You remember the first person who made your heart skip a beat when you were a kid, the first one who made you understand what love feels like? Imagine she becomes a star and you see her again after years of just keeping in touch. After a short time, you realize that funny, sweet, smart beauty has become jaded and haughty in middle age. That’s what I think is happening to Apple.
I devour all the trades for my stock footage business and never has there been a release of an important editing upgrade so disliked as Apple’s new Final Cut X. Even devotees of Final Cut refer to it having “a steep learning curve” (meaning, forget everything you learned using the old system, you’re starting at zilch for an already non-intuitive program). I am not as upset as some of my fellows in the field; I’ve always hated Final Cut and use Adobe Premiere Pro instead. If you know PhotoShop, you can learn Premiere in a matter of hours.
Apple, maybe like your first girl friend, has always been a control freak. It’s an admirable characteristic to have dogged determination and confidence when you are young but when you run things, insisting that you will only play by your rules seems despotic. As Apple entered and fought to dominate media delivery, they first upended the record industry with iTunes. Recording companies reluctantly went along and record stores went out of business; Apple had clearly invented a better way to distribute music and to the victor belongs the spoils. Still, the record companies negotiated a pretty good deal for their split and iTunes (along with YouTube) opened up the record business to any music artist with a new sound. The recording business gatekeepers are gone and that has been a very good thing.
With the introduction of iBooks, Apple seems to be feeling its power. iBooks, unlike Amazon Kindle, is not inclusive or user-friendly to new authors and independent publishing firms. And, rather than continuing to allow established e-book publishers to sell directly through their apps, Apple is now demanding competing e-book retailers (Amazon, Kobo, etc.) to pay 30% of sales to them. It is obvious this is an attempt to make it more difficult for users to buy e-books from anyone other than their iBook store. Amazon is still miles ahead in e-books and has a very friendly and fair relationship with publishers and writers so I think Apple has finally gone to far. Publishers, writers and e-book retailers are not willing to wear the same yoke and pull the Apple cart under the same whip. Rebellion is in the air.
Google has Android. Amazon will soon have a direct competitor to the iPad and, unlike mixed up Microsoft, I predict their tablet will be killer. Amazon and Google are also invading Apple’s wall around music and videos with downloadables that play on more than iDevices. In the tech world, everyone steps on someone else’s territory but Apple used to be frenemies with Amazon and Google. Now that Apple has become Rome, their exclusivity policy is forcing the tribes of Amazon and Google to join up against them.
Apple, I still love you after all these years. You’re still beautiful and the smartest one in the room but you are no longer the sweet girl I fell for when I was young. You’ve become a demanding diva. I’ve seen this before, so maybe it’s just a phase. You’re a star but try to remember it was your charm as much as your smarts that made you successful; so get over yourself or the world will get over you.
Oh, that’s a “don’t buy” for the AAPL. The earnings are great but it already has a market cap close to that of Exxon. I always ask myself “can a stock double from here?” When the answer becomes “no,” I start selling.