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Tuesday, 01 February 2011 17:19

Apple, it's all down hill from here


If I was holding Apple shares I would be very nervous right now. It has nothing to do with prognostications from Netgear's boss about closed systems and the threat from Android to iPhone and iPad. It has everything to do with what he said about Steve Jobs.

Everybody knows Apple is a great company with great products and great marketing. It's also no secret that Apple suffers from one great weakness, the very same person that has been the key to the company's success - and we all know who that is.

Netgear co-founder and CEO Patrick Lo was way off the mark with his comments in Sydney on Monday about the need for Apple to open up its technology in order to compete with Android. Apple tried that after the departure of Jobs from Apple in 1985 with its Mac clones program and was spectacularly unsuccessful.

At his charismatic on stage performance during Macworld 2007, Jobs made his views clear when he said words to the effect that companies who are serious about making good hardware should also make their own software.

A short time later, when the low priced netbooks market was all the rage, Jobs said that Apple would not know how to make a $500 piece of junk.

Jobs was right on both counts. A key factor behind Apple's success since Jobs returned in 1996 has been its walled garden of tight integration between its hardware and software. Another factor has been the superior quality and innovative nature of its products.

The iPod, iPhone and iPad (not to mention Mac) are as closed as products can get. People love them because they work spectacularly well. They don't give a hoot about whether the systems are closed or open. I suspect the same thing holds true for the myriad of App developers that are successfully making a living off these closed platforms.

Yes Android on the rest of the hardware manufactured by different vendors will compete with Apple and, like Windows on PCs, will probably take a greater market share on smart phones and tablet form factors. However, while Jobs is around, Apple products will be superior because of the quality control and tight integration between hardware and software.

That said, the preceding paragraph contained one key phrase that should strike fear into the hearts of all Apple stakeholders - while Steve Jobs is around.

Patrick Lo has apologised for inferring that Steve Jobs is not much longer for this world. However, anyone with a modicum of sense would know that a man who has recently had a liver transplant and is once again on unspecified extended leave at the very least has serious health issues that could likely force him into early retirement.
Anyone who tries to claim that Apple will carry on business as usual without Steve Jobs will not be taken seriously. Apple obviously has great developers and engineers and good management. However, if the company has another visionary of Jobs' stature that can produce products like the iMac, iPod, iPhone and iPad - all of which happened on Jobs' watch - then it is the world's best kept secret.

Who knows maybe such a person will emerge in coming months. The probability is extremely low and, that being the case, we have quite possibly seen the best of Apple for some time to come.


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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.



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