Apple's Jobs Is Missing An Opportunity--Again

ROBERT FALETRA Can be reached at (781) 839-1202 or via e-mail at rfaletra@cmp.com.

Cisco's General Council, in a blog posting last week, said: "What were the issues at the table that kept us from an agreement? Was it money? No. Was it a royalty on every Apple phone? No. Was it an exchange for Cisco products or services? No.

"Fundamentally, we wanted an open approach. We hoped our products could interoperate in the future. Our goal was to take that to the next level by facilitating collaboration with Apple. And we wanted to make sure to differentiate the brands in a way that could work for both companies and not confuse people. That's it. Openness and clarity."

In a nutshell, Cisco wants to make its product compatible with Apple's, and Steve Jobs is dead set against it.

	Jobs believes Apple must completely control everything that touches its products. That can only limit its market.

Is anyone surprised? I'm not. Apple got toasted in the late 1980's and through the 1990's because of its refusal to license its operating system. When it started to do so after Jobs left, we began to see a host of Apple clone makers popping up. Jobs shut that down almost immediately upon his return, and the company languished for years until it hit upon the iPod. Let's face it. The company makes great products with superior user interfaces. I personally have several Macs in my own home, so I'm not anti-Apple. But if it was not for the hit it made with the iPod, Apple wouldn't be seeing the resurgence it has. Many folks have only discovered the Macintosh through the iPod, and it still has no meaningful market share in business.

What Jobs thinks he can do is leverage his proprietary attitude and closed iTunes platform further by forcing users to buy only Apple products if they want compatibility. Cisco is trying to use its ownership of the iPhone trademark to force Apple to open up to the world of open-standard computing. Now, the clock is ticking, because Apple wants to ship its new cell phone in June, and the trademark dispute very likely will not be decided by then.

This will be interesting. Because of the June ship date, manufacturing lines have to get humming soon to have product ready. Jobs may be forced to either play ball with Cisco or be ready to change the name of the phone. It's good drama, but it's also a good illustration of why it's difficult for you to recommend Apple technology to business customers. Jobs believes Apple must completely control everything that touches its products. That can only limit its market over the long term and give VARs great pause in selling and supporting the product line in business.

WHAT'S YOUR OPINION ABOUT THE iPHONE DISPUTE?
MAKE SOMETHING HAPPEN. E-MAIL CMP CHANNEL GROUP PRESIDENT ROBERT FALETRA AT RFALETRA@CMP.COM.