Apple: Selling Ice Cubes to Eskimos

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From the iPod to the iPhone to the iPad, Apple has a nearly perfect track record of re-energizing lackluster product spaces. FaceTime, the company's take on the video phone, is no different.

Apple will become the greatest sales organization in the history of business when it manages to convince the public that it really wants a video phone. It was Apple, after all, that proved that there is indeed a market for MP3 players. Before the iPod came along, the market was unfocused.

By all rights, Sony should have owned the space, but it was Apple's vision of a closed system that was the clincher. In the process of opening up the MP3 player market, Apple also opened up the idea of selling music online, eventually winning over the music industry. It's a remarkable feat that has been overlooked, in light of more recent developments.

The iPod became ridiculously successful, paving the way for the company's next challenge, the iPhone. No one in their right mind (save for those who saw the device in advance) would have predicted a similar level of success for Apple's first smartphone. After all, these types of phones have been around for over a decade, and even moneybags Microsoft couldn't figure out the market. It was moribund.

Once again, Apple changed the model. This time the company turned the smartphone into an app phone and did away with the stylus that everyone was losing all the time. Apple also developed the App Store, another closed system that it could control. It only took a few key strokes that no one else thought of, and then bingo—mega success!

There was only one more space that Microsoft had attempted and failed. More than a decade ago, Bill Gates bragged about how the tablet was going to take over the world in the following three or four years. There was a mini-boom in development, as laptop makers went crazy developing for the space. And then they realized that no one was interested. Within that predicted three year period, the market actually died, except for a couple of niche manufacturers. And then, boom! Here comes the iPad. Apple's tablet was an immediate, runaway success, even after all of the bad market that preceded it.

Apple is doing nothing more than addressing exactly what is wrong with all of the previous initiatives. Microsoft was an obvious target because the company had executed very few of its own original ideas. The company prefers to "embrace and extend" the work of others, but it did have the right ideas. Apple has run out of stagnant Microsoft ideas, unless it decides to challenge Word or some other boring enterprise stuff. So, how about a bigger challenge? How about a video phone?

I first saw a video phone as a little kid. AT&T had some sort of futuristic pavilion at Disneyland, showing off the "Picture Phone." The company claimed it was the phone of the future. It was a clunker. The product was introduced at the 1964 World's Fair. The company expected to sell millions. Ultimately, very few were sold and the product died. Over the years, various companies have resurrected the idea. Again, no traction.

In recent years, video was added as an optional feature on Yahoo and MSN chat, utilizing cheap cameras from companies like Logitech. Skype soon followed suit. After nearly 50 years, the public had warmed up to having some video intrusion in their lives. But no one had the marketing muscle or gumption to re-promote the "Picture Phone" concept. No one until Apple. It's the same fractal: find a languishing idea, rethink it, and then push it with the aid of compelling advertising. Boom. Now everyone's talking about FaceTime.

The irony is that FaceTime is probably the most clunky of Apple's juggernaut ideas, since it requires a Wi-Fi connection to work. Even so, the company is selling a lot of phones, thanks to ads for the feature.

Before I wrap up, I should mention that a key component to the company's success is well orchestrated ad campaigns. It's hard to believe that Microsoft spends three times more money on marketing than Apple. I was stunned when I saw those numbers in Advertising Age. There is generally nothing memorable about the company's ads. Recently, the company tried to confuse people by showing various nudniks who claim to have invented Windows 7. What kind of message is that?

So, what's next for Apple? No one has ever gotten traction for genuine interactive TV. Apple has to be looking at that sometime soon. Just you watch.

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