Yet another masterful Emmy winning performance by Steve Jobs, which met most if not all the expectations of the Mac faithful. GigaOM readers were once again proven right, and Apple launched a movie download service, albeit a watered down version than what most had expected or […]

Yet another masterful Emmy winning performance by Steve Jobs, which met most if not all the expectations of the Mac faithful. GigaOM readers were once again proven right, and Apple launched a movie download service, albeit a watered down version than what most had expected or imagined. (I was wrong, in betting that new widescreen video iPod, which I guess will be unveiled in the next Macworld Show in San Francisco.)

But more than the new products, what was amazing is the increasing similarity in Bill Gates 1.0 and Steve Jobs 2.0. (I speak metaphorically – Bill Gates represents his awesome money machine, Microsoft, and Steve Jobs is the new money machine.) Before the Macheads skin me alive, and Windows zealots call me biased, please let me say, it is a compliment of sorts for the two titans of computing.

So why is Steve Jobs is Bill Gates 2.0?

The anti-DRM crusaders see Steve Jobs (because of iTunes) as the antichrist, just like anti-monopolist people saw Bill “Microsoft” Gates as devil incarnate. (Okay, that’s just a warm up pitch.)

Bill Gates learned early on that controlling the platform is the key to future profits. Steve Jobs 2.0 gets that very well. The iTunes and iPod control of the digital media/convergence markets is quit akin to the Windows domination of the PC business. Microsoft knew that the profits were in selling software an applications and not the hardware, and they let everyone else duke it out in the PC market.

The digital media reality is quite the opposite.

Apple knows that after you are done giving out Hollywood/Music industry its cut, pay for infrastructure and distribution, you are left with little in terms of margins. However, you can make a lot of money on iPods, which is one of the main reasons why Jobs is keeping a tight control over the devices. Let me elaborate – when the PC revolution was in full swing, applications such as Microsoft Office and Quicken sold the hardware, and helped establish the platform, Windows.

(We Mac users remember the days when our productivity software cried for help, at a time when there was a developers’ exodus!) In the post-PC, device world, content is what sells the hardware, at least for Apple. More music, more movies, more television means iPod becomes da platform. This photo from Engadget says it best.

The iTV streaming box announcement to me was a Gatesian moment. The device is still in “beta” and is not going to be available for another few months, perhaps longer. Add to this the harsh truth that Steve could only get Disney (like they have a choice) to commit to the iTunes Movie Store; what you see is a Microsoft type strategy of chilling the market with a yet unfinished product, and get everyone scared shitless. The Barons of Redmond used to do it so well, before their empire started resembling the Roman conquests.

And if you wanted more Gates 2.0 comparisons, well the man wore a shirt, a red one on top of that. How un-black turtleneck is that?

Photos courtesy of Engadget/AOL

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  1. iTunes remains, by far, the tightest client (vs. Yahoo, Rhapsody, Napster and WMP/Urge).

    I think Jobs really mis-played this one by going purchase-only. Movies are very different from music. Most people watch a movie once. The video quality is inferior to DVD and you don’t get any DVD extras. Apple will need to offer rentals and/or Netflix-style subscriptions for this to be a hit. However, as long as the competition remains Windows-only, they have no chance either.

    The iTV announcement should not be under-estimated. Granted it’s essentially Video AirPort Express, it signals a strong move into the living/family room. If the iPhone rumors are true, 2007 is going to be another interesting product year for Apple.

  2. The streaming video playback of the event I watched showed him wearing a black shirt, not a red one.

  3. Steve Jobs is actually Bill Gates 1.0, except Apple management forced him out because they thought he was wrong.

    Who’s wrong now, Mr. Sculley? Did you make a good choice back then?

    He was forced out long before he lost the first round to Bill Gates.

    Disagree? Even with that gigantic blow, he’s back and gaining on Bill, and his mid 1980’s platform (NeXT) is the platform that is powering Apple today.

  4. Also, don’t forget that when working with the movie and music moguls (MMM’s?), there’s only going to be so much ability to immediately get what Apple wants. It’s going to take time.

    And yes, Apple is in business for profit, not for altruistic reasons. That shouldn’t surprise anyone.

  5. Michael Markman Tuesday, September 12, 2006

    I have to agree. It’s all in the slide, isn’t it? “Apple is in your pocket.” (with a siphon!)
    Remember the old Microsoft mission, “a computer on every desk.” Apple’s new zeal to conquer rooms, pockets, vehicles, armbands, and more leaves that far in the dust.

  6. Michael Markman Tuesday, September 12, 2006

    I left out “shoes” in my list of opportunities for Apple products.

  7. “So why is Steve Jobs is Bill Gates 2.0?”

  8. because he is taking a page from bill’s strategy book and applying it to a much larger market opportunity.

  9. Emmy performance? a refreshed MP3 player, a 640×480 movie for $14.99, and a $300 wireless device next year? OMG! If that is exciting to a person then honestly I don’t know what to say.

  10. Apple is trying a digital media dominance strategy that makes it the new age sony. Interestingly the hardware itself is made rather commoditized by samsung/HonHai etc. with apple adding and taking all the margins of the value-add.

    However the media download itself while not giving margins will do so eventually. The margins in the iTunes music store are blocked by credit card transaction fees (think about fees to authorize a 1 dollar transaction). The same does not apply to a purchase of a 10 dollar movie.

    The question is will steve allow other companies to allow downloads onto the ipod. Doing so is in his own interest. iTunes is still very price competitive and is under no huge threat by say unbox. iTunes also wins over other download services in sheer cool. Let the people who want choice have it.

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