Apple is under seige. Palm wants its phone business back and Microsoft is taking the Windows/OSX war to the streets, literally; all while attempting to flank the Mobile Music Juggernaught's combo of Apple's iTunes and iPod with their Zune subscription and download model. Meanwhile, Dell's making a play for the educational sector with their $370 netbook laptops for classrooms and in the last year the UK has killed not one but TWO of the television commercials advertising the iPhone while the EU has sued them for anti-competitive practices in their aforementioned online music store. And let's not forget that Mr. Jobs is out of the office indefinitely.

With all these attacks from all sortsa sides I think it's pretty clear: Apple's doing something right.

We're going to explore some of these issues in later posts. What's clear is that as Apple continues to push forward into the consumer tech sector, creating useful convergence knick-knacks like their music players, phones and set-top boxes, the companies which produced the previous generations of such devices are feeling their market-share slip: rapidly. Apple's growth in the phone industry is making up for it's lagging market-share in the laptop world and it's flat sales of the iPod, the device that reinvented the company in the 21st century.

So here's the rub. How does Apple cement it's niche in the ever-growing phone industry? The thing to take notice of here is that the company has moved from an specialty product line of computers, once marketed toward graphic artists and educators, to one which focuses on the yuppie class, creating only high-end solutions that are often unaffordable. The ubiquity of their devices in the music and smartphone sectors, leavesthis newer, 21st century high-end, Apple Corp. in somewhat of an oxy-moronic, existential plane.

Even wealthy fans of your product won't see the need for an expensive upgrade on a 12 month cycle-- leaving Apple to move toward gaining market share via less affluent clients. The trick is to make sure that whichever product you create for such consumers does not degrade the quality standing that Apple has fought so hard to create in the last near decade-- the same levels of quality that attracked all those people willing to pay $600 for a smartphone in 2007.

To this end Apple just might leave older models on the market, say $99 for an 8gb iPhone 3G while still charging conventional $199 and $299 for the iPhone 3GS, 16gb and 32gb respectfully.

Needless to say that this could cut into the Palm Pre's supposed Blockbuster Launch considerably as the Pre, while powerful, holds a less developed bank of applications and sells for around $300 up front with a $100 rebate.


We'll keep watching Apple to see how it deals with the myriad challenges at the gates of its traditional marketshare. It's not that there's much to worry about, the company is as strong or stronger than its ever been. What's interesting here is seeing how Apple, the Convergence King maneuvers through this gauntlet of attacks on its core businesses. If anything, Apple's shown us time and again that while its movements may on some level, react to the ever-changing tech industry, more often than not, it moves the industry; it reshapes it. And it does so leaving many a consumer wondering: "Why didn't any of the other companies do that before?"