Monday, April 23, 2007

Question: Should Microsoft quit the MP3 player market?

Answer: I thought they already did. They’re spending a lot of money, but they’re on a dead end. They always were. They saw the Dip, but instead of embracing it by completely reinventing what it meant to be an MP3 player, they just played it safe and made a piece of me-too.

When you copy something that’s already on the other side of the Dip, you’ve already lost. Microsoft “quit” the MP3 player market when they identified the wrong Dip. They picked the obvious, “safe” one—the one committees of people could live with, but one that is so big and so steep that even Microsoft doesn’t have the money to get through it.

Microsoft has a long history of sticking through Dips, and a long history of quitting dead ends. I have no idea what they’re thinking when it comes to the Zune, but it’s a dead end, through and through.

Question: Should Apple quit the personal computer market?

Answer: Apple has already crossed that Dip, big time. Not the “personal computer Dip” but the Dip of “style-conscious, designer’s, multimedia, student, family computer.” They’re the best in the world at that. They own it. They profit from it. Sure, if Steve hadn’t been arrogant, they could have been best in the world at a much bigger, much juicier market. But they’re not. Once they deal with that—and I think they mostly have—then they can erect a wall behind them, a bigger dip, one that prevents others from following. Over time, personal computers become a profitless commodity while Apple’s market just gets sexier, more fun, and more profitable.

Labels: Apple, iPod, Mac, Microsoft, Zune