Apple has pre-empted the shift in how consumers use their computers and electronic devices, and—by quickly diversifying its portfolio of services and products—Apple has managed to take advantage of these changes to become a bigger and stronger company.
Unlike big music companies like EMI and Sony Music, Apple has played the game from both ends of the table, providing consumers with an easy to use and stylish music player in the form of the iPod, and music publishers with a working, viable channel for music sales through the iTunes Store. It’s difficult to argue with a business model that’s sold more than 2.5 billion songs and 2 million movies.
In effect, the “digital lifestyle” Apple promulgated on the Macintosh in the mid- to late-1990s has come to pass for Windows users as well, and the lessons Apple learned back then put it in a strong position to capitalize on the new markets now. But superior product integration is but one part of the story. What Apple does outstandingly well is not just service new markets; it creates them.
With the iPhone, Apple is stating clearly that a modern computer company cannot simply be a traditional computer company. What worked in 1987 won’t work in 2007. Apple is now worth more than $100 billion—not because the Macintosh sells well, although it does—but because of its portfolio of products and brands.
The iPod, iMac, and likely the iPhone, are seen as fresh, funky, and fashionable. For this reason, Mac users shouldn’t look at the iPhone as a potential rival or risky drain on engineering talent, but as a good sign that Apple is a healthy, forward-looking company not about to make the same mistakes it did again and again in the ‘80s and ‘90s.