Steve Jobs’ Ultimate Goal: Blank Hardware And Apple Dial Tone

On May 12, 2011, I wrote, Blank Is The New Black.

DCDR: Hardware will be cheap and empty. Everything — the OS, the UI, the software, and your own files — will reside in The Cloud, not locally.

If you’re still scoffing at that, consider the following seven minutes I’ve extracted from Steve Jobs’ Q&A at the 1997 WWDC.

Blank hardware is its ultimate logical end.

People have used this clip as showing iCloud’s birth. Every single one of those people is wrong. iCloud is syncing (which I also said would be crucial to Apple’s strategy back in 2008!). There is no web interface that we’ve seen.

Pay attention to his mention of thin hardware. That’s blank hardware.

What would a world of blank hardware look like? See this brilliant video from Editis and just imagine how cheap and empty those devices will be.

Note that the video starts 47 seconds in — I don’t know why.

Apple has again seen the future and it’s in providing an “Apple Dial Tone,” not a continuation of current hardware schemes.

Do the math.

Which is a better business to be in?

One that has declining prices, margins, and fierce competition — hardware — or one with a yearly fee and pricing tiers that provides all kinds of services and which everyone must have — software?

At one time, you could buy a variety of wired telephones from companies other than the one-time monopoly AT&T. How many companies make wired telephones today?

To see the future of hardware, one only has to look at Nokia, which has been relegated to the deadpool of low-end commodity cellphones. That is what always happens to hardware.

The iPad was introduced at $499, not $999. Yet Apple still makes buckets of money from it, despite shocking every analyst with that low-ball pricing.

But it won’t be very far into the future when an iPad is priced at $199, then $99. And its competitors are $150 and then $50. That’s a business to stay in? No.

Jobs has already said Apple is a software company:

When will everyone finally believe what he said?

The ultimate software is an Apple Dial Tone.

4 Comments

Filed under Apple: The Company

4 responses to “Steve Jobs’ Ultimate Goal: Blank Hardware And Apple Dial Tone

  1. Brett

    Regardless of what long-haired Steve said in the video (which may have made sense when it was recorded ages ago), today’s iCloud is all about syncing not serving. What you create and purchase is yours. iCloud just makes it easy transfer your stuff to whatever device you are currently using. As an added convenience, you can rely on Apple to restore previous purchases to any of your devices.

    If Apple was really into thin clients (or blank hardware as you refer to it), they would be in the forefront of streaming audio services and web apps. But Apple has stubbornly refused to create a music rental service. Instead, they sell music on iTunes as well as allowing you to rip your own CDs. Rather than promoting web apps (like Google), Apple encourages buying and running native apps locally which are faster to launch, provide a richer UI, and work even when offline.

    Apple sells the Time Capsule and includes Time Machine software into every Mac to encourage people maintain their own local backups.

    I think you are imagining a possible future without any real basis. Apple would encounter significant consumer resistance if they removed the ability of users to maintain and backup their purchases and documents locally.

  2. jim

    So is this why Apple licenses Mac OS X to generic PC developers?
    Is this why Apple licenses iOS to smartphone developers?

    They make software to power the hardware that they continue to exclusively produce.

  3. williamh

    Mike says blank hardware is the logical end, not that it’s happening just yet. People (analysts, the public, competitors) have wondered how long Apple could sell hardware with such fat margins. A lot of people are surprised it has lasted even this long. That’s why some people assume Android eventually wins. Android isn’t better, it’s just cheaper and anyone can build the hardware that runs it. Apple might always sell a better piece of blank hardware for a bit more, but in the end, if the cloud is synching all your stuff to whatever you’ve got, Apple’s going to getting their coin on the software end and not on the hardware end. It’s just that hardware is becoming a lot less important.

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