The last two decades are like night and day for Apple. In the aughts, Apple was kicking butt and taking names. Here in the 2010s, it appears Apple is covering its butt and trying to remember its name. While I believe a lot of this is due to Jobs first designing Apple to be uniquely his and then picking a guy to succeed him that was his polar opposite (Tim Cook was the guy hired to do the stuff Jobs hated and wasn’t good at), I think there is another cause. And that is that the accidental path that Jobs discovered with the iPod finally came to an end.
The iPod Yellow Brick Road
You remember in “The Wizard of Oz” when a tornado picks up Dorothy’s house (and her little dog too) and accidentally deposits her at the start of a yellow brick road? But she also ends up with the magic ruby slippers she’ll need to return to Kansas? The iPod, which started Apple’s rise, was an accident. The technology was originally slated for S3, a company that made MP3 players and DVRs. But the company failed and it instead ended up with Apple. Jobs, however, saw the solution (which included music management) for the opportunity it represented and executed on it brilliantly.
When he saw that smartphones were starting to take away the reason to have an iPod, he approached Motorola, which built the horrid ROKR phone. He thought Motorola would know how to build a good phone, but didn’t realize they were clueless when it came to an iPod. So he took the next-generation iPod (iPod Touch), added phone capability, and continued his walk down the iPod Yellow Brick Road.
Others (Google and Samsung) copied Apple, and its position in the market started to weaken. So Jobs took the latest edition of the iPod and made it bigger: Say hello to the iPad. Once again he continued down the road with something that folks saw was magical (and didn’t see as a huge iPod).
The next step apparently was iTV, which would have been a huge iPod that you hung on the wall and called a TV. But two problems came forward: First, to do a TV, you really have to sort video. While Jobs was convinced Apple could do for video what it did for music, he hated TV personally and really didn’t understand (at least not initially) what a huge mess content is and how rabid the cable companies are about protecting it.
The second problem is that Jobs was really the only one that knew how to walk the iPod Yellow Brick Road, and to everyone else, iTV, much like a big iPod, looked stupid. With his passing, Apple has effectively lost the magic slippers, so it is doubtful they can do a TV. And where else would you take the iPod model if it isn’t TVs?
If Dorothy had lost those magic slippers, the story wouldn’t end well. I think that is why Apple appears to be stalling; not only don’t they have their Dorothy anymore, but they don’t have either the slippers or know where the Yellow Brick Road goes. In short, the magic that allowed the iPod to transform Apple has lost its power, and the person that knew how to use it is gone.
In the end, that is why Apple’s magic is gone. In Silicon Valley, unlike in Oz, Dorothy has died, and he took his magic slippers with him.
Rob Enderle is a principal analyst at the Enderle Group.