/ 26 September 2010

Apple’s weakest link is at its core

One of my children is starting at university this month and it was solemnly and jointly agreed that a) she needed a new laptop and b) that Dad would pay for it. So we headed off to the Apple store.

We were careful to go on a weekday, because bitter experience has taught us that the weekends are a no-go area in that particular establishment, which doubles as a free internet cafe, teenage rendezvous and Facebook updating station. Yet when we arrived, around 11am, the place was heaving, with a queue of people snaking into the street.

I was resigning myself to purchasing online rather than endure a two-hour wait when an Apple salesman approached. “We want to buy a MacBook,” I said, “but don’t have time to wait that long.” “Oh,” he said, “I can get you a computer straight away. The queue is for the iPhone 4.”

After he’d departed to fetch the laptop, I stared at the queue. It was overwhelmingly male in composition, and — if the languages spoken were any guide — made up mostly of people who were not British citizens.

“Wow!” I said to the returning salesman, “it looks as though Apple really underestimated the demand for the iPhone.” He looked at me pityingly. “They’re not buying for themselves,” he said. “They’re buying them to flog back home. I sold four to one guy this morning for £2 400. In cash.”

It turns out that a sim-free 32GB iPhone purchased in the UK for £599 can be effortlessly unloaded in Dubai or Beijing or Abu Dhabi — or any other market where there is rampant wealth and Apple hasn’t yet officially launched the device – for several times the UK price.

While the laptop transaction was going through, I had a good look round the heaving store. It was an amazing sight, thronged with people of all ages — from chirpy young girls gushing over the new iPod range, to teenage boys pompously explaining the merits of onboard video cards to one another, to thirtysomething business people investigating iPads, to baby-boomer parents buying laptops for their kids or iPods for their grandchildren. There was a buzz I haven’t seen in any other retail outlet since Richard Branson launched the first Virgin Megastore way back at the end of — when was it? — the Precambrian era.

Retail phenomenon
This retail phenomenon is the monster that Steve Jobs has unleashed on the world. He has positioned Apple at a pivotal point in a series of exploding markets and he controls the toll gate through which everything flows — the iTunes store. No wonder he is loathed and feared (in equal measure) by the industries — music, movies, cellphones — whose fates he now controls.

At the centre of the Appleverse sits a single, crucial piece of desktop software — iTunes. You can do very little with an Apple device without hooking it up to iTunes. Until now, this has given Apple a key strategic advantage over all other competitors. But, as Britain discovered with the Suez Canal in the 1950s, being unduly dependent on a single strategic asset can also have serious downsides.

The problem is that iTunes is now a pretty ancient piece of software. When it first appeared in 2001 as a reworking of SoundJam, a program Apple bought from a Californian company in 1999, it provided an elegant way of doing just one thing: getting songs from CDs on to your computer’s hard drive. But over the years, more and more functions have been added: first the management of iPods, then the Apple online store. Then iTunes became the conduit for managing one’s iPhone. The latest addition is the Ping social-networking function.

This is what the industry calls “feature creep” on an heroic scale. One seasoned commentator, Wade Roush, reckons that iTunes is now called upon to perform 27 distinct functions — which leads him to call it “the Leaning Tower of Ping”. “Adding a social-networking interface, on top of all of iTunes’ other functions,” he says, “is like grafting another limb to the forehead of an octopus. It’s just too much.”

He’s right. It’s inconceivable that Apple doesn’t know this too. So somewhere in Cupertino there must be a team working on redesigning iTunes from the ground up. And if there isn’t, then perhaps Steve Jobs ought to check out the Wikipedia entry for the Suez crisis. – guardian.co.uk