Analysis: Has Apple Lost Its Touch?

Wolfgang Gruener in Products on September 01

Ping: Ping? Seriously?

Apple has finally its own social network. A network that is designed to help you find new music through your friends, to share what you are listening to and what concerts you are going to. It looks a lot like Facebook, most likely with good reason. You don’t need to reinvent the wheel. But why exactly do we need a social network for music discovery? Alright, Apple says there are 160 million iTunes users, which means there is an opportunity to get a social network running from the ground up with a substantial user base. But how many social networks can you really sustain? How much more time is there in a day to justify Ping? Will you drop Facebook or Twitter? Probably not.

iTunes 10

iTunes 10

Aside from the strange name – Microsoft may already be looking into a lawsuit – Ping’s focus is too narrow and it’s a nice to have product, not a must have product. Chatting about music may be something what we like to do, but we do not need an extra social network for that. It would have been a better idea for Apple to create a social network within Facebook as an app to enable users to remain where they anyway are. An expanded Mobile Me could have been another idea. Or a network that extends to the App Store. As of now, it does not take much to see that Apple will have to go back to the drawing board on this one and think about the benefits that will attracts people. Even if Ping runs on every iPhone, iPod and iPad – music and video discovery in a separate social network may be too complex to maintain for users next to their already existing social activities. There is a good chance that Apple simply missed the social network train.

Apple TV: A hobby that isn’t taken seriously

The Apple TV (ATV) was the one more thing device today. Jobs joked it was one more hobby. He admitted that it was not really a big hit and that Apple listened to its users what they wanted. So they came up with a black hockey puck device, that is now focused on rent only content. Apple bets on the fact that users want to rent TV shows for 99 cents a piece and avoid commercials. Jobs said it is a big step for networks and he hopes that more will see the light. Only ABC and Fox content is available initially.

Apple TV 2010

Apple TV 2010

There is a new interface that makes navigation easy and you can access content not just from iTunes, but from Netflix, Flickr, YouTube and Mobile Me. But where exactly is the value? We have Netflix today already on game consoles and on connected TVs. We aren’t so sure, if people will be paying $99 for another device below their TV, and another device they know will cost them extra money every month, in addition to Netflix and in addition to their cable TV subscription. Many people will also prefer watching a TV show with ads, rather than having to pay another 99 cents for TV shows (for which they have paid already on their TV) to drop the commercials. The obvious value just isn’t there.

The disappointing part is that that the ATV is not running iOS and has no local storage capability that would have allowed it to become a small game console that attaches to the App Store. Again, it’s nice to have, but you can easily live without it and Apple has missed a huge opportunity here. In fact, the current ATV should not be a separate box anymore, it should be integrated into a TV – whether it is through a deal Apple reaches with a manufacturer or a TV that Apple builds itself.

To us, this was a rather predictable and disappointing event. Apple may have lost its touch. Or Microsoft got finally around and infiltrated and sabotaged Apple.

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