When will Apple fall?

In the world of technology, it's not if the mighty will fall but when. There are to be sure, a few exceptions to this rule: IBM, Sony, Oracle and a couple handfuls of others to name a few. But it's a small list, and not one is growing by exponential measures.

If you don't think declines possible, look at Microsoft's history.

There was a time when the government and everybody else wanted to break up the big evil Redmond. Bill Gates and company were brilliant. They came up with this idea of having tollbooths on the places where we did most digital commerce. they owned the operating systems on the computers were used and we paid them for that. They owned office productivity software where did all our work and we paid them for that. The almost did it with web browser by wedding Internet Explorer with Windows operating system, but then came along Firefox and Google.

So you say that IBM is well, but there was a time when Big Blue was scheduled to be broken up into little parts just like the original AT&T. Then, a funny thing happened on the way to the disassembly party, IBM got a new CEO who thought better of the idea. Yeah, they sell off some parts, like the PC division. But for the most part company still in tact, but with a higher reliance on high-margin products like services.

My point here is this, if you can't trust Big Blue or big evil to stay at the top of the who can you trust?

I'm not saying that Apple will inevitably go downhill. I hope not. We have three iPhones in my family and I love the iPad. And apple has always been a company that gave consumers what they wanted not what they asked for. But there are no sure bets in technology, so invest in Apple, but make sure you buy little Exxon-Mobile stock as well.

The Upcoming Wireless Patent War

In an odd story that most consumers will bypass this morning comes the news that Apple, RIM and Microsoft recently bought a block of patents from the once Internet darling now defunct Nortel networks. Why should we worry? Well, many are concerned these companies will use the patents to thwart Google Androids attempt to take over the wireless market. Already, more smartphone run on the Android platform than any other smartphone technology.

Remember the company that held RIM hostage with a vague but eventually enforceable patent and the U.S. government had to step RIM from being shut down. Expect more patent suits rather less in wireless space. See here for more background on mobile patents and who is suing who.

I bring this up because we are headed for an era where patents are being used to protect turf in dubious ways that do not benefit the consumer. Usually consumers lose out in these battles as companies try to use patents to block the rise of technology not foster it.

Paying the Piper for Online Music

One thing consequence of moving music to the cloud, fewer of us will own music. That is a fundamental change in how anyone in their post-teen years looks music ownership.

Not too many years ago, though eons in the internet age, most people thought that when they bought an album (or collection of songs), they mostly could do what they pleased with the tunes. Listen to music, make tapes for their friends, lend the album so their friends could make tapes; I think you get the picture.

Then came Napster and digital music. Followed by the RIAA and of course the lawsuits.

There is no need to rehash that drama, except to say that it spawned iTunes and the iPod, which made Apple famously wealthy. For the sake of brevity, I have skipped a few steps, but that's the way it happened.

As a consequence of Napster and iTunes, we no longer needed to own the physical album. When consumers gave away that right, they gave away the right to own the music. So, you can listen to your music, but you can't give it away.

Moreover, it's going to cost more. Apple has already raised prices on its most popular tunes. As the current pre-teen crowd grows older, we will have a generation of kids who have always bought music online. Once they get locked into a service, price increases will follow. Look at Netflix most recent price increase. When you have a monopoly, you get to tell people how much they need to pay the piper.

You don't believe me. Check out this HBR blog: http://blogs.hbr.org/cs/2011/07/why_im_not_going_near_spotify.html