In typical Jobsian fashion, the shift in focus was not without a master plan. iPods were simply the first step. In recent years, Jobs has spoken about the ‘four pillars’ of the Apple ecosystem – Macs, iPods, iPhones and AppleTV. The vision makes sense. Build all of the key components that we rely on for our digital lifestyle and ensure that they work together in a symbiotic relationship. That way, consumers attracted to one product will get hooked and buy the others in order to enjoy the full benefits of the complete ecosystem. Beyond this, Apple can then become a content provider and build a recurring revenue model for all of the digital content that it sells and rents. The vision is a beautiful one, but as with any ecosystem, it requires a delicate balance among all components and will collapse if even one of the pillars fails to deliver.

Apple fumbled on its first attempt at the AppleTV product but has since improved the offering with AppleTV ‘Take 2’ released during Steve Job’s 2008 MacWorld keynote address. What was the major failing of AppleTV v1? It didn’t function within the ecosystem. Products from the other three pillars were independent entities, fantastic in their own right, which were even better when used in conjunction with other Apple products. AppleTV on the other hand wasn’t much more than a dongle for iTunes which sat in your living room. Downloading movies needed to be done on a computer and then transferred to Apple TV – a cumbersome task at best. This was however remedied with Take 2 when AppleTV became a standalone offering capable of independently downloading content from the Internet.

Apple now has four strong product lines. They have tackled the first challenge of building a digital ecosystem but they’re failing to build symbiotic relationships between the products on two important fronts:

Connectivity – Products in the four pillars can talk to one another but not in a seamless fashion. Connectivity is largely wired and requires conscious end user effort. When releasing the MacBook Air (MBA), Apple argued that the lack of connectivity options offered by the MBA was an appropriate compromise to reduce size given our desire for a wireless lifestyle. Reasonable argument Mr. Jobs. Why then must I plug my iPhone into a computer in order for content to be synchronized? Why do I have to expressly select the content that should be transferred? The iPhone (and iPod) know what I enjoy; after all, they delivered it to me. I want a device that wirelessly synchronizes everything that I desire without my intervention. When I board the plane, I want the latest ‘Best of YouTube’ podcast waiting for me, even though I failed to remember to explicitly download it.

Content – Apple has gained and lost ground on the content front and continues to do so. It suffered a setback when NBC defected from selling TV shows but made a comeback by unexpectedly landing all major studios when launching iTunes movie rentals. While I’m looking for Apple to expand paid content by making nice with the likes of NBC, my desire for content goes beyond that which I need to pay for. I have plenty of content already, but I want better access to it. What content you ask? Well, my outrageous cable bill from Comcast does provide the benefit of approximately 3 billion TV channels which I’ll never have time to watch. Why then isn’t AppleTV also a DVR?!? I’ll tell you why – because Apple fears that I won’t rent TV shows and movies if I can record them from TV. Note to Mr. Jobs: You’ve done a great job of delivering reasonably priced digital content through iTunes. I will therefore gladly continue to pay for the convenience of that content. I have not yet however purchased an AppleTV. Thanks for the price cut and thanks for the additional functionality but if you want me to open my wallet, AppleTVs still needs to play a more symbiotic role in the ecosystem and that means providing all content (paid and free).

Apple is moving in the right direction but building an ecosystem is a challenging task, even for Mr. Jobs. After all, it took Mother Nature a few tries to get it right (see dinosaurs) and even she’s struggling at the moment (see global warming).

Good luck Mr. Jobs. I’m pulling for yoo.

- michael

When the next generation of the iPhone is released, I’ll be one of the supergeeks lining up a midnight to get it right? Actually, I think I’ll sleep in that day. In fact, I might even do the unthinkable and sit on my wallet for a few weeks, or God forbid…months. Why? How could I not want to replicate the nerdgasm enjoyed during my first buying experience? The answer is that my iPhone may be too good. While there are plenty of features that I want to see in the nextgen iPhone, I’m not convinced that any are sufficient to wrestle another $400 out of my wallet only a year after my first payment.

What features can we expect in the nextgen iPhone? There are several and while I want them all, I may be able to wait a while:

3G – This is the most obvious change and certainly the most anticipated one. Now don’t get me wrong, I desperately want to speed up that pathetic AT&T EDGE access, but I do have access, so that’s an improved feature, not a new one.

GPS – Wouldn’t it be great to use your iPhone as a portable navigation tool with real-time directions? Sure would. I travel a fair bit and such functionality would come in handy, but at the moment, I’m able to make do with the nifty cell tower/wi-fi access point triangulation technology added by Apple in firmware update 1.1.3.

Higher Capacity – Bigger is better right? Of course it is. I, like every testosterone fueled creature won’t rest until I can carry every piece of digital content in the known universe in my pocket. However, at the moment, I can still cram 2-3 movie rentals onto my iPhone even after all of the music, photos and podcasts that are already there – certainly more than enough to keep me happy on a cross country flight.

Apple has always been a company which thrives on support from those like myself that suffer from EAD (Early Adopter’s Disease). This time however, I believe that we may have reached a price point that will make even hardcore technogeeks hesitate before reaching for their wallets. Hopefully I’m wrong though as I’d hate to see the creative minds at Apple slow their pace or intentionally limit features in favor of future sales.

- michael

My wife has not traditionally been a video game fan, but that has all changed in the past few months. Video games used to be a stealthy, unspoken hobby in our house. I would play my first person shooters late at night when my wife had gone to bed because I knew that hated the noise and violence. Then last year, ahe asked me if I’d buy her Dance Dance Revolution. What ?!? DDR! In my house! Next to Halo and Gears of War! Not likely. But wait a minute. If I get her a game that she wants, suddenly the XBox 360 in our living room is something that she wants as well. Hmmmm…perhaps this could be a good thing. So, I tempered my testosterone, pulled my cap down low over my brow so as not to be recognized and picked up DDR. Now my wife didn’t fall in love with the game and neither did I, but it revealed something completely unexpected. My wife and I could actually play video games together. This didn’t have to be a ‘guy thing’. This could the centerpiece of an evening at home. It could be our rented movie or board game. All that it took was a game that appealed to groups other than pimple faced 14 year old boys. Who knew?

No one has realized this more than Nintendo. The Wii, despite mediocre graphics, has been a runaway success. Beyond the direct financial success that the Wii has provided for Nintendo, the wiimote, has also generated an entire industry of Wiicessories. Why? The low price tag, inovative motion controller and active gameplay appeals to families. Suddenly, kids are playing games with their parents. Video games are no longer a vice, they’re accepted and encouraged. While Microsoft and Sony battled it out to build the biggest, baddest, most pwerful machines, Nintento quietly went after an entirely new, and much bigger market. Microsoft and Sony have indirectly been able to benefit from this shift as they support content from other companies who were smart enough to see this trend. Guitar Hero and Rockband have become two of the hottest selling games on the market and are available on all major platforms.

Expect the video game industry landscape to change dramatically in the coming years. Next gen consoles are likely not to be video game consoles at all. Rather they will be a hybrid device that offers varied functionality – game play will only be one purpose. Expect partnerships and mergers to abound as those with content look to those with delivery mechanisms in each and every home.

My wife is not a video game fan. She’s a video game addict…and Microsoft couldn’t be happier.

- michael

1. Airplanes got bigger – No more than two people movers with a 90 person capacity were required to fill any aircraft back in 1962 when the airport opened. Today, with aircraft such as the Airbus A380 capable of holding up to 525 people, it would take at least 6 people movers to complete the task. Not so efficient after all.
2. Air traffic got busier – Shockingly, as flying became more economical, more people began to fly (I minored in finance so I know these things). That meant more planes on the tarmac and people movers just became yet another obstacle on an already crowded runway.

As a result, the people movers are no longer used to ferry travelers directly to aircraft. Instead they have been relegated to highly inefficient taxi cabs moving impatient travelers from one terminal to another. Fortunately, my tax dollars are currently being poured into a $2 Billion project to correct this debacle with the rail system that should have been built in the first place.

Like the people movers, Windows Home Server is an ill-conceived piece of technology. Sure, I understand the arguments that must have been made during the planning meetings – “Mr. Gates, people have more crap and they need a spot to store that crap.” Makes sense. Between our illegally downloaded MP3s, pictures of the grandkids and the pr0n passed along by well meaning friends, our hard drives are overflowing. So why will this great idea fail? A few reasons:

1. Simplicity - Windows does not have a strong track record for developing user friendly software. I want a closet to store my crap, not another operating system to manage. What’s next, a personal sysadmin?
2. Cost - The cost of storage in plummeting. Why do I want to spend $600 on yet another desktop computer with 500GB of storage (no doubt 25% will be eaten up by the O/S) when I can spend half that amount on a simple dedicated NAS device with twice the capacity.
3. Form - They’re ugly. Unless you want your house to look a server farm, these are not for you.

Alas, another multi-million dollar project down the tubes. Oh well, I suspect that Microsoft will recover. Perhaps the budget savings can be redirected to the Zune.

- michael