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Published on April 23rd, 2013 | by Gizmodo

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The Only Thing Apple Really Sells – Gizmodo

A recent Wall Street Journal article posits an interesting question: Is Apple a hardware company or a software company? Does it sell iPhones or iClouds? The answer has deep meaning for the analysts who evaluate the company’s worth.

The Only Thing Apple Really SellsA recent Wall Street Journal article posits an interesting question: Is Apple a hardware company or a software company? Does it sell iPhones or iClouds? The answer has deep meaning for the analysts who evaluate the company’s worth. It’s framed as an identity crisis, one with dangerous implications for the most dominant consumer electronics company in the world. There is much gnashing of teeth.

What Apple realized before anybody—and what Amazon, Google, and Microsoft have slowly but aggressively come around to—is that the act of buying a phone or a tablet or a computer isn’t an isolated incident. Gadgets don’t exist on islands. They’re one-way tickets to platform archipelagos, to fiercely guarded fiefdoms where everything works in harmony within walls that are high and strong. And the longer you’re inside, the harder it is to leave.

An iPhone isn’t just an iPhone. It’s access to nearly a million apps that only work on Apple products, to 1.5 million books that you can’t read on a Kindle. It’s a remote for your Apple TV, a place to pluck your iTunes music and movies out of thin air. You don’t buy an iPhone for the A6 processor or for iOS 6. You buy an iPhone for Apple, every bit as much as you buy a Chromebook Pixel for Google or an Xbox for Microsoft.

It’s true—and wonderful—that Android is giving Apple the best competition it’s had in the mobile space since forever. And that Microsoft is pursuing relevance with the dogged patience that Gerard pursued Dr. Richard Kimble. But breaking up with Apple isn’t as easy as divorcing Dell. We’re willing captives of our gadgets of choice these days, and the ransom for leaving—new chargers, new apps, even the time spent just getting set up—is often too damn high.
The Only Thing Apple Really Sells Why do these categorizations—hardware company, software company, neither, both—matter in the real world? They don’t much, day to day, not to you and me. But to Wall Street analysts, pressured to quantify every aspect of a company’s performance and impact, it matters a great deal. Hardware companies are vulnerable to consumer wanderlust and technological leapfrogging; just ask Sony how many Walkmen it’s sold lately. Software companies, though, are nimble, and they have more opportunities for repeat business.

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Gizmodo

Gizmodo is a technology weblog about consumer electronics. It is part of the Gawker Media network run by Nick Denton and is known for its up-to-date coverage of the technology industry, along with topics as broad as design, architecture, space, and science.



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