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Macworld Expo SF 2004: Enter the Musical Trojan Horse

Before last July’s Macworld Expo in New York City, everyone was wondering what sort of a show it would be without a Steve Jobs keynote and without many of the high-profile exhibitors who pulled out. Although there was no debating that there were many fewer exhibitors and attendees, the overall tenor of the show was positive, both from people manning the booths and those folks walking the floor.

That sense of uncertainty was less pointed for this year’s Macworld Expo in San Francisco, though one friend from Seattle decided that he couldn’t justify the cost and time necessary for the trip, writing in email, "Besides, my biggest fear is the show will be such a shadow of its former self that I’ll be sent into a downward nostalgia spiral from which I may never recover. (‘He was found wandering the empty aisles, sobbing quietly, searching in vain for the WordPerfect booth, wearing only a Power Computing vest, a Casady & Greene blinking light, and carrying a Wingz bag.’)"

The good news is that my friend’s worry was unfounded; the bad news is that there’s no question the show was distinctly smaller than in previous years. Most obvious was the reduced floor space. In the old days, Macworld Expo occupied almost all the space in both the South and North halls of Moscone Center. This year, the curtains in the South Hall (which traditionally holds the larger vendors) could have been moved out to accommodate most, if not all, of the North Hall vendors as well. Despite the smaller space, the number of exhibitors, though down from last year, didn’t drop as precipitously. The floor space suffered more than the exhibitor count because many exhibitors opted for small stands in the special interest pavilions in the North Hall (and as usual, they had some of the most interesting products).

The big question remains attendance, and despite the crowded aisles, the general consensus among exhibitors was that traffic was down from last year. We won’t know the real numbers there until IDG World Expo releases them, along with details about how they’ve chosen to count attendees this year. Nevertheless, the mood among attendees was extremely positive, and we saw none of the moroseness that marked the (much larger) Macworld Expos during Apple’s death spiral days of 1996 and 1997. (Unfortunately, Tonya’s impressions of the first Macworld Expo she’s been able to attend in five years were rather limited. In the continuing saga of "Life’s Not Fair," she succumbed to the flu on the second afternoon and has spent the time since then in bed, though she finally recovered enough to brave the flight home today.)

Apple Makes Music — So what was the difference between then and now? Apple’s sense of direction. Apple bought NeXT in 1996 in order to use NeXTstep as the foundation of Mac OS X, but far more valuable than NeXT’s code and engineering talent for Apple’s survival as a company was the addition of Steve Jobs and his vision for what Apple could become. It took some time, but Jobs put Apple back on track, creating innovative products and reestablishing Apple’s role as the computer industry’s design leader. Even the energy from Power Computing’s "Fight Back for the Mac" campaign didn’t amount to much when Apple was in the doldrums.

Now, however, we’re seeing a revitalized Apple that, despite a smaller market share, is once again pushing the industry envelope in technology, design, and focus. That’s why attendees at today’s smaller Macworld Expos tend to be so upbeat and positive. The economy might be weak, causing many companies to question the value of an expensive booth at a trade show, but as long as Apple continues to keep moving forward and other Macintosh developers support that forward momentum, individual attendees will be happy roaming the aisles at Macworld.

What’s interesting about Apple’s recent successes is that many of them are only ancillary to the traditional uses of computers. In particular, with the iPod and the iTunes Music Store, Apple has sidestepped into the music industry, and the release of GarageBand and the iPod mini show that the company plans to keep marching along that path.

Not all Mac users are ecstatic about this direction. Many feel they have no use for an iPod, and don’t buy enough recorded music to care much about the iTunes Music Store. Also, although Steve Jobs claimed that over half of the households in the United States have one person who plays a musical instrument, I can’t but help think that GarageBand’s potential audience is much smaller than the audiences of iTunes, or even the iTunes Music Store. One TidBITS reader wrote to me after the Macworld keynote to say that this is the first time in four years the keynote hasn’t inspired him to buy something from Apple, and another wrote to wonder if Apple would be paying more attention to the traditional publishing market again in the future.

Those Sneaky Greeks — Nevertheless, it’s still worth supporting Apple’s emphasis on the music world, even if it doesn’t seem to benefit you directly, because media attention, revenue, and overall success with the iPod, iTunes Music Store, and even GarageBand will aid Apple’s other efforts, particularly in the longer term. That’s because the iPod and iTunes Music Store are essentially Apple’s Trojan Horse into the Windows world. "Sure," Apple says, "you can use an iPod with your Windows PC, and you can buy music for it from the iTunes Music Store." The iPod and iTunes Music Store are Apple’s foot in the door; Windows users are buying them not because they’re the cheapest, but because they offer the best industrial design, the best user interface, and the best overall user experience. Apple’s happy with selling iPods and songs to Windows users today, but you have to expect that those users will have been infected with the Apple ethos, and when it comes time for their next purchase, a Mac is far more likely to be considered. After all, the Mac has a better industrial design, user interface, and overall user experience too, just like the iPod.

The benefits of this musical Trojan Horse don’t stop there. With the iPod and iTunes Music Store and some of Steve Jobs’s patented Reality Distortion Field making him as close to a rock star as a computer industry CEO can be, Apple has achieved something that may be unique: the company’s products are equally as hip to teenagers and their parents. A kid may have nothing but teenage contempt for her parents’ choice of music, but you don’t see teens avoiding the iPod just because adults like it too. And just look at the Apple Stores for a near-perfect example of adult hip; everything about the stores says they’re patronized only by the most fashionable. I can’t think of another company that has attained such cross-generational coolness, even when their products (such as Sony’s) are used by people of different ages.

Now you have to think really long term – the kids who are lusting after iPods today are the Mac users of tomorrow. Apple may no longer have the stronghold in education they once had, but this emphasis on music makes Apple products desirable to the young, who then grow up to be the next generation of consumers. It’s a brilliant move, and one that only a company with a strong vision for the future, the distant future, could execute. Nothing Apple could do would increase the Mac’s market share significantly in the near term, so Steve Jobs has set the company’s sights a bit further out.

Other Musings — With this realization in mind, other things start to make more sense. Apple’s recent licensing of the iPod to HP, for instance, might seem odd, but if you consider the level to which Apple wants to bring Windows users into the fold for later conversion to Mac users, it’s a big win. That’s especially true because the iPod is iconic; it doesn’t need the Apple logo or be white (HP’s will be light blue) for people to know it’s really an Apple product. The licensing also makes sense from HP’s standpoint, since Apple and HP don’t really compete directly, thus making that alliance a powerful one against the companies HP does worry about, like Dell and Sony (both of whom are trying to take on the iPod and iTunes Music Store with homegrown products).

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Apple’s desire to focus on this musical Trojan Horse also explains why we haven’t seen an Apple-designed cell phone or PDA or tablet computer or television. As Phil Schiller, Apple’s VP of Marketing, said in our press briefing, Apple realized they had a chance to rethink the entire way music was sold, and at the same time invent the next Walkman. That’s changing the world, which remains at the heart of everything Steve Jobs does. Apple could create any given product, but without a clear vision of how the product would both be enough more compelling than the competition and would help the fortunes of Apple’s core products – in short, how it would change the world – it won’t happen.

Lastly, think about the iPod mini. Some have been confused by its $250 price point, only $50 less than the low-end 15 GB iPod. Why not price the iPod mini at $100 so there’s no competition with the iPod? Apple doesn’t like to compete with commodity products, since the only differentiation between manufacturers is on price, but everything that Apple is known for – ease of use and industrial design – adds to the price. Apple could create a $100 MP3 player, but it wouldn’t be enough better than the competition to sell well, and without being better, it wouldn’t help attract customers to Apple’s other products. In the end, the $250 price point makes sense. If you’re thinking about buying a $200 MP3 player with 256 MB of RAM, an extra $50 for 4 GB of storage is an easy upsell. And as far as the choice between the iPod mini and the low-end iPod… Apple doesn’t care which you find more attractive at all, since either way it’s a sale for Apple. Also remember that everyone balked at the original 5 GB iPod’s $400 price tag, which didn’t appear to be a major deterrent to actual sales.


So, with another Macworld Expo under our belts, it’s time to get back to the day-to-day work (or entertainment, depending on your perspective) of watching the Macintosh world, and even if you’re not a music aficionado, I encourage you to keep an eye on the large wooden horse with Apple logo emblazoned on its side that was just wheeled into the center of the computer industry.

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