Lessons From The Past: Five Mistakes Apple Isn’t Repeating With The iPod

by Chris Seibold Feb 14, 2006

The iPod is enormously successful, successful enough to spurn lawsuits both frivolous and legally interesting. Even with the unquestioned success of the diminutive digital audio player, pundits are all too happy to point out that the iPod, like the Mac before it, is essentially doomed. The iPod, as most of you know, is a closed system and common wisdom tells us that the more open something is the more acceptance it will gain. Which explains, one supposes, why Linux is quickly pushing Windows into the history books…wait, it isn’t…well skip that part then. Sure, someday the iPod will falter and at some unspecified point in the future another operating system will displace Windows. But, between the present and those eventualities there is a lot of (unfortunate) market domination left.

In any event, despite what the pundits espouse, Apple is not repeating the mistakes they made with the Mac or Lisa. In fact, in a refreshing turn of events, Apple is actively avoiding mistakes of the past. Let us examine five things Apple screwed up in the past that they are getting right with the iPod.

1) Don’t Do Everything Yourself

A big part of what keeps the iPod popular is the accessories. You can go to any Target or Wal-Mart and find veritable cornucopia of iPod add-ons. Sure, some are of more than questionable quality or utility, but the point is that every whim is catered to by yet another iPod accessory maker. Want external speakers for your iPod? Bose has you covered. Need an in wall iPod dock that sends tunes throughout your bathroom? One was featured on some horrible home fix it show last night. Desirous of a case to protect your brand new iPod? Plan to spend some time browsing, there are a million of them.

It would be a simple thing for Apple, with their inside knowledge of where the iPod is headed, to produce the best common accessories for the machine. That move would have stifled third party development and limited the number of iPod accessories available to consumers.

Where They Learned The Lesson:

The Lisa was, at one time, Apple’s end all and be all next generation computer. While the Lisa had a great many flaws, one of the bigger mistakes Apple made with the system was the inclusion of just about every application the vast majority of users would likely need. The inclusion of a spreadsheet, word processor and drawing program meant that there was little incentive for third party developers to come up with any programs for the Lisa. Without fertile ground for development, there was far too little innovative software for the Lisa to generate any widespread interest.

2) Support Common Standards and Backwards Compatibility

The first iPod featured a whopping 5 GB of storage. That was enough for a thousand songs in your pocket. Most people will tell you that 5 GB is still overkill but the surprising thing is that the first generation iPod is still compatible with Apple’s music store, still plays FairPlay DRM’d tunes and, if the battery is still alive, remains a serviceable music player. More importantly, the iPod worked with the music format most people already used: mp3’s.

Where they learned the lesson:

The Mac, contrary to popular opinion, has never been a huge seller in the computer world. The Apple II, on the other hand, was wildly successful. Sadly, Apple failed to build on this popularity. The success of the Apple II was squandered when the Mac (and Lisa) arrived without being compatible with the vast library of Apple II titles. Users wanting to upgrade from an Apple II faced a clear choice between a IBM PC and a Mac with no real incentive to stick with Apple. By providing .mp3 support from the beginning and keeping older iPods useful, Apple avoids that moment in time where users face an obvious choice between the iPod and competing players.

3) Price Sensitivity

The iPod has never been the cheapest .mp3 player or packed with the most bells and whistles. Yet the price has always been somewhat competitive with other players and the price discrepancy has never been large enough that the iPod is removed from consideration on cost alone.

Where they learned the Lesson:

The original Mac cost $500 to build. Jeff Raskin hoped to sell the machine for less than a grand, Steve Jobs wanted to sell the Mac for $1995 but John Sculley, Apple CEO, wanted to pay for a massive publicity blitz and set the price at $2495. Part of the reasoning behind the pricing may have been due to hubris over the profit margin on the Apple II (the Apple II’s highish price meant people saw it as a pro level computer) but it was a big mistake when it came to the Mac. People went into computer stores and saw the Mac. The also saw a PC at half the cost. They may have liked the Mac more on instinct but people really like saving huge wads of cash. The exorbitantly high prices kept the Mac out the hands of a lot of people who just wanted a computer. By keeping the price of the iPod in line with the competition Apple has avoided the sticker shock that drove so many would be Mac buyers to the PC.

4) Go Low End As soon as Possible, Even if it Sucks

The iPod shuffle lacks a lot when compared to the competition. No screen, no radio and no user serviceable battery. These “omissions” are things the competition was convinced would drive people away from the shuffle and straight to their offerings. Why CEO of Creative Sim Wong Hoo had this to say about the shuffle:

“Actually, to me it’s a big let-down: we’re expecting a good fight but they’re coming out with something that’s five generations older. It’s our first generation MuVo One product feature, without display, just have a (shuffle feature). We had that—that’s a four-year-old product. So I think the whole industry will just laugh at it, because the flash people—it’s worse than the cheapest Chinese player. Even the cheap, cheap Chinese brand today has display and has FM. They don’t have this kind of thing, and they expect to come out with a fight; I think it’s a non-starter to begin with.”

A quote which is eerily like what the Mac designers had to say when they saw the first IBM PC.

Where they learned the lesson:

To anyone who knew anything about computers the Mac Classic was a joke. The machine featured an 8 MHz 68000 CPU (everything else was running at at least 16 MHz), no hard drive, a single floppy and 1 MB of RAM. The machine was a pure dog in every respect save one: the price. The Classic retailed at a mere $999. Unsurprisingly to average folks, but surprisingly to rich executives, the Classic sold like crazy to folks who really wanted a Mac even if it was underpowered. The take away lesson from the Classic was: not everyone requires top end hardware to be satisfied.

5) Software Sells Hardware

The iPod didn’t really take off until after iTunes was available for Windows. Some people argue that, as a music management system, iTunes isn’t very good but the majority seem to like Apple’s iTunes software. How many iPods has iTunes sold? It is impossible to say but once users start using iTunes there is strong incentive to go with something fully compatible. To date that leaves a single option: an iPod.

Where they learned the lesson:

The Apple II was moderately successful, but no super killer, until Visicalc came along. VisiCalc, longtime computer hounds will remember, was the first spreadsheet program and gave businesses an actual reason to buy a personal computer. As mentioned earlier Apple forgot the lesson of the Apple II with Lisa. Fortunately, the Mac reminded Apple of the truth about software (and you wonder why Steve won’t shut up about iLife). After the initial rush of early adopters, the Mac was withering like week old Valentines Day roses. A company called Aldus saved the day with their desktop publishing program: PageMaker. Suddenly, anyone with a Laser Printer and a Mac could make a badly written, laid out, and worthless newsletter. Naturally, people were hooked. The lesson of those experiences is obvious: people don’t buy hardware because of a revolutionary feature, be it a mouse or a scroll wheel, people buy hardware to run software.

There you have it, five mistakes that Apple made in the past that they aren’t making with the iPod. As a free bonus here’s one more mistake Apple is making with Macs they won’t make with iPods: telling users the transition to a new chip is no big deal while simultaneously advertising the transition like it is the equivalent of going from steam to an internal combustion engine.


  • > “a badly written, laid out, and worthless newsletter.”

    It seems all the Apple blogs today feel compelled to include a throwaway incendiary sentence!  To me, this is on a par with TUAW’s “who wants to learn a useless foreign language.”

    Perhaps you should have just said that 1986’s newsletter was 2006’s blog, and let the reader work out the subtle insult for themselves…

    mikataur had this to say on Feb 14, 2006 Posts: 19
  • Crikey! Talk about an over-reaction. What Chris says is true - or, more accurately, was true at the time. All of a sudden everybody was a publisher, an editor, a journalist. Today, when I speak to clients about producing a newsletter, a web site or a piece of A/V, I occasionally get a response of “we can get it done cheaper, the boss’s son has some software to do that job”. To which I reply: “Does he have a copy of Word? Yes? Doesn’t make him Shakespeare does it?”
    The tools for a job don’t give people the talent to DO a job. People today believe that because, for example, Garageband makes recording a Podcast easy then they can make one. Cue a lot of shoddy Podcasts which don’t last long.
    Talent will out.
    So, no, I wouldn’t say there was a subtle insult - simply a statement of fact. 1986’s bad newsletter is probably equivalent to 2006’s crappy blog but, frankly, I never read it like that until you made your strange point.

    hitchhiker had this to say on Feb 14, 2006 Posts: 48
  • Your appreciation of the 68000 is very misguided. The 32-bit registers, 32-bit addressing and especially the orthogonality of the instruction set were making it a clear winner at the time, as well as a precursor in modern microprocessor architectures. For several years, Microsoft’s engineers were releasing beautiful applications on the Mac but could not come up with even a half-decent Graphical User Interface on PC, in part because the x86 chips were inefficient and impractical.

    Pierre Saslawsky had this to say on Feb 15, 2006 Posts: 4
  • well Pierre careful reading will reveal that it wasn’t the 68000 that was the problem, rather it was the clock speed. The 68000 was a fantastic chip for the time that far outclassed competitors. In fact it was an engineering masterstroke by Burrell Smith that put the 68000 in a Mac instead of the 6509. Remember that the original Mac came out in 1984, the Mac Classic arrived in the nineties!

    The Mac classic was my first computer. I loved it, wish I still had it, but it was a dog.

    Chris Seibold had this to say on Feb 15, 2006 Posts: 354
  • Very nice article, Chris. But the 5th point and the 1st point seem to contradict each other in a bit.
    Firstly you say, “Apple made a mistake by putting all in-house software onto the Lisa.” and then you say “Apple have correctly realized software is what sells the hardware (and you wonder why Steve Jobs won’t shut up about iLife.)”

    see? ^ smile

    Luke Mildenhall-Ward had this to say on Feb 16, 2006 Posts: 299
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