: Gates vs. Jobs: The Rematch

Nov 14th, 2004, 08:29 AM
"If Apple continues to ride the wave of digital consumer electronics products, it may become the Sony of the 21st century. " - New York Times

Check it out:


Nov 14th, 2004, 08:45 AM
I'm posting it since it needs a sign in. :D
http://graphics8.nytimes.com/images/2004/11/14/business/14music.184.jpg Gates vs. Jobs: The Rematch

THE history of Apple Computer can be told through its advertisements as well as its products. There was, of course, the commercial that introduced the Macintosh. It was broadcast exactly once, during the 1984 Super Bowl, and signaled the company's bid to reclaim leadership in personal computers from I.B.M. and its tiny, little-known software partner, Microsoft.

Late last month, Steven P. Jobs, Apple's chairman, rented an ornate theater here to promote Apple's latest advertisement for its iPod music player - a crisp psychedelic montage of the Irish pop band U2 playing "Vertigo," a song from its next album. Unlike the 1984 commercial, this one is intended to help Apple preserve a big, and growing, lead in the marketplace.

Speaking just after the event, Bono, U2's lead singer, said the band was not charging Apple a penny to be in the ad. (The band says it had turned down as much as $23 million to use its music in other commercials.) In its three-year life, the iPod has achieved such "iconic value," Bono said, that U2 gets as much value as Apple does from the commercial, by promoting its music and the new Red and Black U2 edition of the iPod, for which the band gets royalties.

The iPod, Mr. Jobs boasted at the event, has become the "Walkman of the 21st century." It dominates its market in a way that no Apple product has done in a generation, raising the possibility that the company is becoming more than just a purveyor of computers with high design and low market share. If Apple continues to ride the wave of digital consumer electronics products, it may become the Sony of the 21st century.

For that to happen, however, Mr. Jobs must do what he failed to do last time: prevail over his old nemesis, Bill Gates, who sees entertainment as Microsoft's next great frontier. Microsoft is working hard to make sure that the iPod is less like the Walkman and more like the Betamax, Sony's videocassette format that was defeated in the marketplace by VHS.

A few days after Apple's U2 extravaganza, Mr. Gates, Microsoft's chairman, paced around his office overlooking the rolling hills of suburban Seattle and recalled another advertisement that Apple made 25 years ago. "When I.B.M. came out with their PC, Apple ran an ad saying, "Welcome,' " said Mr. Gates. "They haven't yet run the ad welcoming us into the music business.

"Apple should," he added.

But he isn't holding his breath. Instead, Microsoft is turning up the volume in the portable music business. And Mr. Gates makes no secret that he expects to beat Mr. Jobs in that market as convincingly as he did in personal computers.

In many ways, the story sounds eerily familiar. As was the case in computers, Apple has sprinted ahead in the music market with an innovative product, elegant design and tight links between its hardware and software. Plodding along after it is a vast army, organized by Microsoft, of rivals that may be less skillful than Apple but offer a broader array of options and cheaper prices.

IN music, Microsoft has rallied nearly every other manufacturer - like Dell, Samsung and Rio - to support a new version of Windows Media. That audio standard allows their gadgets to play songs bought from most music service companies, including America Online, Napster and RealNetworks, as well as its own new MSN Music store. Microsoft's campaign slogan for the services and players is "plays for sure."

The iPod cannot play songs from most other stores, and Apple's iTunes store won't sell songs for other players. Mr. Gates argues that consumers ultimately will want more choices. "There's nothing unique about music in terms of, do people want variety of fashion, do people want low price, do they want many distribution channels?" he said. "This story has played out on the PC and worked very well for the choice approach there."

Mr. Jobs rejects the comparison between the music players and computers. The Macintosh had an uphill battle, Apple says, because so many corporate customers already had applications based on Microsoft's operating system that they didn't want to abandon. By contrast, Apple's iTunes Music Store sells pretty much the same songs that the others do, but they cannot be moved onto non-Apple portable devices.

Most important, he points out, Apple's market share has actually increased over the last year, despite increasing competition. "We offer customers choice," he said during a news conference after the U2 event, answering a question about Microsoft's strategy. "They don't like the choices our customers are making."

Indeed, in the third quarter, some two million iPods were sold - more than all of its competitors combined, and more than double the pace of the second quarter. Market analysts and even rivals expect that Apple will sell more of them this Christmas season and continue to dominate the market into next year.

What happens next Christmas and beyond, however, is a matter of considerable debate. Microsoft fans say that other music players will begin to match Apple's features and styling, and with lower prices. They suggest that consumers, meanwhile, will want to buy music from stores other than iTunes.

dycs mxims
Nov 14th, 2004, 08:47 AM
cool article. can't they all just get along?

Nov 14th, 2004, 09:07 AM
I do hope Apple comes out on top.

Can ipods play other music formats, since they can import them into iTunes?

Nov 14th, 2004, 01:02 PM
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Nov 14th, 2004, 01:26 PM
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Nov 14th, 2004, 04:34 PM
Thanks for the link!

Nov 14th, 2004, 07:03 PM
"wrong thread"