertised like crazy and made no headway. And the iPod was more than "heavily promoted." It was the market leader. And Apple got there by selling iPods, not giving them away.
So how does all of this mean that the iPhone is doomed? Well, John is under the impression that the mobile phone market is too competitive for Apple. From the sound of it, there might even be players in the business who have tried this "advertising" thing. Even on billboards and the Internet!
Now compare that effort and overlay the mobile handset business. This is not an emerging business. In fact it's gone so far that it's in the process of consolidation with probably two players dominating everything, Nokia Corp. and Motorola Inc.
During this phase of a market margins are incredibly thin so that the small fry cannot compete without losing a lot of money.
As for advertising and expensive marketing this is nothing like Apple has ever stepped into. It's a buzz saw waiting to chop up newbies.
Look out, Apple, it's the buzz saw! The buzz saw of phones that get bundled for free with a one-year service agreement and a small order of fries! This is all patently ridiculous. Apple is not going to compete with "phones." The iPhone is going to sell fewer copies than the cheapest phones on the market. Big deal. The way to make money in a commodity market is to put out a premium, differentiated product and target it to an emerging sector of that market. And that's what Apple has done with the iPhone. They want to own the multimedia phone market, which is unclaimed so far. When the best you're up against is Chocolate LG, it's pretty easy to stand out from the pack. Not to mention, both Motorola and Nokia are up against some real challenges right now.
What Apple risks here is its reputation as a hot company that can do no wrong. If it's smart it will call the iPhone a "reference design" and pass it to some suckers to build with someone else's marketing budget. Then it can wash its hands of any marketplace failures.
There's the way to succeed! Assume failure and let someone else take the blame! Sometimes, business shouldn't just be about mitigating risk, you know. Sometimes, you have to place big bets. It's idiotic to assume Apple took smaller risks when introducing any of its iconic products or that it got here by taking the easy way out. Sometimes, you do things the scary way. And if you do it well enough, you can win. That's what Dvorak doesn't get about Apple. And that's why his writing is so entertaining -- it's technology forecasting by a weatherman who only believes in hurricanes.
(Via Cult of Mac.)