Apple is commonly referred to as the greatest vertically integrated company in the marketplace, and for good reason. They’re both respected and disdained, adored and despised, praised and condemned for the way they control every aspect of the user experience.

Want a computer with Mac OS X? Then you’re gonna have to buy Apple hardware, and if you want software, you’ll most likely use their Mac App Store platform to get what you want (through which Apple takes a 30% cut). If the software is too advanced for the Mac App Store, namely professional creative applications like video editing or music recording you’ll most likely buy the industry standards… in this case, Apple’s Final Cut Studio and Logic Studio.

Want to listen to music on the go? Then you’ll buy an iPod, Apple’s market-dominating product. When you want to actually listen to music, you’ll have to connect your computer to either a Mac or a PC (guess which platform Apple makes sure is a faster, less-bloated experience than the other), and Apple’s iTunes is the necessary portal for syncing content. Speaking of which, Apple completely controls all the content in iTunes, and in order to purchase music through the incredibly easy-to-use iTunes music store, you’ll need to create an Apple ID and enter your credit card information (scary fact — a year ago Apple reported having over 150 million credit cards hooked up to their iTunes store). Oh, and until just recently, any music purchased in the iTunes Store could only be played on Apple devices. So if you bought an iPod and downloaded 300 songs and then realized two years later you wanted a Zune, you’d have to re-purchase all your music in order for it to work

But a glitch arises in Apple’s iPhone. Yes, if you want to use iOS you’ll have to purchase Apple’s hardware to use it. But in order to actually make calls… a network is required. And Apple doesn’t have a network.

Initially, Apple tried to fake vertical integration by siding with one carrier, AT&T. AT&T became synonymous to the iPhone, to the point where it was almost as though it was part of the product, and therefore part of the company. But unfortunately for Apple… AT&T sucked. Bad call quality became synonymous with Apple’s tightly controlled brand image, and Apple didn’t want to be the butt of the joke any longer. So two weeks after the exclusivity agreement expired, Apple brought the iPhone to Verizon. Hooray! No more being ridiculed in the public!

But now a new problem arises. Before, AT&T wasn’t allowed to advertise the iPhone. That was Apple’s job for a reason… they’re the best at it. But now that there are two carrier options available, it seems as part of the agreement both are allowed to advertise the iPhone. This is a first in the world of Apple advertisement… the same product being marketed by three different companies. But more importantly, since AT&T and Verizon are at war, they’re both concerned with pointing out the flaws in the other. So for the first time, the flaws of an Apple product are being publicly proclaimed and promoted by an Apple-affiliated company.

Verizon’s exudes smugness with their ever ubiquitous “Can you hear me now” guy making a comeback. The point of the commercial? Until now, the iPhone has been unusable as a phone. And unless you choose Verizon, you’ll still be unable to make and hold phone calls.

AT&T takes a different approach by presenting a real world scenario. In short, they promote how you can use the iPhone to surf the web and talk at the same time. Useful, smart, intelligent. Even genius. But on Verizon’s network you won’t get that. On Verizon, you’re stuck with a not-so-smart smartphone. And unless you choose AT&T, the experience won’t be of the top quality.

The war is clear — AT&T is emphasizing the “i”, Verizon is emphasizing the “Phone.” AT&T’s network will deliver the best data experience… it’s faster, stronger, and more limber. Verizon’s network will deliver the best calling experience… calls are clearer, and won’t drop after minutes of use. It will be fascinating to see the two continue to publicly ridicule the other, and how Apple’s advertisements will handle the conflict in their world of vertical integration.

Murdoch Wants Your iPad

February 2, 2011

Rupert Murdoch… the man, the myth, the legend. Say what you want about him, but nobody can argue that the man is powerful. Today, News Corp announced a new venture called “The Daily”, an iPad-exclusive news delivery service that has been described as the magazine, meets the newspaper, meets the internet, and “the New York Post goes to college.” After months of speculation and anticipation, the application is finally live on the app store.

I’ve had the chance to play around with it for a while now, and I must say… in my personal opinion… they delivered. I’ve been looking for a clean, modern way to have all types of news delivered to me, from the important news, to celebrity Gossip, to Opinion, to Arts & Life, to Sports, and even to Apps & Games. Until now, my go-to application has been the USA Today newspaper application, but this is now at the top of my list.

Simply put, it looks like a magazine. It informs like a newspaper. It updates like the internet. And it feels like the 21st century. And above all, the price is right. 99 cents per week, or 39 dollars per year. A far cry from the New York Times’ outrageous price hopes of 20-30 dollars per month.

The question now is, will this take off? Will people begin to gravitate away from the static-ness of traditional newspapers in favor of live updating, but still appropriately formatted, tech-based content? No matter how you look at it, the answer ultimately will be yes, whether it’s within the next 1-3 years, or the next 10-20 years.

Most importantly, once this happens, what does that mean for the future of news distribution? If one company holds a monopoly over the content being produced, like News Corp. with The Daily, then our source of news would be incredibly influenced by that companies financial influences. The flak that company gets, it’s desire for advertisements, and the interests of it’s higher powers, would completely influence the customers perceptions of truth and reality. It’s a fascinating futuristic scenario, but being able to hold this future in my hand makes it all the more exciting… and scary.

Poll time…

For years, a good portion of Apple’s commercials have been dedicated towards boosting the rep of the hated AT&T. “The Nation’s Most Popular Carrier” was often cited, as was it’s ability to handle both voice and date simultaneously. Apple, despite knowing otherwise, wanted it’s reality distortion field to spread to the realms of AT&T. It was somewhat successful… after all, the iPhone’s done pretty well in the past few years if I might say so myself. But the consensus was that this wasn’t because of AT&T, but in spite of AT&T. Voice and data be damned. Not even Apple could boost AT&T’s rep.

At the same time Apple was airing it’s pro AT&T ads, Verizon was stuck in a position where they had to convince customers that buying their second-rate phones with their superior network was a better experience than buying the best phone with a second-rate network. Their initial strategy was to bring AT&T’s reputation down so low that even Apple couldn’t sell phones on it’s network.. So they introduced a campaign called “There’s a Map for That”, using Apple’s trademark slogan “There’s an App for That” to point out the disadvantages of AT&T’s network.

Millions of sold iPhones later, they realized that customers would tough out a sub-par network for the best phone. So now what? Simple… bring down the phone. They introduced parody commercials dedicated to highlighting the inefficiencies of Apple’s popular product.

Once again, they failed at bringing down the iPhone. So if you can’t beat ’em, join ’em, right?

Right.

Now Apple has no need to promote AT&T’s network anymore… they have the best of both worlds. The customer no longer has to be forced to be on a network they don’t want, they simply have to choose what phone they want. Victory for the consumers! Apple can now sit back, relax, promote their phones, and let the customers decide which carrier they want. What does Apple care? As long as they’re making money on hardware, they could care less who’s buying it. Victory for Apple!

Verizon, after a difficult four years of waiting, and being forced to attack the phone they new all along was the best, is now in a position where they can rightfully praise the product that they’ve wanted all along. So much for the iPhone having glaring deficiencies… to them, it’s now the second coming of Jesus Christ. Victory for Verizon!

Poor, poor AT&T.

What’s incredible is that two companies, Verizon and Apple, can completely reverse their public opinions on an issue… and nobody will notice! For years, Verizon adamantly said that the iPhone was useless, unnecessary, even inferior to their own offerings, and now that they have access to it they suddenly are able to pitch it as though the world is changing forever. Apple has always taken a neutral stance, focusing on the phone, but occasionally it would highlight the benefits of AT&T in order to silence the Verizon critics. Now? Apple suddenly loves both carriers, both Verizon and AT&T are great, and no matter where the customer buys their phone, everyone in the Apple universe will be happy.

Do customers notice these things? Do they notice that Verizon has hated the iPhone for years and now treats it like the Arc of the Covenant? Do they notice that Apple has always uplifted AT&T and now puts it on a completely equal level with Verizon? And if they do notice…

Do they care?

 

CLEAR Wireless Internet

The Email

February 2, 2011

About two weeks ago, Steve Jobs sent the following email to his employees which was consequently leaked to all the major news outlets…

Team,

At my request, the board of directors has granted me a medical leave of absence so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company.

I have asked Tim Cook to be responsible for all of Apple’s day to day operations. I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.

I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.

Steve

The language of the email, both what was said and what wasn’t said, must be payed close attention to. You can bet your life this was proof-read a million times and that the wording is extremely deliberate.

I will continue as CEO and be involved in major strategic decisions for the company.

Apple’s way of assuring the stock holders that even though Jobs isn’t present for the little tiny day to day stuff, when it comes to the major things that truly matter, Jobs will be in charge like business as usual. This is probably true, but to what extent will remain unknown.

At my request, the board of directors has granted me a medical leave of absence so I can focus on my health.

Steve Jobs taking a medical leave of absence is nothing new, he’s done it three times before. Yet each time he’s taken a medical leave, it’s been because of a life-threatening illness. He’s been able to conquer it each time, but each new medical leave proves to be more nerve-wracking than the last. Of all the announcements Apple’s made regarding his health issues, this one is the strangest… and unfortunately, the saddest.

I have asked Tim Cook to be responsible for all of Apple’s day to day operations.

Once again, Tim Cook is called upon as the replacement CEO in Steve’s absence. Not Phil Schiller from Marketing. Not Scott Forstall from iOS. But Tim Cook, the Chief Financial Officer. This suggests that the man besides Steve with the most say in the company is the man who ensures that Apple is profitable. While Apple wants us to believe that they are some sort of non-profit that only cares about the interests of the customer, the supreme reality is that they are a business. Completely understandably, making money is Apple’s top priority. The signs all point in the direction of Tim Cook to be Jobs’ replacement when the time comes.

Now Jobs didn’t blatantly say how long he was going to be gone for like he did in past announcements. The last time, he stated in his December announcement that he would return in June. This time, nothing… or so it seems.

I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.

It seems that at the very least Jobs won’t be returning to Apple until 2012. But then why didn’t he say “I’ll be back in January 2012”? Unfortunately, he probably doesn’t know. His health is such an uncertainty at this point that perhaps saying January 2012 is too risky. Expect a Job-less 2011, extended potentially, but not necessarily, well into 2012.

I love Apple so much…

This is the beginning of the line that terrifies me. For one, saying “I love Apple so much” is something you would say if you never expect to see the company again. It sounds like a parting message, a thank you to someone you’ve spent a great deal of time with who you won’t see for a long while. But this is nothing in comparison to how it ended.

…and hope to be back as soon as I can.

This makes me queazy inside. He didn’t say “and will be back as soon as I can.” He said “hope.” He’s not sure if he will return to Apple. And if there’s anything to get from this email, it’s this. Steve Jobs may or may not be dying… we don’t know, and based on his request for privacy, I’m not going to try and find out. That’s his business. But he’s told us what is my business, as a shareholder in a public company…

He might not ever return to Apple.

Apple is an immortal company. It’s stock rose through the economic recession over 300%. Apple is Superman, but the lack of Steve Jobs is it’s kryptonite. Apple timed the announcement extraordinarily in order to avoid a major stock collapse. They announced it on MLK day, when the markets were closed, and while Tuesday afternoon saw a morning stock stop, they announced their holiday quarter earnings in the afternoon… and they were the company’s all time best. At the end of the day, the stock ended up higher than before the Jobs announcement.

While the short term loss was non-existent, the potential long term loss is what needs to be focused on. Steve Jobs is Apple, and Apple is Steve Jobs. The question is, has Apple become Steve Jobs to the point where Jobs doesn’t need to be at the company for it to function properly? Or would a Job-less apple begin to gradually descend into the realms of former tech heavyweights who lost it all, like Sony?

At this point, only time will tell.

The Day of Reckoning

February 2, 2011

There are several Apple rumors that seem to always be present without ever arriving. G5 iMacs. iPhone Copy/Paste. iPhone Multitasking. Beatles on iTunes. Lately Apple has seemed determined to check this list out of existence, and now they have finally given the most nagging item the go ahead. Ladies and gentleman… the Verizon iPhone.

This is something Apple has wanted since the beginning. In fact, Apple approached Verizon before AT&T, yet were turned down because Verizon wanted control of the software experience… they didn’t trust Apple to know how to make good phone software without any prior experience in the mobile phone arena. What they didn’t account for is that Apple essentially invented software as we know it, and that their computer experience would provide them with the necessities to create the first computer-like phone.

Oops.

Verizon turning down the iPhone is the 21st century’s tech equivalent to the trading of Babe Ruth, and for the past 4 years they’ve had to sit patiently and watch AT&T become the world’s largest network exclusively thanks to the iPhone. Yet Verizon, well aware of Apple’s 4 year US exclusive agreement with AT&T, spent that time well by beefing up it’s network, solidifying itself in the eyes of all as the nation’s best wireless network. AT&T’s bad publicity and incapability in major cities such as San Francisco and New York City of supporting the iPhone’s network weight gave it a nasty reputation. In fact, 97% of iPhone customers “Love their iPhones” while 55% cite AT&T as the biggest drawback. Long story short, everyone loves the iPhone and everyone hates AT&T.

Verizon customers are about to snatch these up like hotcakes, there’s no question. The real question is whether or not current iPhone owners on AT&T will feel the need to switch to Verizon… and pay the cancelation fee that goes with it. Verizon is offering several features from the get-go, including unlimited data and wireless tethering for up to 5 devices in order to entice those on the fence.

Tomorrow, these questions will begin to be answered, as the Verizon iPhone will finally be available for pre-order. So my question for you is…