When Apple introduced the iPod, they entered the music distribution business. They didn't do this because they wanted to, they did it because they had to. In order to sell iPods, they had to make it even easier than we were imagining it could be to get the music we had and the music we would later want, into our iPods. It worked and Apple has been selling a lot of iPods ever since.
Apple saw that the iPod was another thing for people to carry around along with their cell phones. Both have a lot of the same technology inside them and it was just a matter of time before someone combined them. I think they tried partnering with Motorola because the technology for the iPhone just wasn't there yet. The Motorola iPod/cell phone was a failure almost certainly because Apple wasn't running the show. They probably shouldn't have even done it in the first place.
Then they got the technology they needed for iPhone. iPhone was (and for the most part still is) light years ahead of other smartphones. Notice that the Palm Pre and now the Motorola Droid focus not on what makes them cool, but what the iPhone doesn't have. The things they are focusing on will get the attention of only a very small percentage of smartphone shoppers. They both talk about how the their phones run multiple apps at the same time. Not super useful to most smartphone users and the iPhone notification system provides most of what people need from that. They focus on how they have camera with more megapixels. A higher resolution camera in the iPhone would be great but most people are quite happy with what it has now. Heck, Apple has the technology to record video in HD in the iPhone 3G right now, but they don't enable it. Why? Because your battery would run out in no time. Apple knows that battery life is critical and they don't want to get dinged for it. So the reasons are a bit esoteric. They will capture the interest of a few but what Apple has done is greatly expand the market for smartphones. I see a lot of people that have iPhones that would not have had a smartphone before. Still, at some point years from now, everyone that is going to buy an iPhone will have bought one and while they will be able to sell new ones to people that have old ones, the market will be saturated. So what's Apple's next big thing?
Apple got into the music distribution business to sell iPods. They got into the movie/tv show distribution business to sell Apple TVs and iPhones (and iPods that have a nice screen). The Apple TV is probably one of Apple's least successful products because it doesn't add quite enough value to make it insanely great when compared to the DVR from your local cable company. But the first signs of Apple's Next Big Thing are now here. Look at the new iMac. It's got a bigger, more high resolution screen. They say it's higher resolution than HD. And it's 16 x 9 which is the widescreen format for movies and for HDTV. They added a wireless keyboard and mouse standard. And they introduced a new Apple Remote as well that is starting to look a whole lot like a TV remote. Now make the screen even bigger, exchange the stand for a mounting bracket, add something like Apple TV (only way better) and you've got a great new device that would be the center of any high tech living room. Steve Jobs is so well connected in Hollywood, he can make the deals happen to do for movies/TV what Apple has already done for music.
I just moved into a new house this past weekend. I had to reconnect my HDTV, DVD player, A/V Receiver and surround sound speakers. It was a huge hassle. I actually have a diagram I created so I could remember where all the cables connect. And with each device having its own remote, the confusion is so bad that I bought a $300 Harmony Remote (the best remote on the planet by the way) so my children can press one button and play their Wii games. Best Buy has their Geek Squad service just to hook up these systems up for people. It shouldn't be so complex. It took the A/V industry forever just to put the audio and video into a single cable (HDMI). They should have made it all plug and play a long time ago but they didn't. Apple will. They will make all of this so easy and make it do things well beyond what we are imagining today.
I don't know what they will call it but it is coming. It will make existing technology look pathetic and it will seamlessly work with your iPod, iPhone and iMac. And it will help Apple grow and stay insanely profitable.
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