The Silicon Gods

Taboos in worshipping the silicon gods and the orthodox rites & rituals that would make Silicon Gods happy so that they bless our team for coming up with timely deliverables and quality bytes of machine code ...

Monday, October 03, 2005

The ipod phone story ...

So it has been a year since Motorola announced ipod phone and till now even Google earth has not yet got a glimpse of it. People could be accusing Apple for going to Motorola even after the bad experience it had in its early relationship. But I read somewhere altogether a different perspective.

Jobs knows that his designer Jonathan Ive could have come up with a better ipod phone than giving the deal to Motorola. But all Jobs wanted was a news that some phone company is creating an ipod phone. Think deep and there’s no downside for Apple in it. Even if the phone fails, blame is on Motorola.

If Apple created the phone and if it succeeds, there’s a problem for Apple. The cellular network providers would ask Apple to send the songs using their network and would take the bulk of the fee in their already hefty pocket. Apple doesn’t have any power to negotiate as it has no presence in cellular industry.

Now the puzzle solves itself. Now that Motorola is creating an ipod phone (though Jobs is the one who persuaded Motorola to do it), Jobs can strike a good deal with the network providers. All he has to do is threaten that their customers are just going to complain against the providers if the ipod button in the phone is not supported by the providers. Jobs didn’t really need to have the phone but just a news that the phone is underway.

Jobs played the game beautifully and stroke a great deal with Cingular, the network provider. Now Cingular and Motorola are marketing the phone and the bulk of fee would go to Jobs. I wonder how this great strategist lost to gates.