10 Questions Apple Must Answer in 2007 -- Revisited

So Apple's had one HELL of a first quarter, haven't they? With tax day nearly upon us, I thought it might be a good idea to look back at how well Apple is answering the issues that I thought were important late in December of last year, especially now that the AppleTV is out in the market and the iPhone has set the world on fire with its hype flames. Or something. So click through -- we'll laugh, we'll cry, and we'll learn something about forecasting. Here, again, are the 10 Questions Apple Must Answer in 2007 -- and how well they're responding.

Technorati Tags: apple, speculation, Steve Jobs

10. Is Apple ready to compete in two new fields (Home Theatre and Mobile Telephony)?

What I said then: For each of these new markets, the question remains: Will Apple come off the way they did in the PC market in the 1990s or the way they have in the digital media player market for the last five years? If Apple succeeds in both these spaces, they're well on their way to being established as the premier consumer electronics company. If they blow it, expect to see Apple called "beleaguered" by the media so fast your head will spin.

What I say now: I'd say yes. AppleTV has only been out for a few weeks, and people are going nuts customizing and hacking it, which is always a really good sign of reception. It would appear that they're ready for the market. The iPhone's feature set and design (which were unknown when I wrote the original post) show that Apple is ready to compete in the phone market, but it will be a long time before we know how well this gamble paid off. Either way, it's clear that Apple's got game in both these fields, and they aren't (yet) bursting under the pressure.

9. Will .Mac survive into 2008?

What I said then: Worst of all, Apple has inextricably linked the latest version of iLife to .Mac, meaning that iWeb is severely hampered without a .Mac subscription, firmly taking iLife from the best bundled suite of free apps around to deceptive loss leader for expensive services. iLife's a perfect comparison, actually. It went from zero to $79, and people kept buying it. That hasn't happened here. I think it's time for Apple to gracefully step away from .Mac and rewrite its iLife applications to work with other hosting solutions. Native Flickr support in iPhoto would be a great way to start.

What I say now: Apple has barely acknowledged that they make computers or software this year, let alone the service side of the equation. I think .Mac might carry on into next year just out of indifference, if nothing else.

8. Has the switch to Intel been successful from a third party software perspective?

What I said then: Given the recent release of a beta Universal Binary version of Adobe Photoshop, this one's actually on its way to being answered in the affirmative. Microsoft still hasn't announced a release schedule for a Universal version of Office, but that's actually less critical. Running Microsoft Word through Rosetta is typically plenty fast for most people. It will be a tremendous vote of confidence and continued success for Apple when Office for Mac Intel ships, but encouraging graphic design firms to upgrade is critical for Apple's workstation market. With Adobe Creative Suite 3 coming in 2007, Apple should continue to own professional creativity hardware for the future.

What I say now: Adobe announced that CS3 will ship this month, and Microsoft has been showing Office 2008 for Intel since January with a second quarter release date. I would say this is a definite affirmative.

7. What should Apple credit for soaring Mac sales?

What I said then: I have a sneaking suspicion that a major contributor to Apple's huge success this year was an artificial dip in demand in late 2005, after the time Apple said they would move all their computers to Intel in 2006. I know lots of Mac users who held out for the MacBook, even though they wanted a new computer much sooner. If Apple's growth in Mac sales doesn't keep up the pace next year, that might be the reason why.

What I say now: I'm an idiot. Apple's growth is sustaining itself. Switching has been its own virtue -- we're now far beyond the window where it's just existing users upgrading to Intel platforms.

6. What's Apple going to do with its new campus in Cupertino?

What I said then: Steve Jobs caused a stir in the Bay Area this spring when he just popped up at a Cupertino City Council meeting to announce that Apple would be building a new local, massive campus in addition to its world headquarters at One Infinite Loop. Little has been announced about the project since then, but it clearly points toward Apple's vision for itself going forward. It's a virtual certainty that they aren't just opening a bunch of new buildings so they have more people to work in their existing businesses. Apple has lots of roads open ahead of it, including phones, broader content management and even business consulting services. As Apple's next businesses go, so go the fortunes of their traditional strengths. For Mac users, the company's overall health is critical to our contentedness with our computers. Let's hope Steve has a great new plan.

What I say now: No new information here. I imagine it will partly depend on what happens next with the AppleTV and iPhone, of course...

5. Is Apple comfortable with Mac OS X as the "Big Tent" operating system?

What I said then: The company could choose to be the Big Tent party of operating systems, providing a safe, crash-proof shell for everyone else's work, but that more than anything else would slow development of native software. This could be disastrous. Apple needs to put a stake in the ground and play up its standards, or embrace all of refugees and truly be the computer for the rest of us. It can't try to be both and neither.

What I say now: Apple hasn't done a thing to stop people from multi-booting or even hacking the AppleTV like crazy. They'll take all comers these days.

4. Is Apple getting complacent with its industrial design?

What I said then: The only significant changes of form or design features of the 2006 macs was the addition of built-in iSights and, in the case of the MacBook, a new keyboard. Other than that, Apple was treading water. I've said for awhile that Apple was deliberately maintaining continuity to older models with the first Intel macs so they could go bolder with the next generation. One transitional generation and one radical reinvention. If they don't do that, they run the risk of falling behind.

What I say now: No matter what else, the iPhone looks really different from existing iPods and other Apple products. It's a thing of astounding beauty, and I'm just hoping to see its elegant good looks start to show up elsewhere in their product line.

3. What more can Apple do with the iPod?

What I said then: For all the talk of the true video iPod, I'm beginning to wonder if the product will be disappointing. If Apple brings out something that is like a normal iPod but with a bigger screen, will you be satisfied? I don't think I will. The iPod's biggest innovations have been in the form of its physical and software interface. I'm not sure that the touchpanes or touchwheels mooted for the device will be enough. To defend its lead, Apple has to go back to its strengths. For instance, I think the iPod has plenty of room to get lighter and thinner, as the MacBook Pro has done for laptops. It also needs to get friendlier to hold and become central to all home entertainment. Work with TV companies to integrate iPod docks to watch shows easily. Do whatever it takes to build on what people know and need and innovate from that perspective. It's easy to fall from the top -- just ask Sony.

What I say now: I think Apple has shown their concern in abundance here, and this is their conclusion: The iPod is already starting to end of life and have created the iPhone to create a platform protected for the future. An iPod with the iPhone interface won't be long in coming. Expect it by the end of the year. I was talking nonsense about that integration of iPod docks into TVs, though, wasn't I?

2. What's Apple up to do with Google?

What I said then: One of the juicier rumors of 2006 was all about what Apple and Google would do together. Eric Schmidt, Google's CEO is on Apple's board, and Mountain View and Cupertino are ridiculously close together. The two companies own customer opinion like no one ever has. What could they do together? I hate to cut this one short, but the answer is everything. Or nothing. Having lived through Taligent, AIM (I like to call it MIA), Pink, Blue and other strategic alliances under Apple, I don't have a lot of faith in their success. Let's keep wishing, though.

What I say now: Looks like mostly cozying up to get cool software on the iPhone. I'll continue to fantasize about something much bigger down the road, of course, but I think we'll continue to see Google produce, wait for it, search-based, ad-supported Web software. Shocking, I know.

1. Can Apple stay successful if Jobs steps down?

What I said then: Apple needs to start demonstrating that they aren't just the wild success of one of the most charismatic gurus in American business history. That can come from Steve, but he needs to do it soon. Apple is clearly capable of succeeding without him, but few in the cognoscenti believe it. While Apple is strong, Steve can start to work towards a more hands-off approach and cultivate a culture of hundreds of gurus instead of the one most believe in at this point. If they do that, Apple will be around until 2184.

What I say now: Nothing's changed. Steve is the brand even more than he was pre-iPhone. Let's just hope he's figuring it out in the background. And for those who have been wondering, I clearly meant 2084 in my original post, which is when Robotron will become an issue.