Critical Mistakes


The "Wall Street Journal" revealed that Steve Jobs approached Verizon. Wouldn’t you? Verizon Wireless is the kingpin, Cingular’s merger with AT&T might have given that entity a few more subscribers, but that merger was necessitated by the need to compete with the Verizon/Vodafone juggernaut. Verizon uses better technology, CDMA, and has fewer deadspots, partially as a result of this, and has a far superior high speed network, EVDO, dispatched in many locations.

But Verizon believed it didn’t need Apple. Their failure to accurately assess the landscape won’t be fatal, but if they’d made a deal with Jobs, Verizon Wireless would be assured of being the dominant force in wireless in America for years to come. Now?

This iPhone juggernaut is utterly amazing. It’s like a Beatle album. Will the iPhone live up to the hype? Well, there were two negatives. The onscreen typing and the plastic screen. Apple has made a good case that the onscreen typing feature isn’t a detriment, that the iPhone is not for road warriors, but common folk, who just won’t type that much. As for the screen? Yesterday, Apple announced a switch to glass, and battery life so long, it makes you lament your time management with your Treo or Blackberry.

But the road warriors want the iPhone. Did you read today’s WSJ article?

Companies Hang Up on Apple’s iPhone

The beneficiary of all this hype, AT&T. With its inferior network, lousy coverage and shitty customer service. They’ve got an exclusive on the iPhone.

What did they have to give up in return?

Control to Apple.

Usually the providers dictate to the manufacturers. Everything from features to availability to price.

Apple said the iPhone could only be sold by them and AT&T, no Best Buy, no third parties. And that the price would be extravagant. And it wouldn’t support AT&T’s content stores.

But, AT&T would get the extra charge each month for data usage, which can equal the cost of the voice plan ALONE!

Samsung can’t catch up. Neither can Nokia or LG. Motorola? It’s struggling for its life. You see what gives Apple the edge is software. Nobody else has got a reasonable operating system, never mind Mac OS X. Nobody can compete with the iPhone’s functionality/ease of use. The only thing the other handset makers can hope for is that the iPhone just doesn’t work. But as we get closer to launch, it seems that Apple is covering all the bases. And the iPhone being upgradeable, like a computer, software updates will fix glitches, competitors can only pray for a DESIGN FLAW!

And where does this leave Verizon Wireless? With the best network without the hottest handset. And although Verizon has made incredible inroads based on its quality service, the RAZR craze illustrated that the handset is king. Verizon didn’t have that product for a long time, to its detriment.

The best connections? The best coverage? Those aren’t sexy. And, if they were the determining factor, why would anybody even SIGN UP with T-Mobile, which ADMITS it’s got lousy coverage?

But Verizon didn’t want to give up control. They didn’t want Apple to have that much power. They want to build their own content stores. They don’t want sideloading. They want to be king.

But by being arrogant, they just lost the advantage. If AT&T rapidly improves its network, which the exclusive deal with Apple gives them time to accomplish, Verizon will be neutered. Whereas if Verizon had just made a deal with Apple, AT&T never would have recovered, it would continue to be a service that delivered dissatisfaction, that people were defecting from.

I only have one question Verizon… CAN YOU HEAR ME NOW?

I know you can.


Well, I hear Hugh Panero has been neutered.

But it’s too late.

If XM had made a deal with Howard Stern, Sirius would be out of business. Instead, if this merger doesn’t go through, XM is in serious trouble, it could even go bankrupt. Because Sirius has the momentum. Hell, they even get more BLOG HITS!

Sirius launched later. Relying on proprietary chips, as opposed to using off the shelf parts like XM.

Sirius went through three programming regimes, to XM’s stable one.

Sirius has serious reception problems. The moving satellites and brief buffer cause constant dropouts, far exceeding those of XM.

But Sirius has got Howard Stern.

Sure, Howard was handsomely paid. But he DESERVED THE MONEY! Because he saved the service.

Howard was worth more to Sirius than XM, but XM needed to pony up the cash, make the deal, because otherwise the loss was too great.

People signed up for Sirius just for Howard, no other radio personality has that power. And this gave Sirius buzz. And this begat momentum.

XM could have put a stake in Sirius’ heart, but it was too arrogant and too cheap.


I hate to quote "Rolling Stone", but did you see the lead article in the latest issue wherein they go on about the labels being done, history? And everybody, including even Hilary Rosen, says THEY SHOULD HAVE MADE A DEAL WITH NAPSTER! (Page 13 of the June 28th issue, with the Police on the cover, not available on the magazine’s glacially slow Website, illustrating that RS is willing itself towards extinction.)

But the labels wanted control, they didn’t want to give up control. And now they’re a shadow of their former selves, in revenue, in stock price, in impact. It was a classic mistake.

And now that "Rolling Stone" and the mainstream press detail the labels’ plight, it’s a race to the bottom, it’s a death spiral. The labels’ only hope is to make a P2P deal, IMMEDIATELY! Only one problem, the do it yourself and indie spheres have grown in the wake of the majors’ decline. Rather than get these new players on their team, with fair new deals, the labels said business as usual was good, like Verizon said to Apple. Now, with legalized P2P, the majors will no longer have a lock on distribution. True, this would have been the fact back in 2000. But if the labels had opened their accounting services to everyone, made fairer deals, then they could have salvaged MORE OF THE BUSINESS!


Just because you’re on top today, that doesn’t mean you will be tomorrow. You’ve got to plan for tomorrow.

If you see a disruptive technology or product on the horizon, EMBRACE IT, ignore it at your peril.

Look at Yahoo. They couldn’t even see that search was the future, they helped BUILD Google by employing it as their search engine. Lamely believing that the future was entertainment content, and banner ads. Now Google dominates and Yahoo? Well, Terry Semel just lost his job. Which he never should have had, because he knows entertainment, not tech!

The landscape rolls under your wheels ever so quickly these days. You’ve got to prepare for the future.

Suddenly, instead of selling for a premium, RAZRs were $29. Motorola was so busy selling RAZRs that it didn’t develop a 3G strategy. Now, Motorola has its back up against the wall.

The record business was one based on history. Old institutions. Reductions in royalties for breakage when young customers don’t even know what a DISC IS!

The movie companies, worried about exhibitors and Wal-Mart, have no viable online strategy. Trying to protect their old partners, and their old way of doing business, with windows of distribution, they’re going to get slapped in the face.

Did you see that "Sicko" was on YouTube? You can’t show at Cannes and think you can then sit on the movie for over a month without anybody getting ahold of it.

It’s no longer about a run-up in marketing, a controlled marketplace. It’s about making it today and SELLING IT TODAY!! In a land of iPods and TiVos, it’s about immediate gratification. You want what you want NOW!

If you’re on top now, don’t think twice about putting a stake in your competitor’s heart. Pay a premium, give up a bit of control. Because, as detailed above, the tables can turn seemingly INSTANTLY!

Don’t move slowly, don’t kick the tires, move NOW!

MySpace may not last forever, but Fox got it cheap relative to today’s value, and they got all their cash out right away via the Google deal. While MTV pondered the deal, thinking about the long term prospects.

Les Moonves sells CBS radio stations and buys LastFM. BRILLIANT!

Steve Jobs is prepared for the future. Hell, Safari on Windows is about iPhone apps, and selling stuff in the future to AT&T. Only a bozo would think he’s competing with Microsoft.

The Seduction of AT&T: Why did Apple write Safari for Windows? Because their big customer wants it.

Are you prepared for the future?


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