The Official Wirewize Blog

If you’re a Mac and not a PC, you probably already know that Apple has abandoned its own tradeshow and chose not to exhibit at the recent Macworld Expo.  Reasons for the decision were spoken and unspoken, including the health of CEO Steve Jobs, but the official party line was that Apple is no longer only a computer company, it’s a consumer electronics company.  So starting next January, Apple will be a major exhibitor at the Consumer Electronics Show, where it will be watched with extremely wary eyes by the major Japanese and Korean manufacturers.

Considering how much juice Apple and its various products have in today’s market, it’s hard to believe that it was only about ten years ago that the company was pretty much given up for dead.  Its market share of the computing world was frozen at around 3%, mostly ghettoized in publishing and media production.  Its product line was more confused and self-cannibalizing than General Motors – did anyone ever know the difference between a Performa and a Quadra?  Then-market leader Michael Dell said Apple should shut down and give the money back to the shareholders. Sony was rumored to be thinking about buying Apple out altogether, very much on the cheap.

Proof of the power of prayer

Things are, er, slightly different now.  Apple could buy out Dell for cash. Now there are rumors of Apple buying Sony instead of the other way around. Microsoft tries to copy Apple’s look and feel (yet again) by hiring one of their main interface designers to create Vista.  The result is millions of customers clamoring for a return to Windows XP.

It’d be easy to give the iPod’s popularity the credit for all this.  It not only brought in a cash cow, it familiarized many millions of users with the simplicity and elegance of Apple’s operating system.  Even those who would never switch their PC to a Mac swear by their clickwheel, or these days, their Touch. Or their iPhone.

But Apple’s advantage goes much further than the iPod.  It is perfectly positioned to be a winner in the next generation of consumer electronics products.  It excels in areas where the traditional CE market leaders – Panasonic, Samsung et al – are at their weakest, namely interface design and software implementation.

Before you say so what, consider how interchangeable today’s hardware has become.  The old way of establishing “product differentiation” was to make a better widget. Manufacturers would tout that their TVs had a better picture than the competition, or their receiver sounded better.  These days, with so many TVs to choose from (and many of them looking plenty good in the store with an HD feed), consumers choose on price and styling as much as “quality”.  Go into a Best Buy and the AV receivers and speakers aren’t even connected – are you really going to buy one versus the other based on “better” sound?

So what differentiates today’s CE products?  Software and usability, and this is where the traditional market leaders are generally clueless.  Ever try to navigate the setup menu of a Yamaha receiver or a Hitachi TV?  Ever want to do it a second time?

Most receiver OSDs make Atari look good

Imagine that configuring and calibrating your home theater was as easy as it is with Apple TV.  Imagine that finding shows on your DVR from Cablevision, Time-Warner, Adelphia or whoever else was as easy as finding tunes in your iPod.  Imagine having Apple simplicity inside your AV gear – regardless of which brand you buy.

A typical DVR interface from your cable company

Beauty isn't always skin deep

Why did Microsoft’s OS win out over Apple’s back in the 1980s?  Because Bill Gates figured out that it would be better to be a software company and let hardware makers like IBM, Gateway, Compaq and others build the machines while DOS (later Windows) ran them.  Conversely, Apple decided to remain a closed system of hardware and software.  They tried licensing the Apple OS for the proverbial five minutes, but when Steve Jobs returned to the company in the late 1990s, the clone licenses were revoked.

Now the shoe’s squarely on the other foot.  While Microsoft has tried (and tried and tried) to get its operating system into the CE space — witness Windows CE and Windows MCE for just 2 examples – each effort has flown like a lead zeppelin.  At the same time, Apple has so far kept the major CE makers at arm’s length, but the strategy has served to increase interest, not diminish it.

Who’s the next big player in consumer electronics?  Hint: the company won’t be based in Japan, Korea or China.

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