The "iDecade" - Notes on Apple's 2007 Macworld Conference

At this year's recent MacWorld conference, the annual product unveiling and corporate love fest held each year by Apple Computers, everyone was thinking one thing: where's the phone? How long do we have to wait for the phone? The truth is though, no one was expecting what Apple would deliver: the iPhone, a slickly designed, fully integrated, portable wi-fi online personal computer with a multi-touch screen that can be held in the palm of your hand.

It runs OSX, Apple's most recent operating system, browses the internet, acts as a cellular phone, a digital camera, a video player, an iPod with a memory of up to 8GB, and dozens of other features. Jobs demonstrated the device onstage through a simple touch system with no keyboard, and the audience was genuinely stunned. Apple, a company that has redefined modern design and technological innovation had again outdone itself. Whether or not the sales will be there is another thing (seriously though, the sales will definitely be there).

Retailing for $499-$599 and obtainable exclusively through Cingular, the iPhone will be available for sale in June. Although the true results will be seen when the product goes on the market and sales reports are in, just the idea of this device reveals how technological progress can often be confused with magic. A mere "device," if you can call it that, the iPhone provides consumers with everything that would be available on a Blackberry or other handheld professional communicators owned by businessmen in suits working for anonymous corporations, yet there's something more to it than just features, something beautiful and personal rather that merely an issue of function.

Somehow it's as if this little machine came down from the heavens and Steve Jobs is its prophet. In a case like this, believe the hype. Apple will move 5 million of these units within six months if not twice that amount (probably more).

This was not the only revelation presented. Also available later this year is the Apple TV, a digital extension of the computer system that will finally provide an integration for digitally downloaded media (of course, soon to be available through Apple's iTunes store. Disney's already onboard, Paramount just signed up. Who's next? Everyone else.). The price: a mere $299. It only really exists in theory and it's still a bargain.

A majority of people who only read about these new products wants one and they've never held them in their hands or even seen three dimensional representations. Just the idea is enough. Consumers demand four essential elements to the electronics products that they purchase: style, status, instant gratification, and quality. Apple simultaneously provides all of them.

The other announcements at MacWorld were just as promising: in the last quarter of 2006 Apple shipped more than 21 million iPods, annual sales at Apple's iTunes store were up the fourth consecutive year (every year the service has existed), a new version of Apple's operating system would ship later in 2007, successful Apple Stores had recently opened in 2006 with even more planned for 2007, Apple's stock price was up, profits were up, and, most importantly, Apple's market share was up. Way up. That was the key phrase of the conference: "Up."

Developments like this can often cause someone to become skeptical and question how Apple can possibly continue this line of innovation that has skyrocketed these past few years, disdain the recent popularity of iBooks, iPods, MacBooks, iMacs, and now, the soon-to-be iPhone. Tom Wolfe dubbed the 1970s the "Me Decade" and Jobs has unofficially made this new digital era at the dawn of the 21^st century the "iDecade." Face it: Apple triumphed.

Possibly just a brief anomaly, the company's fortunes could change, but with this track record, "Apple Inc." (as it is now known) has reformatted itself as a bourgeoning media company rather than simply a fringe player in the computer industry. This type of innovation is not a mere novelty.

We can be cynical about developments like this and assume the rug will be pulled out from under them sooner or later, but a much more interesting thing to do is actually analyze how this all happened. How did Apple Computers, which used to control a measly 2-3% of the market, suddenly explode? How did this company excel against all odds in a cruel environment when all odds and bets were against them? Was it the 1984 inspired Mac ad shown during the Superbowl over twenty years ago? The "Think Different" marketing campaign? Was it the innovation to sell computers that were candy-colored, looked like desk lamps, or TV ads with kickass music by the likes of The Rolling Stones, U2, or Bob Dylan? Of course not. It isn't that simple.

Apple's real innovation was creating a vertically integrated company, much like Hollywood back during the studio system. The Hollywood studios owned the talent, screenwriters, and directors, they owned the backlots where the films were shot, owned the film equipment, and owned the theaters where the films were shown. It was a brilliant system and business plan controlled from the top down with every necessary element in place and privately controlled by the studio with no parent company dictating how business would operate, only the studio heads and execs.

Now take a brief look at Apple: it writes the operating system of its computers, Apple manufactures those computers, Apple designs music players that work specifically with their own software, Apple sells the music for those players through its own online store, Apple sells the warranty, Apple designs the web browser, Apple does the maintenance, Apple owns the stores that sell you the computer or iPod, Apple sets the market price, and Apple is its own corporate entity, not a mere subsidiary. It's the studio system all over again and Steve Jobs is Louis B. Mayer. Only this time the computer is the star and you are the director. Apple products enable you whereas Hollywood just provides passive entertainment.

Apple sells its products not simply on sleek design but through technological innovation and extremely clever marketing. Apple is almost like a mindset, a mantra if you will, a way of life (it's laid back, irreverent, and self-deprecating - yet somehow also extremely efficient and fun - the way young professionals or students want to think of themselves). Apple's world and business model was devised decades ago yet everything had only recently begun to merge together because the stars aligned and the North Star is the iPod.

Apple spent $491 billion in 2006 on research and development against $14 billion in revenue. That is more money than Dell Computers spent on research and development with well over twice as much revenue, $49 billion. Apple reinvests money in the company to assure new product lines, frequent software updates, new features and, most importantly: happy, vocal Mac owners that love their new toys making the press swoon and PC owners salivate.

Everything smoothly fits together in Apple's world, whereas in a PC environment it's clunky and difficult to maneuver through. Just watch those witty advertisements currently on TV and the internet with the two comedians playing the Apple and the PC. There's no real product featured, just the idea of one. With a PC, the company that wrote the software didn't manufacture the computer and certainly doesn't provide the maintenance or tech service. Microsoft had a cut and run mentality toward the market and the Zune is a last ditch effort to desperately take over even a tiny fraction of Apple's mp3 player market share (by the way, it took 5 years just come up with the prototype that could compete).

Apple continues to nurture its image, variety of products, and sells it to you with a wisecrack, dancing neon silhouettes, but most of all, through utility. Salesmanship is the key word, accountability another. The market share will continue to grow, perhaps their prices could decline ever so slightly to give them an edge since their sales have increased so dramatically (very important). PCs are guaranteed the business market but look at every college campus or nearby cafe and you will see dozens of glowing little Apple logos radiating that the youth of America has chosen and, as we know, they are brand loyal. Even if they haven't purchased an Apple computer yet, there are still probably thin little white headphones dangling from their ears. This is not a mere fad, this is the future.