[nobody31415]

You could take everything you just said and apply it to Sony in 1980. Then their founder, Akio Morita, retired with poor health and they diversified into lots of sensible business decisions about owning studios

Then some little computer company in California moved in on their territory and began making beautiful, simple, well made upmarket products.

[chrislomax]

Might I just add, I am not your typical fan boy for Apple. Quite the opposite actually. I am a Microsoft geek at heart, learnt basic when I was 13 and loved them since. They can do minimal wrong in my eyes (except for windows ME).

I appreciate Apple in a completely different way, I think how they have created their following in nothing short of amazing. The spot a market potential and they make it work, really well.

The iPod worked really well but it was really the iPhone that did it for them, they brought Apple to the absolute masses. I am still not 100% sure if the iTunes store was a fluke, I don't think it was on the first iPhone. If it was planned in it's entirety then hats off to Steve.

Look at the market share now, Microsoft should be scared. I don't think Microsoft has ramped up it's game much either, Ballmer is a bit of a joke so I'm going to find it hard to take him seriously but I think I will always be Microsoft at heart.

[toyg]

The iTunes Store came with the original iPod, and it was an integral part of Apple's strategy.

You probably meant the App Store, which wasn't on the very first iPhone and was, in fact, a bit of a lucky strike. Jobs didn't want anyone installing anything on the phone (classic Apple control-freakery at its finest), so he insisted for months after launch that extensibility would come exclusively from sandboxed web-applications. Eventually they did release a SDK and establish a process to publish apps, but only after encountering overwhelming demand.

[philwelch]

No, the iTunes store came in 2003, two years after the iPod.

[chrislomax]

I did mean the AppStore, thanks for califying!

[Newgy]

By "sensible" you mean "disastrous." Owning Sony Pictures has been a consistent money loser, and the studio IP concerns at Sony Music and Pictures hamstrung their electronics arm from innovating in the face of the iPod threat.

[saturdaysaint]

In Sony's defense, the idea of a modern electronics company owning actual content was an interesting idea, especially as they introduced new media formats. It's not far removed from what Amazon is attempting in publishing and what turned out to be a very successful model for the game industry. Unfortunately for Sony, it turns out that the economics just don't work for music and movies.

[potatolicious]

It's more than the economics of owning a studio - Sony's ownership of their studios actively harms their other, actually profitable, product categories.

Look at the PSN's movie rental store - perpetually hamstrung by limited selection. Why would competing studios want to get into bed with one of their biggest competitors on their closed service?

Similarly, it creates internal conflicts of interest. Sony's electronics are constantly crippled when it comes to content, probably at the pressure of owning their own content themselves. For the longest time it was impossible to get any movies on a memory stick, forcing PSP users to buy them on expensive and battery-murdering discs instead. It took years to fix that mistake, but of course, by the time they did, public interest in mobile movies had basically all but disappeared.

[nobody31415]

It was a very 'sensible' decision if you are an MBA! If Sony had been a little more flexible and far sighted it could have worked. But as you say, it resulted in the DAT tape and minidisk being restricted to protect the studio.

It's the same sensible that means Apple shouldn't have started iTunes (we aren't a record company) and Amazon shouldn't have done Kindle (we aren't a computer company) !