3 Things Only Apple Could Do
Dec 23rd 2012 7:00PM
Updated Dec 23rd 2012 7:06PM
As the largest tech company on the planet and a $121 billion money mountain, there isn't a lot that Apple can't do right now. But along its journey, the Mac maker has pulled off some incredible feats that no other company could or was brave enough to attempt. Here are just a few.
1. Commandeer two legally owned trademarks
Today, the iPhone and the iOS mobile operating system it runs are among the strongest brands known in consumer electronics and immediately recognizable as Apple offerings. Not just one, but both of these trademarks were once owned by networking behemoth Cisco Systems .
Apple was fully aware that Cisco owned the iPhone name, but the moniker was simply too perfect for the company's new smartphone that it was willing to take the legal risk and unveil the device before procuring the rights to it. Cisco got a hold of the trademark in 2000 after acquiring Infogear, having originally filed for it in March 1996.
The Mac maker had approached Cisco to advise it that it wanted to use the name, but no official agreement was inked by the time Steve Jobs unveiled it in January 2007. The networker immediately filed suit against Apple for trademark infringement, although it turned out that Cisco had lost rights to it about a year prior, since it wasn't actually using the iPhone name in any current products. Just a month later, the pair would settle and both were allowed to use the iPhone trademark -- but you know whose name comes to mind when you hear "iPhone."
Cisco had been using the IOS name (capital "I") for more than 10 years when Apple wanted to rebrand iPhone OS to iOS in June 2010. However, this time around, Apple obtained the rights to use the name ahead of time, with Cisco disclosing that Apple was licensing the iOS trademark. Still, the inevitable result was again that consumers associated "iOS" with iDevices instead of with networking gear.
With the iPhone and iOS brands, Apple essentially hijacked them both and told Cisco, "This is mine now."
2. Murder mobile Flash
Few companies can single out technology standards for destruction and succeed, but that's exactly what Apple did with Adobe Flash. The debate escalated after the launch of the iPad, even though the iPhone that had shipped three years earlier also never supported Flash.
Eventually, Steve Jobs wrote an open letter of why iDevices would never include Flash, citing its proprietary nature, reliability, security, and performance, among other things. Shortly thereafter, Microsoft would join in bashing Flash in support of HTML5 and H.264 as well.
A little over a year ago, Adobe would officially ditch mobile Flash, backing HTML5 in the process. With iDevices comprising a large chunk of mobile devices, it simply wasn't worth it anymore as mobile developers were already transitioning away from Flash. The platform is still around on desktops, but HTML5 is clearly the future.
Apple didn't singlehandedly kill mobile Flash, but it was easily the largest and most influential catalyst toward the platform's inevitable death as the only tech giant with the courage not to include one of the most common Web technologies in its connected devices.
3. Reclaim control from wireless carriers
Before the iPhone, the phone industry had devolved to a point where wireless carriers told handset makers what to build. Since carrier approval was necessary to get a product to market, OEMs had little choice but to comply. That's one reason there was no meaningful innovation in smartphones before Apple's entry, because carriers were a necessary barrier that stood between manufacturers and consumers.
Carriers do everything in their power to avoid service commoditization and lock customers in, including subsidies, service contracts, and device exclusivity. A smartphone executive once told The Verge: "Exclusivity is the bane of my existence. But it's the only way business gets done."
Verizon famously declined the initial opportunity to carry the iPhone, largely because it wasn't willing to give up the control that Apple wanted. AT&T , on the other hand, was willing to play ball without even seeing the device. As part of that deal, Ma Bell scored three years of iPhone exclusivity in the U.S. and Apple was given the opportunity to prove itself.
Over that time, AT&T saw incredible smartphone subscriber growth (much higher than Verizon's) driven by iPhone adoption. Since these users have juicier average revenue per user, or ARPU, carriers now court Apple to carry the iPhone. Apple shifted the balance in the smartphone industry, and other OEMs have also benefited by reduced carrier control.
Looking forward, the TV market resembles the smartphone market in much the same way as an industry in desperate need of disruptive innovation. What remains to be seen is whether Tim Cook is willing to take the same types of risks that Jobs was.
There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and, more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.
The article 3 Things Only Apple Could Do originally appeared on Fool.com.Fool contributor Evan Niu, CFA, owns shares of Apple and Verizon Communications. The Motley Fool owns shares of Apple and Microsoft. Motley Fool newsletter services recommend Apple, Adobe Systems, Cisco Systems, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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