Trojan Horse

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By RodgerRafter
October 17, 2003

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Think of iTunes, iPod, iTMS as a trojan horse.

This is not a new idea. I've seen a few people on this board discussing the topic before, but now the concept is becoming more clear and we're seeing the pieces fall into place.

1. Seeing the iTunes interface on Windows really does mess with your mind. It is a piece of really good, free software that millions of windows users will download, even if they don't have iPods. Once it is there on the machine, the temptation grows daily to buy an iPod, use the iTMS and even eventually buy a Mac. Windows users will become a bit more familiar with the OS X interface as a result of using iTunes. It even forces QuickTime onto windows boxes that wouldn't have downloaded it otherwise.

2. The iPod is a pod. (I think I remember Mr. Herrring stressing this awhile back.) Looking at the 3rd party accessories (flash reader, voice recorder) and Apple's own little software pieces (Games, notes reader, alarm clock, scripts) you get the idea that just about anything is possible as an add on. Cell Phone attachment? PDA attachment? Voice recognition software? Why not? It certainly has the storage space, and if processing power isn't there yet, it will be before long. It's interesting to see the third party Belkin producing the accessories rather than Apple. It may be a key strategy to get a wide range of hardware developers coming up with ideas rather than just Apple. I wonder what the open source community could come up with if Apple provided development tools for iPod software.

3. 25,000,000 AOL users, 100,000,000 Pepsi drinkers. Here's the first glimpse that Apple is willing to do give-aways to compete aggressively for the mass market, as people on this board have wanted. Those 100,000,000 Pepsi downloads will probably cost Apple mucho dinero, but I suspect that Steve sees it as a form of Marketing. Apple will get AAC formatted files onto millions of windows boxes. They'll run fine for people at home, but if they want to take them on the road, they'll need iPods, not Roxios. AOL probably gets a nice commission on sales to their users as well, and Apple may end up taking losses on these sales. Viewed in context with the whole trojan horse strategy, taking a small loss on AOL sales could result in big mindshare gains that would more than pay for themselves down the road.

I've been posting for years that I think Apple has a great business strategy and has the potential to become as big as Dell & Microsoft someday. People have said I'm nuts, but the "incremental growth" strategy has taken some large leaps forward lately (and Microsoft has really been shooting themselves in the foot). The idea of Apple-as-Powerhouse is looking a little less crazy all the time.

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