I’ve now had an iPhone 4 for about a month (as you no doubt recall, I queued for a product on launch day for the first time in my life) and my (apparently) free bumper case is in the mail (it’s in Netherlands orange — so much for my plans to bask in reflected glory).
A friend of mine used to joke that if Microsoft ever released a version of Word that actually worked it would go out of business. Word is the very heart of Microsoft’s revenue stream: people buy PCs (and thus Windows) to run Word, not the other way around. People upgrade their PCs to run newer versions of Word they hope might address their current problems with Word. So it follows that once people have a version of Word they’re happy with, Microsoft would be in big trouble.
Word hasn’t become a perfect product, but it’s good enough and Microsoft’s record of improving it is bad enough that no-one feels very compelled to upgrade. But Microsoft isn’t in trouble. The fact is that a lot of computers are out there and they die fairly often, so just based on the need to maintain the fleet, Microsoft will make money for a long, long time, but its days of giddy expansion are behind it. It’s gone from being the phone company of the late 19th century (rapaciously devouring competitors) to being the phone company of the 1950s (fat and happy and utterly dominant).
The iPhone 4 just works. Forget the baloney about its “flawed antenna design” — no-one who has one cares. It has awesome battery life, runs as fast as an iPad, is a better camera than a point-and-shoot (except for lacking optical zoom), feels like a piece of jewellery in your hands, and is rock solid (yeah you can smash one if you drop it on concrete). And here’s the kicker — it’s price competitive with its shoddy plastic rivals that run “free” open source software (developed by an advertising company to spy on its customers and deliver ads to them). All this, and Apple’s margins are almost certainly higher than its rivals’, which means that in a race to the bottom, Apple won’t bother competing.
It follows that Apple is doomed. The original iPhone was a great idea for a device, crippled by lousy battery life and a slow CPU, that became enormously successful in chief because its rivals were so incredibly worse (kind of like Word vs. Wordperfect). Of course, what Apple is doomed to is becoming a fat happy complacent company raking in cash for generations.
I hope the title of my post drives down Apple’s stock price a little bit further, but I’m not holding my breath.