IT Life

Apple's Next Big Thing: Home Entertainment

Sure, the company's on a roll. But does Apple have what it takes to repeat the success of the iPod in this notoriously fragmented venue?
In the content arena, although Apple leads the industry in forging alliances with both audio and video producers, a whole plethora of complications abound once it moves past selling 99-cent audio and $1.99 video downloads via iTunes (see The Complicated Web Of Content Licensing).

"The main reason you haven't seen [an integrated digital entertainment system] yet from Apple is that they haven't been able to design an experience that meets their standards," says Gruber.

The More Things Change

How long will Apple continue on its current winning streak--and will the success of the iPod continue to have a "halo" effect on its other ventures? Although some observers say that the company has changed--and learned from its mistakes--Apple's past management is pretty much its current management, and its core strategy of going it alone to provide consumers with a complete integrated solution--albeit a superior one--hasn't changed.

And there's no guarantee that the iPod will continue in its global domination of the digital music market. "Right now, iPod sales are very strong. However, over time we're going to see hundreds of millions of music phones distributed throughout the world, and this could certainly be a threat to the iPod business down the line," says Rubin.

There's also the competition for talent, where Apple is going up against other industry heavyweights for the best and brightest in design and engineering. "They have the team in place, the best industrial designers on the planet, but they are going to have to work hard to maintain that," says Bajarin. "Microsoft and Google are hiring like crazy, and they need significant talent to do what they are doing.

But there are others who believe Apple has turned things around in a significant way.

"Over the last few years, Apple has managed to totally reinvigorate the cachet of their brand," says Gartenberg. "They've certainly learned how to effectively get the message out to the market. They're pretty much past the beleaguered Apple computer on the desktop."

"I think Jobs is a lot wiser than he was in the early '80s. He's worked professionally in technology longer than the managers of his competitors have been alive, and there's something to be said about a battle-tested commander," says Munster.

Schadler adds that Apple has "defied conventional wisdom" in all sorts of ways and will probably continue to do so. "The main thing is that Apple listens to its customers. It has the voice of the consumer in mind, and it designs for that buyer, and as the only computer company that does that, that makes it unique."

Editor's Choice
Jessica Davis, Senior Editor