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Apple’s Business Model Advantage

May 14th, 2006 · 1 Comment

WSJ (Walter Mossberg) writes:

In the post-PC era we’re in today, where the focus is on things like music players, game consoles and cellphones, the end-to-end model is the early winner. Tightly linking hardware, software and Web services propelled Apple to a huge success with its iPod. Microsoft, meanwhile, has struggled to make its component model work on these devices and, in a telling sign, is using the Apple end-to-end model itself in its Xbox game-console business. Now, Apple is working on other projects built on the same end-to-end model as the iPod: a media-playing cellphone and a home-media hub.

The jury is still out on whether the end-to-end model will prevail in the long term. Many at Microsoft, and some outside analysts as well, believe the new devices will eventually succumb to the component model, and that Apple’s success with the iPod will fade, just as its early dominance of the PC market did. Apple officials say history won’t repeat itself if the company continues to make great products and avoid the business blunders committed by its past management.

Tags: Management

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