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Saturday, January 29, 2005

Cringley Initiates iPod - Razor Or The Blade Discussions

Robert Cringley initiates a discussion about the iPod by asking,"Is Apple a hardware or a media company?" . Excerpts:

More than a century ago, King Gillette invented both the safety razor and a new way of marketing consumer goods. Before Gillette, men shaved with straight razors, which required skill to both make and use, and lasted almost forever. Gillette's safety razor was mass-produced and required little skill to make OR use, but couldn't be re-sharpened, so the removable blades had to be discarded when they became dull. His marketing breakthrough was selling the razor handles at little or no profit while making huge profits on the consumable - the blades. This same technique is used today to promote mobile phones and inkjet printers. And it is supposedly behind Apple's success with the iPod music player.
But in the case of Apple, is the iPod a razor or a blade? In other words, is Apple a hardware company or a media company? Cringley while holding the view that Apple is a hardware company also examines the well articulated alternate perspective.

It’s the classical distribution vs production issue rearing its head again. The razor vs blades iPod argument is founded on the premise that distribution is the bottleneck for the media industry.Churn across content devices may become low due to changing technologies at the physical level, there will be a small number of key conduits from content generation to media distribution technology enterprises such as (wireless, fibre, terrestrial waves, cable etc). A similar trend is observed at the enabling software layer owing to evolving frameworks by DRM etc.

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