The coming of Apple’s very perfect storm

To say that Apple has been successful in recent years is to understate the obvious, and completely ignore what is going on behind the scenes. Apple isn’t just doing well with the Mac, the iPod, the iPhone, and financially. Deliberately, carefully, with great discipline, Apple is preparing a perfect storm.

That was then

Apple built a large following of zealous, devout customers through the 1980s to the mid 1990s by focusing on software that worked seamlessly, more or less, with hardware in a way that users who care about their purchases and computing environment came to love and cherish.

The Apple of the mid-1990s had strayed far from the ideals of the past, nearly going broke, before being resurrected in the second coming of co-founder Steve Jobs in 1997.

This is now

In the past 10 years Apple has slowly been building momentum to re-conquer the hearts and minds of customers in a way first evoked by the Apple brand back in the late 1970s and early 1980s.

Apple stretched the patience of the Mac faithful and built a solid platform for the future around NeXT inspired Mac OS X, Apple’s first small storm which launched in 2001. While Apple had stabilized financially, and the Mac empire became healthy, not much happened until the iPod arrived.

The Second Storm

Apple’s venture into the portable music space was risky but paid off as the iPod soon became the darling music player for Mac users, then quickly adopted by Windows users. Over 150-million Windows users to date.

Not only was the iPod a huge hit, so was the trojan horse created with the iTunes version for Windows, which includs QuickTime. What better way to show Apple’s media superiority than to include QuickTime with every new version of iTunes.

While most of us have read the headlines about the many sure-to-be iPod killers, the iPod reigns supreme, commanding a 70-percent market share to be come the reigning king of portable media players.

Mix financial stability, a vibrant and flexible technology platform, a growing customer base, with a little luck. Apple’s cash began to grow. So did ambition.

The Third Storm

Not only did Apple recognize that the world did not have a good music player, it didn’t have a good way to buy music to put on the player. The combination of iPod for Windows users, and the iTunes Music Store created another storm.

Just five years after the launch of the now-named iTunes Store, Apple sells more music than Best Buy, Amazon, or former industry-leader, Wal-Mart.

The portable music player also plays TV shows, feature length movies, music videos, and commands more than 70-percent market share, in over two dozen countries.

The Fourth Storm

Apple’s online store was a natural way to ship products quickly to users at retail prices, eliminating the middle man. Apple received kudos and awards for the Apple Store online.

Remember that horribly, terribly bad idea to open brick and mortar retail stores? Even the store-within-a-store at CompUSA paled in comparison to Apple’s classy, service oriented stores.

Success? Store after store opened in high traffic malls, perfect palaces to display Apple’s highly valued, chic, and sought after iPods—and the perfect lair for Windows users to taste Apple’s digital nectar.

No U.S. store ever hit $1-billion in sales faster than Apple’s highly profitable retail stores. Slowly, the perfect storm was building.

The Fifth Storm

Why did the iPod remain the market leader despite all comers? Apple didn’t rest on their laurels, so to speak. The iPod was a rapidly moving target. By the time a competitor had a decent product on the market, Apple had a new one, a better one, an improved model.

Apple also recognized the future, and foresaw a battle they could not win. Cell phones could make calls, send messages, store music, play movies, and it would not be long before someone, somewhere, created a worthy competitor to the iPhone that just happened to reside in a cell phone.

The company was not content to stick an iPod into a cell phone, ala Motorola’s much panned ROKR. Apple has been credited with creating the modern-day computing experience, creating the modern-day portable music and media player experience, and decided to do the same for cell phones.

The iPhone was a huge storm even before the product launched, less than one year ago, first in the U.S. then five other countries in Europe. Quickly, the somewhat pricey iPhone became the darling of Smart Phone users, with over 25-percent U.S. market share.

This storm is building up quickly.

The second generation iPhone, predictably, a 3G product with even more features, will be combined with Apple’s iPhone new software development kit to bring customers unheard of applications and utilities to the so-called Mac in the pocket.

The new iPhone will not launch in just a half dozen countries. Telecommunications companies in over 40 countries have announced they plan to sell the iPhone in 2008.

Apple’s stated objective for 2008 is to sell 10-million iPhones, a number which no longer looks implausible. In fact, some call it rather conservative.

The perfect storm

Apple’s Mac market share is growing rapidly while Microsoft stumbles badly with Vista. PC customers, frustrated with XP, are switching to Macs in ever greater numbers.

The iPod reigns supreme among portable music players, and the iTunes Store is the number one digital download location for music, TV shows, movies.

The iPhone, in barely a year, has gained the mindshare necessary to take a commanding share of the smart phone market, and exceed most predictions for sales.

Apple’s retail stores are growing in number yet remain popular visiting and shopping places, despite crowds, because Apple provides on-the-spot service at the Genius Bar.

With nearly $20-billion in the bank, Apple can continue to march into country after country with a complete product line that attracts more customers to a world of ease of use, affordability, dependability, security and a seamless ecosystem unavailable in other stores or products.

It took 10 years of effort, toiling in the bit mines to create product storm after storm, in market after market, but Apple has set the stage for a perfect storm that may well continue to grow for many years.