Thanks to the Mac and the Apple II, they were making money hand-over-fist. They also had the best designers, and were an incredibly trusted brand with both professionals and the education market. To top it all off, they had a giant technology lead over any of their competitors (except Commodore). The Mac was considered far more than a "computer" at the time.
The IBM PC never matched the Macintosh for sales. However, the combined fleet of clones reached such a high volume that the PC clone market became the primary target for developers. Android has similar potential.
You're probably right that the iPhone will stick around indefinitely. The Macintosh, in a similar position, has increased its total unit sales, year over year, every year since the initial release. However, it would be hard to argue that Apple was competitive during the 1990s for mindshare or developers.
The real risk to Apple is not that they'll crash and burn and go out of business. The risk is that they'll lose their current lead in developer mindshare, and that's a real risk indeed.
Hmmm, there are several very significant differences between the two situations though:
- open hardware was critical to the success of the PC platform, allowing functionality such as ethernet, better video, changing disk drive configurations etc. In the mobile phone world, the hardware is locked down for all players.
- computer interface devices (screens, keyboards, mice, touchpads) have all been designed to optimise for ease of use. In the case of mobile phones, the interface devices have been optimised for small size. Concretely this means that both input and output are difficult - writing useable software that runs on two screens with different aspect ratios is a momentous task on a mobile phone, having to allow for the existance or not of a physical keyboard or multitouch screen, same thing. What this means is that a diffuse hardware platform, such as Android is offering, is going to be very difficult to develop high quality apps on. Unless hardware manufacturers can agree on a common platform, this problem is only going to increase. Of course, such a common hardware platform doesn't seem terribly likely to me, as the example of the PC industry shows that this approach quickly reduces manufacturers to commodity providers, with razor thin margins. I suspect that the Samsungs and Motarolas of the world are in no hurry to go there..
- Apple never had the dominance in the computer market that they currently have in the smartphone market - they never got over about 14% of the market with the Mac (although if it continues it's current trajectory, we may see this level beaten in the not too distant future). In the smartphone market however, they are well above this level of marketshare already, and still rising. If you add in iPod Touch sales, the platform is massacring everybody out there.
- At the time when Apple lost market share, home computers were only a small part of the market compared to office computers. Purchasing departments have a strong preference for cheap over quality, provided that a minimum level has been achieved. Consumers are far more discerning. In the mobile world, personal sales are more important than business sales, or to say it another way, you are more likely to have a personal mobile phone than a work phone. All of this acts to reduce one avenue of attack on the iPhone platform - you probably aren't going to be able to win just by doing things cheaper - you're going to have to do things better too.
- phones are far more mission-critical than PCs. If your computer breaks/starts functioning weirdly, you aren't too badly affected. If your phone goes down these days, it's a disaster. There is going to be a premium on reliability, and it remains to be seen as to whether the Android platform can deliver that reliability when there are numerous hardware manufacturers, and a large uncontrolled application base.
There are other differences, but I think these are the important ones. Globally I find these differences big enough that I'm dubious as to the validity of using the PC experience as a guide to the future of the smartphone market.
Thanks to the Mac and the Apple II, they were making money hand-over-fist. They also had the best designers, and were an incredibly trusted brand with both professionals and the education market. To top it all off, they had a giant technology lead over any of their competitors (except Commodore). The Mac was considered far more than a "computer" at the time.
The IBM PC never matched the Macintosh for sales. However, the combined fleet of clones reached such a high volume that the PC clone market became the primary target for developers. Android has similar potential.
You're probably right that the iPhone will stick around indefinitely. The Macintosh, in a similar position, has increased its total unit sales, year over year, every year since the initial release. However, it would be hard to argue that Apple was competitive during the 1990s for mindshare or developers.
The real risk to Apple is not that they'll crash and burn and go out of business. The risk is that they'll lose their current lead in developer mindshare, and that's a real risk indeed.
*For historical marketshare context, check out http://www.jeremyreimer.com/total_share.html .