A look at competing business strategies — platform lock-in versus product design — and a surprising decision largely to grossly underplay the role of digital distribution in the success of either strategy: Gates vs. Jobs: The Rematch
Apple is bucking the trend. The classic Silicon Valley playbook calls for the company to try to turn its hit product into a broader “platform.” And many people argue that Apple should open up both the iPod and iTunes to rivals, so as to establish itself in the center of the digital music world.
BUT Geoff Moore, who articulated the platform strategy in his 1999 book “Crossing the Chasm,” argues that Apple is the rare company that should not follow his advice. Mr. Jobs, he said, has built the company around idiosyncratic, premium-priced products that gain appeal in part from their splendid isolation.
It’s a risky strategy, Mr. Moore contends. “You are only as good as your latest hit,” he said. “You know at some point you will miss a step.”
But he says Apple is better off rolling the dice than trying to try to emulate Microsoft. “It is hard to change the DNA of a company, even if you have a great hand,” he said. “There are some times that you say, ‘there is a great opportunity here, but it is not for us.’ ”
[...] As the underdog in audio technology, Microsoft has marshaled its formidable resources to get others behind its standard. For example, the fee that electronics companies pay to license the Windows Media format is about half of what the owners of MP3 charge. And Microsoft has offered all sorts of engineering help and marketing muscle to electronics companies and music service purveyors in return for their adopting the Windows formats.
[...] For the most part, though, the music world, from the electronics companies to the music labels, has embraced Microsoft. “I never would have believed I would say this, but Microsoft has been easy to work with,” said Ted Cohen, a senior vice president at EMI Recorded Music.
One reason that Microsoft can be so accommodating is that it does not need to make money on media software, as RealNetworks does. It does sell operating systems for telephones, personal digital assistants and television set-top boxes. But all of these are meant first and foremost to encourage people to buy more and more powerful PC’s, each with Windows.
And a tortuous piece of doublethink I found particularly striking from Dell, defending their decision to produce a WMA player:
“Over time, proprietary standards always lose because industry standards always win because you get more for less,” said Michael A. George, the general manager of Dell’s consumer business. Dell has just introduced a 5-gigabyte music player, using the Windows standard, for $199, some $50 less than Apple’s iPod Mini, which has 4 gigabytes.
Slashdot: Gates v. Jobs, continued…