Kent Pribbernow
03-02-2004, 05:00 PM
Two back to back trade shows in early February resulted in a plethora of product announcements from nearly every major software and hardware vendor in the industry. The whole ensemble started on Tuesday at MacWorld in San Francisco where Steve Jobs once again donned his black mock turtle neck and faded blue jeans, delivering the annual State of the Union address to Mac aficionados. During his keynote several major revelations were unveiled.<br /><br />The first bombshell of the day came from Microsoft who announced before God and all mankind that it was STILL committed to the Mac platform by unveiling Office 2004 for OSX, due out later this year. Lead product Manager kris Barton showed off the new office suite’s features, several of which are already available in Office 2003 for Windows (like Notebook view in Word). But this version seems to be much more optimized for OSX’s Quartz composition engine. Even more shocking was the statement by Roz Ho (Macintosh Business Unit General Manager) that they are already at work on the NEXT version of Office, beyond the 2004 edition. Needless to say, it wowed the crowd.<br /><!><br />After that, Jobs crept back on stage peddling a new G5 enhanced xServe product line, and made note of Virginia Tech’s PowerMac G5 Cluster setup which is the third fastest supercomputer in the world.<br /><br /><span><b>Impressive iTunes Numbers</b></span><br />Next up..iTunes. Now THIS was impressive. To date, Apple has sold no less than 30 million songs on the iTunes Music Store, which leaves ALL OTHER digital media services in the dust. Neilson Soundscan rates Apple as owning over 70% of the “purchased” online music market, which leaves me wondering how big the “unpurchased” (read: piracy) market is. Still, Apple has every right to gloat over this news. iTunes/iPod is perhaps the greatest success story in the company’s history.<br /><br />To further that success, Jobs announced a partnership with Pepsi to give away more than 100 million legal music tracks with specially marked Pepsi products. While this may sound a little gimmicky, it is a fabulous marketing tool. And it may even get me to switch from Coke to Pepsi! But does anyone else find it ironic that John Skulley came to Apple in the 1980s from Pepsico, and later booted Jobs from Apple? I thought that was a strange twist of fate.<br /><br /><span><b>iLife: Some Good, Some Bad</b></span><br />Moving on…get a life! iLife that is. This is where things start going south. Jobs pulled the curtain back on a new iLife suite with upgraded applications, many of which are only marginally improved, and a whole new category of app called GarageBand (which was on my list of predictions) for amateur musicians and home users to create, mix, edit, and loop audio tracks. Now, I’m not a musician, but this is probably the most exciting product announcement to come out of the whole keynote. This software looks like a KILLER app. Pop rock artist John Mayer stepped out on stage to help Jobs demo the wares, which I thought was rather cool…even though I’m not a fan of his music.<br /><br />Now comes the part where the other shoe drops. ILife apps are no longer free. From now on, customers must purchase the entire suite (applications cannot be purchased separately) for $49. Unless you buy a new Mac, or a copy of Panther, in which case it's "free". Yeah, right. Apple is really shooting itself in the foot on this move. The iApps are half the value proposition of the Mac platform as a whole. Not to mention the fact this will create product confusion among customers. For example, if I purchase the iLife suite right now, am I entitled to further updates for free? Or do I have to pay for yet another upgrade every few months? Not a smart decision on Apple’s part, in my opinion. But I guess they have to get their revenues wherever…and whenever they can.<br /><br />After that blow to the gut, Jobs played a promo video for his captive audience highlighting the new iLife suite. Apple is calling this ”Microsoft Office for the rest of your life”, which shows that Apple and Microsoft have obviously been talking behind closed doors about their future “partnership”. The video was exceptionally lame. Let me just say that I don’t know who this Ian Robinson character is, but Apple needs to find another spokesperson. He comes off as very irritating. There were of course the usual celebrity endorsements. I thought Elijah Wood (Frodo from Lord of the Rings) gave an Emmy Winning performance in the video. He did a fabulous job of pretending to be blown away by the “new” iPhoto software, with his doe-eyed expressions. Shock and awe. When Robinson demonstrated the enhanced thumbnail viewer to Elijah, he exclaimed..."It's like your life flashing before your eyes!". Yeah, I kind of had the same reaction, but for different reasons. :roll: I especially found Sheryl Crow’s interview quite humorous, where she glows over GarageBand and how it will help her work on a daily basis, which is obviously exaggerated. For one thing, GarageBand is not a professional studio application, it’s for consumers. And second, she is a known user of DigiDesign’s Pro Tools, which is the industry standard among professional recording artists. Listening to her endorse GarageBand is like Vincent Van Gogh saying that Crayola crayons will improve his artistic skills. Whatever.<br /><br /><b><span>iPod: The Great White Hope?</span></b><br />Next up, the iPod. According to Steve, over 730,000 little white wonders were sold last quarter. Pushing the total number to over 2 million sold. And that’s not including December figures, which haven’t been counted yet. But wait, there’s more. According to market data, iPod is the number one selling model of digital audio device on the market, with over 31%. Now that is impressive! Jobs goes on to say that he wants to double that share by going after the less expensive Flash memory market. So he announces iPod Mini. A tiny Hard drive based (4GB) portable audio player at the astonishingly not so low price of $249. Hmm..what’s wrong with this picture. Well, Jobs hit the size and form factor right on the head. Unfortunately his pricing is a bit off. Flash memory players are CHEAP, which this product clearly is not. IPod Mini should be selling for no more than $199. But it’s clear that Apple priced this little fellow at $250 for a reason, probably in fear that at any lesser price will cannibalize sales of its more lucrative models. That may have been a wise choice, but I can’t help but wonder who will pay $250 for a 4GB iPod when, for just $50 more, they can have the 15GB model? Ah well, time will tell.<br /><br />Finally, Steve Jobs trademark “One more thing” announcement actually came the next day, on Wednesday, when HP announced a strategic alliance with Apple in developing a new digital media device (for HP) based on the iPod. This one caught me by surprise, but I’m afraid for Apple’s sake it may be a necessary move. While Apple will no doubt lose some potential revenues by allowing HP to essentially clone an iPod, it must do WHATEVER is necessary to promote and propagate its AAC audio format. Especially considering that Microsoft’s Windows Media 9 Codec is rapidly growing as a Standard in online content distribution. The real question is whether Apple will allow other major players under their tent as well. Could we be seeing the beginning of a new clone wars? If so, I hope it turns out better for Apple than the last time. In my opinion, what Apple should be doing is opening the iTunes Music Store to other hardware vendors, not develop iPod clones for competitors. Push the AAC format onto every digital device on the market. Trust me, the real war isn't between iPod and other digital media players, it's between AAC and WMA audio formats. And this war is only just beginning, despite iTunes overwhelming lead in the market.<br /><br />Moving on…<br /><br /><span><b>CES: Consumer Gizmo's Galore</b></span><br />Later in the week the Consumer Electronics Show (CES) kicked off in good ole Los Vegas. I ask you, why would reputable companies choose to hold a major convention, to show off their new products, in a town owned and operated by organized crime? That just doesn’t seem right. Speaking of crime…Bill Gates delivered his keynote address using Jay Lenno as his celebrity endorsement (I think he could have chosen better, but hey...anything is better than Regis Philbin), for the new MSN service. Gates also focused on several key Microsoft technologies. Some of which may actually come to market this year. No, really, they might this time. First he announced a transition in product development with Media Center, which will now be spread across a broad array of digital devices, not just expensive Personal Computers. I loved the TV Media Center extension. This may actually succeed where other MS products before it (like WebTV) have fallen flat on their face.<br /><br />The most significant announcement, in my opinion, was the perpetually upcoming (and always stuck in limbo) Portable Media Centers. The big shock: These things may actually come out this year. No, really they will. Why are you looking at me that way? As Gates demonstrated the prototype, I could almost hear Johnny Cash playing “We’ll Meet Again” playing in my head. He claims PMC devices will arrive some time in the second half of 2004, which to me translates to December 24. I won’t be holding my breath, but if the software is as easy to use as the demo, and pricing is low enough, this product could leave MP3 players (like the iPod) coughing on Microsoft’s fumes.<br /><br />That was pretty much it for all the major announcements to come out of both conventions. One thing is certain. Lot’s of cool gadgets are in the pipeline this year. Stay tuned. :wink: